The Great Indian Railway Boom is Here: 5 Stocks to Watch
Indian railway stocks have done very well in 2023. This rapid price appreciation has caught everyone’s attention in the market. And there’s very good reason for this.
In the Union Budget earlier this year, the railway sector was the biggest beneficiary. A record ₹2.4 trillion (tn) was allocated for the Indian railways. Part of the funds will be used for the railways' ambitious plan to lay about 100,000 km of new track over the next 20-25 years.
Improving India’s railway infrastructure has always remained a priority but never before has the government shown such serious interest. The regulatory environment lacked clarity before. But this has now changed… and the stock market has noticed.
The sector got a huge boost this week after reports emerged that Indian government will introduce a production-linked incentive (PLI) scheme for train component makers. This serious effort is part of the country’s effort to attract foreign manufacturing firms and reduce dependence on imports. The government has also approved the ₹576.13 billion (bn) green mobility scheme, seven multitracking rail projects worth ₹325 bn to add 2,339 km of track , and an upskilling and concessional credit scheme worth ₹130 bn.
Recently, the railways gave a procurement order for 1.54 million (m) forged wheels that are made in the country to reduce dependence on imports. Institutional investors are very interested in railway stocks these days and retail investors have also joined the party now. Railway stocks saw a run-up on Wednesday, 16 August, as soon as the markets opened.
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