The Hindu Business Line : Titagarh Wagons jumps on FIPB nod

The stock price of Titagarh Wagons hit an intra-day high of Rs 823, but closed the day with Rs 791.30, a gain of about 3.30 per cent over Tuesday’s closing price of Rs 766. The stock moved up on the news that the company has received the Foreign Investment Promotion Board’s approval to set up a joint venture for test marketing and manufacturing aluminium rail cars.

FIPB on Tuesday gave its assent to the proposed $40 million joint venture between FreightCar America and Titagarh Wagons.

Mr Umesh Chowdhary, Vice-Chairman and MD of Titagarh Wagons, told Business Line that in June, boards of the two companies would take a final look at the project, which would manufacture aluminium rail cars.

Manufacturing plant

The Chicago-based FreightCar America would hold 51 per cent stake in the proposed joint venture and Titagarh would hold the balance. The project is to be commissioned in two broad phases. In the first phase, prototype and designing work would be carried out and completely knocked down imported cars from Freight America would be assembled at Titagarh’s plant near here. The company is seeking to buy a little more than 100 acres of land to set a manufacturing plant and start production of cars tentatively by the first quarter of 2010.

Meanwhile, JP Morgan and one of its investment arms — Copthall Mauritius Investment Ltd — have jointly raised their stake to 6.24 per cent from 5.25 per cent recently. JP Morgan, which holds majority of debts in Cimmco Birla, a sick wagon manufacturing company, has planned to take control of the majority equity of the company through a rehabilitation proposal before the BIFR, with Titagarh Wagons as its operating partner. JP Morgan had signed an agreement of co-operation and funding with Titagarh Wagons for Cimmco Birla.

Both are now understood to be pursuing the agreement and jointly working towards the stated goal.

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