Titagarh Wagons: Multibagger stock jumps 5% after Italian government picks stake in its subsidiary; stock up over 70% in six months

Shares of Titagarh Wagons, a leading manufacturer of freight and passenger rolling, jumped five per cent in BSE intraday trade on Monday after the Government of Italy took 'strategic stake' in its subsidiary—Titagarh Firema Spa (TFA). Titagarh Firema was acquired by Titagarh group in 2015 from extraordinary administration and as a part of the acquisition agreement, Titagarh had to inherit old contracts signed by Firema worth Euro 225 million, and a large part of these contracts were difficult and loss-making contracts 

The development was confirmed by the company in a regulatory filing.   

"Titagarh Wagons Limited (TWL) is pleased to inform all the stakeholders that in a major milestone transaction, the Government of Italy, through its investment arm – Invitalia has taken a strategic stake in Titagarh Firema Spa (TFA), the subsidiary of Titagarh Wagons Limited," read a BSE filing by the company.  

Earlier, the company has received largest orders from Indian railways for 24,177 wagons valued at Rs 7,800 crore, the company has informed in its concall on 22nd August.  

Besides, the company has received orders worth INR 184cr from the largest rolling stock manufacturer, it 

Meanwhile, as part of the agreement, the Government of Italy will subsequently own 30.30% stake in Titagarh Firema, for an investment of Euro 10 million.  

The new equity has been issued at a face value of Euro 1/- per share translating into an Enterprise Value of the company at Euro 118 million and an Equity valuation of Euro 33 million.  

"This is a strategic transaction and this recapitalisation exercise will lead to overall value creation and resultant appreciation of the valuations of TFA. The Company along with its subsidiary Titagarh Bridges & International Private Limited (TBIPL) continues to hold shares worth Euro 16.40 million representing 49.70% of TFA," said the company.  

A Multibagger stock 

As on September 12, Titagarh Wagons is a multibagger stock which has clocked more than 250% return in the past two years. The stock rose over 20% in the past one month, jumped 43% in three months and rose almost 75% in the last six months. The one-year return of the counter stands at around 70%.  

Titagarah Wagons  share price touched 52-week high of Rs 177 per share on September 1, 2022, and traded at 52-week low of Rs 75.75 in February this year.