Railway, shipping stocks rally as G20 leaders announce multinational rail and port deal; RVNL hits all-time high

Stock market today G20 Summit impact: Most railways and shipping stocks gained on Monday, September 11. The stocks rallied after global leaders announced a multinational rail and port deal linking the Middle East and South Asia on Saturday on the sidelines of the G20 summit in New Delhi.

The pact comes at a critical time as US President Joe Biden seeks to counter China's Belt and Road push on global infrastructure by pitching Washington as an alternative partner and investor for developing countries at the G20 grouping.

At the market close, Rail Vikas Nigam (RVNL) shares stood at Rs 189.50, up 16.40 per cent. The stock hit an all-time high of Rs 191.40 on the BSE in the early trade. Titagarh Rail Systems was up 1.71 per cent at Rs 820.20. BEML ended at Rs 2,610, up 0.66 per cent. Among shipping stocks, Chochin Shipyard slipped 0.65 per cent to end at Rs 1201.50 after rising in the early trade, while Garden Reach Shipbuilders & Engineers ended 1.32 per cent higher at Rs 896.80. Mazagon Dock Shipbuilders ended 2.79 per cent higher at Rs 2271.15 on the BSE.

As regards the deal, Biden said it was a "real big deal" that would bridge ports across two continents and lead to a "more stable, more prosperous, and more integrated Middle East."

Prime Minister Narendra Modi said: "Today, as we embark upon such a big connectivity initiative, we are sowing the seeds for future generations to dream bigger."

A memorandum of understanding on the India-Middle East-Europe Economic Corridor, or IMEC, was signed by the European Union, India, Saudi Arabia, the United Arab Emirates, the U.S., and other G20 partners.

Railway stocks have been on a rising spree this year, mainly because of government investments, the production-linked incentive (PLI) scheme, and increased demand for rail travel. Shares of RVNL have skyrocketed by over 450 per cent over the past 12 months. 

About RVNL

RVNL is a Navratna CPSE under the Ministry of Railways, Government of India.

To bridge the infrastructure deficit in Indian Railways, the then Prime Minister, Bharat Ratna Shri Atal Bihari Vajpayee, announced the National Rail Vikas Yojana (NRVY) on August 15, 2002, in his address from the Red Fort. NRVY was formally launched by the Hon’ble PM on December 26, 2002. To implement NRVY, RVNL was incorporated as a 100 per cent owned PSU of the Ministry of Railways (MoR) on January 24, 2003, with the twin objectives of raising extra-budgetary resources and implementing projects relating to the creation and augmentation of the capacity of rail infrastructure on a fast-track basis. RVNL became fully functional by March 2005.

With inputs from Reuters.