Rail Vikas Nigam Limited (RVNL) Designated as Navratna by Department of Public Enterprises
RVNL, a state-controlled company in India that manages turnkey projects for the development of railways, has been designated as a Navratna company by the Department of Public Enterprises. Navratna is a classification given to state-controlled companies that are authorized to accept investments worth up to Rs 10 billion. RVNL is one of India’s 15 Navratna companies, which includes Oil India Limited, Bharat Electronics Limited, and Hindustan Aeronautics Limited.
RVNL’s business model is asset-light, with the company handling the entire project development cycle, from conceptualization to commissioning, including design stages, estimate preparation, contract calling and award, project and contract management, etc. This allows RVNL to keep its fixed asset portion low, its balance sheet stress-free, and its inventory days low.
With a strong order book visibility and working for and on behalf of the Ministry of Railways (MoR), RVNL is a project-executing agency that is likely to play a significant role in the growth of India’s railway infrastructure. The management anticipates that strong order books and new order inflows will support revenue growth at a CAGR of over 20 per cent over the next few years.
Recently, RVNL in partnership with Russian company Transmashholding (TMH) was announced as the lowest bidder for the production and upkeep of 200 lightweight Vande Bharat trains, with an estimated cost of Rs 1.2 billion per train set. Additionally, RVNL in a consortium with Siemens India won the lowest bidder (L1) for Mumbai Metro line 2B of the Mumbai Metropolitan Region Development Authority (MMRDA) with an estimated cost of Rs 3.78 billion.
RVNL has also started participating in international tenders, leveraging its nearly two decades of experience as one of India’s leading execution agencies for railway projects. This would help the company to evaluate, bid on, and execute projects in other nations, reducing its reliance on Indian Railways and lowering risks by diversifying its revenue streams.
With numerous nations considering developing and improving their railway networks, RVNL’s international expansion could prove to be a significant growth opportunity for the company.
Rail Vikas Nigam Limited (RVNL) is a public sector undertaking in India that operates as the Ministry of Railways’ construction arm for transportation infrastructure development and project implementation.
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