Paving the way for mega infrastructural development in the country, state-owned finance lender REC Limited has inked an MoU with Rail Vikas Nigam Limited (RVNL) to finance up to Rs 35,000 crores for multi-modal infrastructure projects in India.
The multi-modal logistics hub projects constitute projects like rail infrastructure projects, road, port, and metro projects where RVNL has forayed into. These projects will be executed by RVNL over the next 5 years.
Riding on the back of the positive development, shares of Rail Vikas Nigam (RVNL) jumped over 3% to Rs 186 at BSE on Wednesday. Apart from RVNL- REC collaboration, Karnataka Road Development Corporation (KRDCL) – RVNL JV received a letter of award (LoA) for Rs 123 crore order to redevelop the Varkala Sivagiri railway station.
In Q2 FY24, the RVNL reported a 3.4% rise in profit at Rs 394.3 crore against Rs 381.2 crore in the previous year at the same period. The revenue in Q2 FY24, however, climbed only marginally to Rs 4,914.3 crore, as compared to Rs 4,908.9 crore in the preceding year.
Understanding the role of RVNL and REC Limited
Incorporated as PSU on January 24, 2003, RVNL works with the twin objectives of the implementation of projects relating to the creation & augmentation of capacities of rail infrastructure and raising of extra-budgetary resources for SPV projects. The company was granted Mini-Ratna status in September 2013. It is important to note that, RVNL was granted the ‘Navratna Status’ as a Central Public Sector Enterprises (CPSE) of the Ministry of Railways in May 2023.
On the other hand, REC Limited is a Maharatna CPSE established in 1969, under the Ministry of Power. The firm provides long-term loans and other finance products for the power-infrastructure sector comprising generation, transmission, distribution, renewable energy, and new technologies like EV, attery storage, and green Hydrogen.
More recently, REC has also diversified into the Non-Power Infrastructure sector comprising roads and expressways, Metro rail, Airports, IT communication, social and commercial Infrastructure (Educational institutions, Hospitals), Ports, and Electro-Mechanical (E&M) works in respect of various other sectors like steel and refinery.
Notably, the loan book of REC Limited exceeds Rs 4,74,275 crores.
