NEW DELHI: Two major railway PSUs – Rail Vikas Nigam (RVNL) and Ircon International – are set to be merged as part of a move to create a bigger entity that can take up larger domestic and international projects, instead of competing with each other, top officials said Tuesday.This marks the second PSU merger after finance minister Nirmala Sitharaman announced the merger of PFC and REC in her Budget on Feb 1. The details of the RVNL-Ircon merger will be worked out by the railways brass in the coming days, the official said.People aware of the development said that railway has initiated the process, which will eliminate duplication, pooling of resources, and enhancing the ability of the merged entity to bid for mega infrastructure projects. They added that the process would be lengthy as this would require approvals from different departments and then from the Cabinet.As on Tuesday, the market capitalisation of RVNL was Rs 53,877 crore, while that of Ircon was Rs 11,159 crore, according to BSE data. Officials said the combined order book of the two entities is likely to be more than Rs 1.5 lakh crore. Ircon shares rose 2.9% on BSE to close at Rs 119, while RVNL closed 3.3% higher at Rs 258.“After merger, the new entity will become a bigger player and share value will also increase. The need for merging the two has been felt for a long time. It will increase pool of manpower and capability. The merged entity can give competition to other major players in infrastructure sector and it can handle larger order books,” said an official.
