SYNOPSIS: Reports suggest the Ministry of Railways has proposed merging two Navratna PSUs to create a larger railway infrastructure entity. The proposal is under review and would require multiple government approvals before implementation.
During Friday’s trading session, shares of two Navratna PSUs involved in railway infrastructure development under the Ministry of Railways (MoR) surged nearly 12 percent, after reports emerged that the Ministry of Railways (MoR) has proposed a possible merger between the two companies, lifting investor sentiment in the stocks.
With a market cap of Rs. 13,830 crores, shares of Ircon International Limited surged over 12 percent to hit an intraday high at Rs. 150.15 on BSE, while shares of Rail Vikas Nigam Limited (RVNL) hit an intraday high at Rs. 298.55, up by around 7 percent, with a market cap of Rs. 60,278 crores.
News
As per media reports, the Ministry of Railways (MoR) has initiated a proposal to merge IRCON International Limited and Rail Vikas Nigam Limited (RVNL), two major public sector companies involved in railway infrastructure development. The report, citing official sources, stated that the proposal is currently at a preliminary stage and will need to pass through the standard review process. This includes clearances from the Ministry of Finance, the Department of Public Enterprises, and the Cabinet Committee on Economic Affairs (CCEA) before any final decision is taken.
The proposed merger is aimed at creating a larger and more integrated entity by combining the strengths of both companies. RVNL’s strong project management capabilities could complement IRCON’s expertise in turnkey railway construction and infrastructure execution. According to the report, bringing these capabilities together may help enhance execution efficiency, strengthen operational capacity, and expand the combined entity’s presence in international railway projects.
Since both IRCON and RVNL are listed on the BSE and NSE, the merger – if it moves forward – would likely be structured through a share swap arrangement, allowing shareholders of both companies to receive shares in the merged entity.
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Financials
For Q3 FY26, IRCON posted a consolidated revenue from operations of Rs. 2,119 crores, reflecting a sequential growth of more than 7 percent QoQ compared to Rs. 1,977 crores in Q2 FY26. However, on a year-on-year basis, revenue decreased by around 19 percent from Rs. 2,613 crores recorded in Q3 FY25.
Meanwhile, the net profit stood at Rs. 100 crore, indicating a decline of about 27 percent QoQ from Rs. 136.5 crores in Q2 FY26, while on a year-on-year basis, the profit moved up by over 16 percent from Rs. 86 crores reported in Q3 FY25.
As of 31st December 2025, its total order book stood at Rs. 23,801 crore. The Railways segment accounted for the dominant share at around 75 percent (Rs. 17,781 crore), followed by Highways contributing 18 percent (Rs. 4,297 crore), while Others made up the remaining 7 percent (Rs. 1,723 crore).
Ircon International Limited is a public sector construction company, with a focus on infrastructure projects and specialisation in the execution of Railway projects on a turnkey basis and otherwise. Additionally, it is engaged in roads, buildings, electrical substation and distribution, airport construction, commercial complexes, and metro rail works.
The company has widespread operations in several states in India and other countries, including Malaysia, Nepal, Bangladesh, Algeria, Myanmar and Sri Lanka. Ircon has completed more than 130 projects in 25 countries and 405 projects in various states in India.
Meanwhile, for Q3 FY26, RVNL reported a consolidated revenue from operations of Rs. 4,684 crores, reflecting a sequential decline of around 9 percent QoQ compared to Rs. 5,123 crores in Q2 FY26, but a marginal year-on-year increase of around 3 percent from Rs. 4,567 crores recorded in Q3 FY25.
Net profit stood at Rs. 324 crores, indicating an increase of more than 40 percent QoQ from Rs. 231 crores in Q2 FY26, and a marginal rise on a year-on-year basis by nearly 4 percent from Rs. 312 crores reported in Q3 FY25.
During Q3 FY26, RVNL reported an order book of Rs. 87,000 crores, including railway nomination works of Rs. 40,000 crores, and new bidding contracts worth Rs. 47,000 crores.
Rail Vikas Nigam Limited is a wholly owned Government Company, as a project executing agency working for and on behalf of the Ministry of Railways (MoR). It is in the business of executing and implementing all types of rail infrastructure projects, including new lines, doubling, gauge conversion, railway electrification, metro projects, workshops, major bridges, construction of cable-stayed bridges, production units, institution buildings and sharing of freight revenue with Railways.
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