The Indian government has for the first time floated a tender to procure rails, which was until now a monopoly of state-owned Steel Authority of India (SAIL).
Indian Railways floated a tender on October 12 to buy 700,000 metric tons of rails for track upgrades, Railway Minister Piyush Goyal said.
Market experts believe the move of opening up the procurement process may benefit Jindal Steel & Power (JSPL), as it is the only other local producer of steel of this grade.
“If Steel Authority cannot supply, then they will go in for other producers. So in that way, JSPL will definitely be benefiting. Although, railways’ first preference will always be Steel Authority,” Goutam Chakraborty, an analyst at Emkay Global Financial Services, told Bloomberg.
The tender gains more importance as both state-run SAIL and private player JSPL have been trying to increase their respective market shares and profits after posting losses for the past two years. Read More…