Railways Ministry initiates merger of IRCON and RVNL to create a larger Rail Infra PSU

New Delhi, India (Metro Rail Today): The Ministry of Railways (MoR) is reportedly considering a proposal to merge IRCON International Limited and Rail Vikas Nigam Limited (RVNL)—two major public sector companies engaged in railway infrastructure development.

According to official sources cited in reports, the proposal is currently at a preliminary stage and will undergo the standard government review process before any decision is finalised. The plan will require approvals from the Ministry of Finance, Department of Public Enterprises (DPE), and the Cabinet Committee on Economic Affairs (CCEA).

If implemented, the merger could create a larger integrated rail infrastructure entity, combining the project execution strengths of both organisations and potentially enhancing India’s capacity to deliver large-scale railway projects both domestically and internationally.

Industry observers believe the proposal is aimed at leveraging the complementary capabilities of the two companies.

RVNL is widely recognised for its project management expertise and execution of railway infrastructure projects on behalf of the Ministry of Railways, while IRCON International has extensive experience in turnkey railway construction and global infrastructure projects.

Combining these strengths could help improve project delivery efficiency, strengthen operational capabilities, and expand the merged entity’s presence in international railway and infrastructure markets.

Since both companies are publicly listed on the BSE and NSE, the merger—if approved—would likely be executed through a share swap arrangement, allowing shareholders of both firms to receive equity in the combined entity.

IRCON International Limited is a public sector engineering and construction company specialising in railway infrastructure development, particularly turnkey railway projects.

The company is also involved in highways, airport infrastructure, electrical substations, commercial complexes, and metro rail construction.

IRCON has completed more than 130 projects across 25 countries and over 405 infrastructure projects across various states in India. Its international footprint includes projects in Malaysia, Nepal, Bangladesh, Algeria, Myanmar, and Sri Lanka.

As of 31 December 2025, the company reported a total order book of approximately ₹23,801 crore, with the railways segment accounting for about 75 percent (₹17,781 crore). Highways contributed 18 percent (₹4,297 crore), while other infrastructure segments accounted for the remaining 7 percent (₹1,723 crore).

Rail Vikas Nigam Limited, a wholly owned government company under the Ministry of Railways, serves as a key project implementation arm for railway infrastructure development.

The organisation is responsible for executing projects such as new railway lines, doubling works, gauge conversion, electrification, metro infrastructure, major bridges, workshops, and railway production units.

For Q3 FY26, RVNL reported consolidated revenue from operations of ₹4,684 crore, reflecting a 9 percent sequential decline from ₹5,123 crore in Q2 FY26, but a 3 percent year-on-year increase compared with ₹4,567 crore recorded in Q3 FY25.

The company reported a net profit of ₹324 crore, representing a 40 percent increase quarter-on-quarter from ₹231 crore in Q2 FY26 and a 4 percent rise year-on-year compared to ₹312 crore in the same quarter last year.

RVNL currently holds a robust order book of around ₹87,000 crore, including approximately ₹40,000 crore in railway nomination projects and ₹47,000 crore in competitively bid contracts.

Commenting on the development, Mrs. Mamta Shah, MD & CEO, Urban Infra Group, said the proposed consolidation reflects the evolving strategy of strengthening public sector engineering capabilities.

“If implemented, a merger between IRCON and RVNL could create a powerful integrated infrastructure entity capable of executing large-scale railway projects with greater efficiency and global competitiveness. Such consolidation could help streamline project delivery and strengthen India’s ability to undertake complex rail and metro infrastructure projects both domestically and overseas,” she said.

She added that the move aligns with the broader push to modernise railway infrastructure and expand India’s footprint in international rail engineering markets.

Industry analysts believe that merging the two organisations could create a stronger public sector engineering entity capable of handling complex railway and metro infrastructure projects, while also enhancing India's competitiveness in global railway markets.