Railway stocks are all chugging in the green today – BEML, Titagarh Wagons, Texmaco, Kemex was locked in the 5% UC at Rs.47.55, its new 52-week high and Stone India did the best showing a 19% rise – all stocks are doing very well today.

The reason for this sudden fancy for railway stocks is on account of the Cabinet approving formation of an independent rail regulatory authority (RDA) to determine tariffs ensuring fair play and level playing field for private players keen on investment in the railways. The RDA will be formed through an executive order of the government.

RDA will help the government to take appropriate decisions on pricing of services commensurate with costs, suggest measures for enhancement of non-fare revenue, protection of consumer interests, promote competition, encourage market development and create positive environment for investment.

It will also suggest measures for absorption of new technologies and human resource development and provide framework for non-discriminatory open access to the Dedicated Freight Corridor infrastructure. 

The market is hopeful that with the setting up of the RDA, these railway companies will finally start getting orders, not just on paper but for actual implementation.