Rail Vikas Nigam Ltd (RVNL), a central public sector enterprise under the Ministry of Railways, is undergoing a significant transformation in response to a series of financial and operational setbacks.
The company has faced a 25% reduction in ministry funding, delays in critical road projects resulting in revenue losses, and a near year-long stall in its Vande Bharat sleeper train contracts, all culminating in a 9% decline in FY25 revenues to approximately ₹19,869 crore, falling short of its annual target. This challenging environment has prompted RVNL to diversify aggressively, both technologically and geographically.
Small Modular Reactors: A Bold New Frontier
RVNL is now venturing into the energy sector by exploring the deployment of Small Modular Reactors (SMRs) to power its major railway projects. The company has initiated preliminary discussions with Russia’s state-owned nuclear giant Rosatom, which has proposed building eight SMRs of 55 MW each for four key railway lines: Rishikesh-Karnaprayag, Bhanupali-Bilaspur, Yavatmal-Nanded, and Indore-Budni. These projects are strategically significant and face high infrastructure costs for conventional electricity supply.
SMRs, with capacities up to 300 MW per unit, offer advantages such as a smaller physical footprint, factory-built scalability, and enhanced safety—making them particularly suitable for challenging terrains and seismic zones like Rishikesh. The move aligns with Indian Railways’ goal of achieving net-zero carbon emissions by 2030 and reducing dependence on fossil fuels. RVNL has requested Rosatom to provide detailed cost, logistics, and timeline analyses, with the process still at a preliminary stage.
In addition to Rosatom, RVNL is considering partnerships with other international players, including those from France, which has a robust nuclear energy sector, to avoid over-reliance on a single partner. The company is also monitoring indigenous developments, such as Bharat Small Reactors (BSRs) by NPCIL, as part of a broader national push towards nuclear energy.
International And High-Margin Ventures
RVNL’s diversification extends beyond nuclear energy. The company is actively pursuing high-margin overseas projects, including a ₹2,000-crore port in the Maldives, solar and transmission projects across West and Central Asia and Africa, and opportunities in Latin America. These international ventures already constitute about 10% of RVNL’s nearly ₹100,000 crore order book, with ambitions to raise this share to 40–45% in the coming years.
Domestically, RVNL is preparing to participate in the upcoming bidding for operation and maintenance contracts of Indian Railways, which are expected to open to central public sector enterprises soon. The company’s order book is now split, with 55% acquired through competitive bidding and 45% from assigned railway projects, signalling a shift away from dependence on government allocations.
Revenue Outlook And Project Delays
Despite these bold moves, RVNL continues to grapple with revenue challenges. The railway allocation for FY26 stands at ₹12,000 crore, down from ₹16,000 crore in FY25, further tightening its financial position. Delays in National Highway projects have already cost the company nearly ₹2,000 crore in revenue, and the ₹13,000 crore Bharatnet order is facing initial execution hurdles due to the need for extensive asset surveys before work orders can be issued.
The much-anticipated Vande Bharat sleeper train project has also been delayed by about 10 months, pushing the commissioning date to June 2026 and deferring revenue realization to FY27 or FY28. This delay, attributed to changes in coach configurations and protracted design discussions between Indian and Russian partners, has already resulted in a revenue shortfall of at least ₹240 crore.
Strategic Realignment And Future Prospects
RVNL’s current strategy marks a decisive shift from its legacy as a railway project executor to a diversified infrastructure and energy player. By embedding energy resilience into its infrastructure projects—through SMRs, solar, and storage—and aggressively pursuing international contracts, RVNL aims to reclaim financial stability and position itself as a key enabler of India’s sustainable development goals.
The company’s leadership remains optimistic, viewing the current downturn as a transitional phase. With a robust order book and entry into future-ready sectors, RVNL is poised for recovery and long-term growth, leveraging its traditional strengths while embracing new opportunities in energy and global infrastructure markets.
Based On BL Report