Railway-related stocks experienced significant declines in trading on the BSE following Union Budget 2026-27 announcements. According to reports from CNBC TV18, the fall occurred despite initial positive sentiment from announcements about high-speed rail corridors. The decline was registered after Finance Minister Nirmala Sitharaman announced tax proposals that impacted the sector. The broader market also witnessed a significant sell-off, with Nifty closing at 24,825.45, down 1.96% and Sensex settling at 80,722.95, a decline of 1.88%. As per Mid-day, this marked one of the worst Budget-day declines in years, with the market experiencing a sudden dip around 12.30 pm.
Railway stocks showed widespread declines across the board with losses of up to 5% on Sunday, February 1. IRFC shares were trading with losses of 4.5%, while RITES and RVNL shares were trading between 4.5% to 5.5% lower. The previous day's decline was registered after Finance Minister Nirmala Sitharaman announced tax proposals that impacted the sector. BEML stock was trading at ₹1,716.10, down 4.39% from its previous closing price. RVNL shares were at approximately ₹330.35, declining 3.76% from the previous close. RailTel Corporation shares stood at around ₹340.60, down 3.72%. IRFC stock was at approximately ₹116.70, down 2.87% from its prior close. Titagarh Rail Systems shares traded at around ₹802.85, lower by 2.22%. IRCTC shares were trading at about ₹618.50, down 0.73% from the previous close, while CONCOR stock stood at approximately ₹500.60, declining 0.33%.
The Ministry of Railways received a significant allocation of ₹2.93 lakh crore from financial year 2027, representing a 10% growth from the ₹2.65 lakh crore allocated in the ongoing financial year. The allocation breakdown shows new lines allocation increased to ₹36,722 crore from ₹30,632 crore. Gauge conversion allocation saw a marginal increase to ₹4,600 crore from ₹4,284 crore. Rolling Stock allocation stood at ₹52,109 crore, up from ₹50,008 crore last year. For signaling and telecom, as well as electrification projects, capex has been increased by ₹500 crore to ₹1,000 crore for financial year 2027. The 10% increase in allocation was in-line with brokerages such as Nirmal Bang anticipations from the Budget.
The railway stock decline followed the announcement of several tax proposals that impacted the sector. The Finance Minister announced plans to raise STT on Futures to 0.05% from the present 0.02%. STT on options premium and exercise of options will also be raised to 0.15% from the present rate of 0.1% and 0.125% respectively. Additionally, the budget proposed that buyback for all types of shareholders will be taxed as Capital Gains, requiring promoters to pay an additional buyback tax with effective tax rates of 22% for corporate promoters and 30% for non-corporate promoters. As per Mid-day, the increase in Securities Transaction Tax (STT) on F&O trades signals a clear policy intent to rein in excessive speculation particularly among retail investors while safeguarding the integrity of India's capital markets.
According to CNBC TV18, no specific announcements were made regarding new trains or Vande Bharat trains in the Budget, apart from the high-speed corridor that was announced by Finance Minister Nirmala Sitharaman in the Lok Sabha. The budget outlined plans for seven high-speed rail corridors across key urban and economic centres, which will act as growth connectors, cutting travel time, reducing emissions, and supporting regional development. The proposed routes include Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri.
