The proposed partnership will evaluate opportunities to manufacture and supply the products to Indian Railways as well as customers in the global railway industry, Texmaco said in an exchange filing on Thursday, August 27.
The companies will also assess the technical, qualification, certification and localisation requirements prescribed by Indian Railways.
German technology, manufacturing in India
Under the proposed arrangement, BVV is expected to provide or license technology, technical know-how, manufacturing processes and engineering expertise to the venture.
Texmaco, meanwhile, is expected to handle or support localisation, manufacturing, assembly, testing and quality assurance in India, along with marketing, supply and after-sales support.
The companies are considering setting up a joint venture or special-purpose vehicle in India to pursue the opportunity.
The MoU also envisages BVV supplying railway components directly to Texmaco and becoming one of its preferred international suppliers, subject to the signing of a definitive supply agreement.
Commercial terms yet to be decided
The agreement doesn’t involve any immediate fixed financial commitment.
Key commercial details—including the ownership and funding structure of the proposed joint venture, minimum purchase commitments, pricing, production capacity and delivery and payment terms—will be negotiated separately and set out in definitive agreements.
The MoU will remain in effect for 12 months unless terminated earlier and includes exclusivity provisions covering the proposed collaboration during that period.
Texmaco said the agreement isn’t a related-party transaction and that BVV isn’t related to its promoter or promoter group.
Shares of Texmaco Rail & Engineering closed 0.5% lower at ₹108.50 on the NSE on Thursday.
