Kinet seeks ₹500 cr loan from PNB to kickstart Vande Bharat train production in Maharashtra

Kinet Rail Solutions, the Indo-Russian joint venture tasked with manufacturing Vande Bharat sleeper trainsets, has approached Punjab National Bank (PNB) for a working capital loan of ₹450–500 crore. The company plans to commence production at its Latur facility in Maharashtra next year. The loan will be backed by Russia’s Sberbank Rossii, which is acting as the sovereign guarantor and financier for the project, sources told businessline. Sberbank is a majority state-owned Russian banking and financial services firm headquartered in Moscow.

Kinet is a joint venture between India’s Rail Vikas Nigam Ltd (RVNL) with a 25 per cent stake, and Russian partners Metrowagonmash (70 per cent) and Locomotive Electronic Systems (5 per cent). The company is responsible for manufacturing 120 semi-high-speed Vande Bharat trainsets, each with a 16-coach configuration, under a manufacturing and maintenance contract awarded in September 2023.

Discussions with PNB began earlier this year to support working capital needs during the project’s initial phase. This loan is intended as a bridge arrangement until funding support is cleared by the Railways or RVNL.

Kinet had earlier sought ₹600 crore in funding from Russian banks after proposed changes in the train configuration required additional investments at the Latur facility—such as new sheds and garages. However, with the Railways deciding to proceed with the original contract terms, Sberbank has stepped in as the guarantor.

“There is some financing arrangement underway, and we are told mock-ups (prototypes) are ready,” said a senior Railways official.

The JV has already issued contracts worth ₹450 crore to CG Power for installation of engines, power systems, and electrical components. Additional tenders for interior design of the trainsets are expected shortly. Kinet did not respond to queries from businessline till the time of this article going to press. 

The project had faced delays due to prolonged discussions over train configurations. Originally set to produce 120 trainsets of 16 coaches each, the Railways later proposed an 80 trainset model with a 24-coach design, requiring substantial redesign and additional investment. Russian partners expressed reservations about the feasibility of the revised configuration, citing possible delays.

After extensive correspondence, the Railways reverted to the original 16-coach plan on February 13, 2025, avoiding immediate capital expansion at the Latur facility. “The 24-coach configuration required changes to coach composition, luggage space, pantry areas, and toilets to meet operational needs. Given the concerns raised, it was agreed to proceed under existing contract terms,” said a second Railways official. Production is expected to begin once the mock-up receives the necessary clearances.

The first prototype is likely to be ready by June 2026, after which testing and trial runs will begin, and train-making will start.