The executive vice-chairman of Texmaco Ltd, Mr. Saroj Poddar announced on Monday that the company, which deals with making of rail wagons, is planning to hive off its total manufacturing business to a separate arm to strengthen its business.

By selling part of its stake in the proposed new entity to private investors, the company is looking forward to raise Rs 200 crore. The holder of the company would be Texmaco.

To draw out the modalities for raising the amount, the company has appointed ICICI Securities.

By September 2009, the company would be capable of making 40 wagons per day, whereas presently it is manufacturing 20 wagons per day, Mr. Poddar said in the annoucement.

The investments and real estate businesses would be retained by the parent company.

In a couple of months, the company may finalize the plan to hive off its manufacturing business.

Mr. Poddar clarified, “We have appointed Ernst & Young to draw the blueprint and it will give its final report shortly.”

The complex work of restructuring is expected to be finished by March 2009.

The company expects to get a better valuation for its wagon-making, process-engineering and foundry businesses once the new entity is formed, explained Mr. Poddar.