Kolkata-based Texmaco Ltd, the rail wagon maker is looking into transferring its heavy engineering division to a newly formed subsidiary in order to raise resources and unlock value.

The company plans to raise Rs 200 crore by selling part of its stake in the proposed new entity to private investors. The main objective behind setting up the subsidiary was to raise resources and take advantage of the emerging business opportunities in the sector. Texmaco will be the main holding company in the new venture.

The company has appointed ICICI Securities to identify private equity partners willing to invest in the new company.

Apart from this, the company has appointed Ernst & Young (E&Y) to examine options to raise resources through the subsidiary route.

The entire process of de-merger and raising resources is expected to be completed by next two to three months.

The company anticipates that it would get a better valuation for its wagon-making, process-engineering and foundry businesses, after the formation of new entity. The company plans to retain the real estate and hydro mechanical equipment division under the holding company.

Recently, Texmaco has signed a MoU with Australia's largest rail technology solutions provider United Group, under which it will manufacture modern rail coaches and wagons. The project cost is estimated at USD 50 million.