Abe hopes that will make Japan the front-runner if India implements five other planned lines.
Bharat Heavy Electricals Ltd. jumped the most in a year after Japanese Prime Minister Shinzo Abe said the Indian power-equipment maker would partner with Kawasaki Heavy Industries Ltd. to make rolling stock for the South Asian nation’s first bullet-train project.
“If Japan’s high-end technology and India’s capable human resources partner, then India can become the factory of the world,” Abe said in a speech in the western Indian city of Ahmedabad on Thursday, announcing the tie-up between the two firms.
The $17 billion project is an opportunity for BHEL, which has been battling slowing orders and pricing competition in India’s power generation equipment business. The country’s financially weak power retailers have been unable to distribute all the electricity the nation can produce, leaving power stations under-utilized and stalling new investments.
BHEL rose as much as 10.2 percent to 145.85 rupees, the biggest gain since Sept. 7, 2016. The shares traded at 142.80 rupees as of 12:30 p.m. in Mumbai, while Kawasaki Heavy was up 1.7 percent.
Earlier on Thursday, Indian Prime Minister Narendra Modi and Abe formally inaugurated the project that will link the financial capital of Mumbai to the economic hub of Ahmedabad. The 316-mile line is expected to start operations in 2023. Japan has said it will fund 81 percent of the costs.