The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the revival plan for RINL for a total of Rs 11,440 crore.

“The infusion includes Rs 10,300 crore as equity capital into Rashtriya Ispat Nigam Ltd. (RINL) and Conversion of Rs 1,140 crore working capital loan as 7 per cent Non-cumulative Preference Share Capital redeemable after 10 years to keep RINL as a going concern,” the Ministry of Steel said on Friday.

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The RINL is a Schedule–A CPSE under the administrative control of the Ministry of Steel with 100 per cent ownership of the Government of India. RINL operates the Visakhapatnam Steel Plant (VSP), the only offshore steel plant under the Government sector in the state of Andhra Pradesh. It has an installed capacity of 7.3 Mtpa of liquid steel.

The financial condition of the RINL is critical (as on 31.03.2024, the net worth of RINL was Rs (-)4538.00 crore, current assets were Rs 7,686.24 and current liabilities were Rs 26,114.92 crore).

The RINL has exhausted the sanctioned borrowing limits from banks for working capital and was not in a position to get further loans from Banks. It also defaulted on the Capex Loan repayments and Interest payments in June 2024.

The equity infusion of Rs 10,300 crore into RINL will help overcome the operational problems related to raising working capital and start Blast furnace operations in the most productive way. This would allow the company to gradually reach its full production capacity which is critical and is in the national interest to have stability in the Indian steel market by augmenting steel production and also save the livelihoods of employees (regular and contractual) and those dependent on the operations of the steel plant. The revival plan envisages that RINL will start full production with two blast furnaces in January 2025 and with three blast furnaces August 2025.

Steel production is a core sector of the economy and is one of the indicators of economic development of any country. The revival and continued operation of VSP at its full capacity will ensure efficient utilization of public resources and help in achieving the objectives of National Steel Policy, 2017.

This strategic decision underscores the Government’s steadfast commitment to supporting indigenous industries for Atmanirbhar Bharat.