Steel Executives Federation of India (SEFI) has written to the Prime Minister, seeking immediate merger of the loss-making Neelachal Ispat Nigam Ltd (NINL) with the bigger state-run steel maker Steel Authority of India Ltd (SAIL).
The proposed merger would be a “hassle-free process” since it involves transfer of shares by Metals and Minerals Trading Corporation of India (MMTC) and other public sector undertakings (PSUs) to SAIL, said Bimal Kumar Bisi, general secretary, SEFI.
SAIL had tried to take over NINL several times in 2007, 2010, and 2014 but it could not materialise as the Ministry of Commerce and Industry was not willing to give away India’s largest pig iron producer, according to sources.
State-run trading company MMTC, which falls under the administrative control of the commerce ministry, is the principal promoter of NINL. Bisi, however, argued that MMTC has decided to quit NINL, so it will be prudent to revive the earlier proposals of merging NINL with the steel giant.
Besides, the two others key promoters — Odisha Mining Corporation and Industrial Promotion and Investment Corporation of Odisha Ltd (IPICOL) — which own 26 per cent stake are also no longer keen to retain their stakes. Central public sector enterprises like NMDC, BHEL Ltd and Mecon are among other minor equity participants in NINL.
The steel executives body noted that the state-run steel maker has massive expansion plan and roadmap is being prepared to enhance its present capacity from 21.42 to 50 million tons by 2031 in two phases. In line with this, SAIL has recently planned to set up a second steel plant of three million ton capacity in Odisha.
Neelachal Ispat Nigam Ltd’s strong side
It is a 1.1 million tons operating plant with all auxiliary units and undisputed land of over 2,500 acres, which is sufficient for expansion upto 5 MTPA. It has captive mine of 874.29 hectares, 110 MT of estimated reserve, with an average iron content of 65%