
NEW DELHI: The debt-laden Visakhapatnam-based public sector company -- Rashtriya Ispat Nigam Limited (RINL) -- has got a new lease of life after the Central government on Friday approved a revival package of Rs 11,440 crore for the company. Of the Rs 11,440 crore, Rs 10,300 crore will be in the form of fresh equity infusion and Rs 1,140 crore will be for converting the working capital loan into preferred share capital.
“With this revival package, many of the historical legacy problems that RINL used to face will be resolved. Simultaneously, a lot of effort is going to be put in securing the raw material for RINL and the modernisation of the plant,” said Ashwini Vaishnaw, Minister of Railways, Information & Broadcasting, and Electronics & Information Technology.
The minister said that very soon RINL will start functioning with two glass furnaces, and by August this year, all the three glass furnaces would be operational. Vaishnaw further said that RINL has a very special position in the entire steel industry -- it is one of those plants, which is located at the coastal Andhra Pradesh in Vizag, and is very important for the overall steel sector of the country.
RINL has been under financial distress for quite some time, reporting losses and mounting debt for almost a decade now. In FY24, the company posted net losses of Rs 4,850 crore compared to Rs 2,850 crore in the previous year. The company’s total debt at the end of FY24 was at Rs 17,000 crore.
The Navratna PSU company has over 13,000 employees. The company has a total capacity of 10.8 million tonnes of manufacturing capacity. The Union government, which was once considering privatisation of RINL but had to stall the process after political opposition, had last year infused Rs 1,650 crore to help it tide over financial and operational issues.
According to Vaishnaw, the revival package would immensely benefit all employees of RINL and all the people connected with the economic activities of the company.
Revival package
In a post on X, PM Narendra Modi said the Visakhapatnam Steel Plant has a special place in the hearts and minds of the people of AP, and the revival package has been given “understanding the importance of the steel sector in building an Atma Nirbhar Bharat”.