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Government infuses Rs 1,650 cr in RINL as a financial aid

  • by Psu Connect
  • Date: 04-11-24

Rashtriya Ispat Nigam Ltd (RINL), under the Ministry of Steel, is a steel manufacturing company. It owns a 7.5 million tonne plant at Visakhapatnam in Andhra Pradesh.

Government infuses Rs 1,650 cr in RINL as a financial aid
Government infuses Rs 1,650 cr in RINL as a financial aid

The government has invested approximately Rs 1,650 crore in the state-owned company RINL, which is facing operational and financial challenges, according to an official document. The Ministry of Steel has stated that the government is implementing various measures to ensure that RINL remains a viable entity. Specifically, the Government of India contributed Rs 500 crore in equity on September 19, 2024, along with a working capital loan of Rs 1,140 crore on September 27, 2024.

 SBICAPS, a wholly-owned subsidiary of the State Bank of India (SBI), is preparing a report on the sustainability of RINL. "RINL is in serious financial trouble, and the (Steel) Ministry is taking several steps to keep RINL as a going concern in consultation with the Ministry of Finance," it added.

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Rashtriya Ispat Nigam Ltd (RINL), under the Ministry of Steel, is a steel manufacturing company. It owns a 7.5 million tonne plant at Visakhapatnam in Andhra Pradesh.

The company has been facing severe financial and operational issues. Two of the three blast furnaces (BF) were closed till October 2028, when the second BF was made operationalized after nearly 4-6 months. The overall dues of RINL have gone above Rs 35,000 crore.

In January 2021, the Cabinet Committee on Economic Affairs (CCEA) gave its 'in-principle' approval for 100 percent disinvestment of government stake in RINL, also called Visakhapatnam Steel Plant or Vizag Steel, along with RINL's stake in its subsidiaries/joint ventures through strategic disinvestment by way of privatization. The government's decision to privatize the company has attracted resentment from workers' unions, which cite RINL not having the advantage of having captive iron ore mines as one of the major reasons for the crisis being faced by the company.
 

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