The Cabinet Committee on Economic Affairs (CCEA), under the leadership of Prime Minister Narendra Modi, approved a revival package worth Rs 114.40 billion for Rashtriya Ispat Nigam (RINL) to tackle the financial challenges faced by the state-owned steel producer. The package includes Rs 103 billion for equity infusion and the conversion of Rs 11.40 billion in working capital loans into 7 per cent non-cumulative preference share capital, redeemable after 10 years.

RINL, a Schedule-A Central Public Sector Enterprise under the Ministry of Steel, operates the Visakhapatnam Steel Plant (VSP) in Andhra Pradesh, with a production capacity of 7.3 million tonnes per annum (Mtpa) of liquid steel. However, the company has faced significant financial stress, reporting a net worth of Rs (-)45.38 billion as of March 31, 2024, current assets of Rs 76.86 billion, and liabilities of Rs 261.14 billion. Additionally, RINL has been unable to meet its capex loan repayments and interest obligations since June 2024.

Union officials emphasised the crucial role of the revival package in ensuring the operational sustainability of RINL and stabilising the Indian steel market. A government official stated that the equity infusion would enable RINL to address working capital constraints and restart its blast furnaces, allowing the company to achieve its full production capacity.

As part of the revival plan, two blast furnaces are expected to resume operations by January 2025, with all three becoming fully operational by August 2025. This move is considered essential for boosting domestic steel production, which plays a vital role in the country’s economy.

An official statement highlighted that the revival of RINL is not only critical for stabilizing the steel market but also for safeguarding the livelihoods of thousands of employees and contractors reliant on the plant’s operations. Steel production is recognized as a core economic sector and a key indicator of industrial growth. The decision aligns with the objectives of the National Steel Policy, 2017, which advocates for efficient resource utilization and self-reliance in steel production.

The statement further noted that the revival plan underscores the government’s commitment to supporting indigenous industries as part of the Atmanirbhar Bharat initiative.