The Central government has announced a financial package of Rs 11,440 crore for the revival of the Visakhapatnam Steel Plant (Rashtriya Ispat Nigam Limited). The announcement was made by Union Minister of Information and Broadcasting Ashwini Vaishnaw on Friday and was later confirmed during a Cabinet Committee on Economic Affairs (CCEA) meeting chaired by Prime Minister Narendra Modi. 

Visakhapatnam Steel Plant is a Schedule-A Central Public Sector Enterprise (CPSE) under the Ministry of Steel, with a current installed capacity of 7.3 million tonnes per annum (MTPA). The revival package includes an equity infusion of Rs 10,300 crore and the conversion of Rs 1,140 crore of working capital loans into 7% non-cumulative preference share capital, redeemable after 10 years, to ensure RINL remains a going concern. 

The equity support will allow RINL to address operational challenges, raise working capital, and gradually achieve full production capacity of 7.3 MTPA. It is expected to stabilise the Indian steel market, protect livelihoods, and enable the plant to operate at full capacity, contributing significantly to the economy. 

Describing it as the largest package ever for RINL, Vaishnaw highlighted the strategic importance of VSP, the only offshore steel plant in the country under government ownership. He noted that the package would enable the activation of two blast furnaces by January 2025, with all three blast furnaces set to be operational by August 2025, significantly increasing production. 

In a post on X (formerly Twitter), Prime Minister Modi remarked that the Visakhapatnam Steel Plant holds a special place in the hearts of the people of Andhra Pradesh. 

“During yesterday’s Cabinet meeting, it was decided to provide equity support of over Rs 10,000 crore for the plant. This has been done understanding the importance of the steel sector in building an Aatmanirbhar Bharat,” he said. 

Elaborating on the package, Union Minister of Steel HD Kumaraswamy said privatisation of RINL will not be considered following the capital infusion. “This decision honours the sentiments of the people of Andhra Pradesh. The government is committed to protecting the plant and ensuring its growth,” he asserted. 

The Minister outlined how the package became a reality through persistent efforts and multiple review meetings with stakeholders, including the Finance Minister and bankers. He assured that all three blast furnaces would reach over 92% production levels by mid-2025. 

RINL has been grappling with severe financial and operational challenges. Its total liabilities have exceeded Rs 35,000 crore, with defaults in loan and interest payments. The Steel Plant began facing issues when the plant expanded its capacity from 3 MTPA to 7.3 MTPA between 2014 and 2017, funded by loans at high interest rates. Additionally, the lack of captive iron ore mines forced the plant to rely on expensive raw materials from the open market, further straining its financial position. Kumaraswamy revealed that efforts are underway to secure captive iron ore mines for RINL from Odisha, which would significantly reduce costs and stabilise operations. He expressed confidence in transforming RINL into India’s leading steel producer, a goal he described as both a challenge and a commitment. 

Union Ministers Ram Mohan Naidu and Bhupathi Raju Srinivasa Varma also welcomed the package. They thanked Prime Minister Modi for fulfilling the long-standing demand to protect the Vizag Steel Plant. “The Centre has kept its promise and safeguarded the rights of Andhra Pradesh,” Ram said.