The Government of India has injected approximately ₹1,650 crore into Rashtriya Ispat Nigam Ltd. (RINL) to address the company’s severe financial and operational challenges. RINL, a major player in India’s steel industry, has been grappling with significant cash flow issues, which led to operational cutbacks and the temporary shutdown of two of its three blast furnaces at its 7.5 million tonne steel plant in Visakhapatnam, Andhra Pradesh.
The recent financial infusion consists of ₹500 crore towards equity and a working capital loan of ₹1,140 crore, both disbursed in September 2024. This support aims to stabilise RINL’s operations and ensure it continues as a viable enterprise. Meanwhile, SBICAPS, a subsidiary of the State Bank of India, is conducting an in-depth analysis of RINL’s financial sustainability, which will provide the Ministry of Steel with critical insights to guide future decisions.
The Ministry of Steel, in coordination with the Ministry of Finance, is actively engaged in evaluating and implementing measures to keep RINL operational. This support comes as part of the government’s broader efforts to safeguard public sector undertakings within the steel industry, despite RINL’s ongoing disinvestment process. In January 2021, the Cabinet Committee on Economic Affairs (CCEA) gave preliminary approval for a full divestment of the government’s stake in RINL, including its holdings in subsidiaries and joint ventures.
The recent cash infusion reflects the government’s commitment to maintaining RINL’s viability, even as its privatisation progresses. This decision highlights the balancing act between supporting RINL’s immediate financial needs and preparing for a potential transition to private ownership.
The situation at RINL underscores the broader challenges within India’s steel sector, as companies face rising operational costs and intense competition. With the government’s intervention, RINL aims to stabilise operations, manage debt obligations, and maintain its standing within the sector. The outcome of SBICAPS’s review will be a key factor in determining RINL’s long-term strategic path, which may involve further restructuring or investment initiatives as the company looks to sustain its position in India’s steel industry.
