The Government of India has provided a financial package of approximately ₹1,650 crore to support Rashtriya Ispat Nigam Ltd. (RINL) amid ongoing financial and operational challenges. The state-owned steel producer, which operates a 7.5 million-tonne plant in Visakhapatnam, Andhra Pradesh, has been facing severe cash flow issues, leading to temporary production cuts and the shutdown of two of its three blast furnaces.
According to a press release from the company, the funding package includes ₹500 crore in equity and a working capital loan of ₹1,140 crore, both disbursed in September 2024. The assistance aims to stabilize RINL’s operations and support continued production as the company navigates financial constraints.
In addition, SBICAPS, a subsidiary of the State Bank of India, is conducting a financial review of RINL to assess its sustainability and provide insights to the Ministry of Steel. This assessment is expected to play a crucial role in guiding future decisions regarding the company’s operational and financial strategy.
The Ministry of Steel, working with the Ministry of Finance, is considering various measures to support RINL’s immediate operational needs, even as the company proceeds with a disinvestment process. In January 2021, the Cabinet Committee on Economic Affairs (CCEA) granted in-principle approval for the government’s complete divestment of its stake in RINL, including its holdings in subsidiaries and joint ventures.
The government’s financial intervention reflects its efforts to maintain RINL’s viability while preparing for potential privatization. The upcoming results of the SBICAPS review will help determine the company’s long-term options, which may include additional restructuring or investment initiatives.