Rising Demand For Merger Of RINL, NSL With SAIL

Visakhapatnam: A prominent BJP leader and Independent Director of SAIL Sagi Kashi Viswanatha Raju disclosed that the Centre instead of disinvestment of cash-strapped Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of Visakhapatnam Steel Plant, is considering reinvestment to wriggle it out of the current crisis.

He said that the long-term solution to ensure a bright future for the Indian steel industry is the mega amalgamation of RINL and NMDC Steel Limited (NSL) with SAIL. “The making of a single entity by bringing both RINL and NSL under SAIL will make it a giant public sector entity and put a permanent solution to the problems faced by the three entities under the administrative control of the Ministry of Steel,” he told Bizz Buzz inan exclusive.

Viswanatha Raju, fondly called Kashi said this will enable RINL to overcome its raw material insecurity and further capacity augmentation, NSL not to go under hammers for privatisation and SAIL to go ahead with a massive expansion plan. He opined that adding capacity in a brownfield plant is always more viable than a greenfield plant.

He said the Ministry of Steel has pumped in nearly Rs 1700 crore into RINL to tide over working capital crunch. At present, the mandarins in the ministry are in the process of finalising a plan for capital restructuring of RINL. The second blast furnace has already been revived. SAIL is holding talks with the suppliers to not take hasty decisions on pending amounts. The banks are being told to defer interest and loan payments so that RINL’s credit worthiness goes up. These are part of an immediate plan to bail out, while making it clear these steps are not the permanent solution.

Stating that efforts are on to convince the top leadership of BJP to consider the mega amalgamation of the three entities, he said SAIL+RINL+NSL if brought under one entity will become the 10th largest steel producer globally. The combined steel-making capacity of these three CPSEs is around 30.3 million tonnes with SAIL having a capacity of 20, RINL 7.3 and NSL 3 million tonnes.

While SAIL has both flat and long steel products in its product-mix, RINL is a long steel product plant and NSL a flat steel product plant. He said the amalgamation of the three CPSEs will create a mega steel CPSE, majorly owned by government of India having a capacity of around 30.3 MT, making it tenth largest steel producer (as per World Steel Association ranking for 2023).

The new entity will have a potential to increase its capacity to 50 MT very quickly. Advantages of the mega steel CPSE include economy of scale in operation/procurement, rationalisation of resources, marketing synergy, potential to grow at a faster rate (both organically and inorganically).