The Ministry of Steel said in an official statement that the Government has invested Rs 1,650 crore in state-owned Rashtriya Ispat Nigam Limited (RINL) to tackle its financial issues. RINL is a public sector undertaking (PSU) under the Ministry of Steel, Government of India. It is also known as Vizag Steel and is the corporate entity of Visakhapatnam Steel Plant (VSP).
“In this regard, the Government of India has infused Rs 500 crore towards equity on September 19, 2024, and a working capital loan of Rs 1,140 crore on September 27, 2024,” according to the document.
SBI Capital Markets Limited (SBICAPS), a subsidiary of SBI is preparing a report on the sustainability of RINL, said the statement. “RINL is in serious financial trouble, and the (Steel) Ministry is taking several steps to keep RINL as a going concern in consultation with the Ministry of Finance,” it added.
RINL operates a 7.5-million-tonne plant in Visakhapatnam, Andhra Pradesh, but has been struggling with financial and operational challenges. Two out of the three blast furnaces were shut down until October 2028, when the second blast furnace resumed operations after nearly 4-6 months. As a result, the total amount owed by RINL is more than Rs. 35,000 crores.
The government’s decision to privatize the company has sparked opposition from workers’ unions, arguing that one of the primary reasons for RINL’s current crisis is its lack of access to captive iron ore mines.