Government approves Rs 11,440 crore revival plan for debt-laden Rashtriya Ispat Nigam Ltd 

The Union Cabinet on January 17 approved a Rs 11,440 crore revival plan for the debt-laden Rashtriya Ispat Nigam Ltd (RINL) to reverse its fortunes. 

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the revival plan for RINL for Rs 11,440 crore, an official statement release said. 

The infusion includes Rs 10,300 crore as equity capital into RINL and conversion of Rs 1,140 crore working capital loan as 7 percent non-cumulative preference share capital redeemable after 10 years to keep RINL as a going concern. 

The equity infusion of Rs 10,300 crore into RINL will help it overcome the operational problems related to raising working capital and start blast furnace operations in the most productive way, the statement said. The financial condition of RINL is critical, it added. 

Information and Broadcasting Minister Ashwini Vaishnaw said that with this revival package many of the legacy problems that RINL used to face will be resolved.  

The revival package would allow the company to gradually reach its full production capacity, which is critical and to have stability in the Indian steel market by augmenting steel production, and also save the livelihoods of employees (regular and contractual). 

The revival plan envisages that RINL will start full production with two blast furnaces in January 2025 and with three blast furnaces by August 2025. 

Under the Ministry of Steel, RINL operates the Visakhapatnam Steel Plant (VSP), the only offshore steel plant in Andhra Pradesh. It has an installed capacity of 7.3 Mtpa of liquid steel. 

RINL has exhausted the sanctioned borrowing limits from banks for working capital and was not in a position to get further loans from banks. RINL also defaulted on the capex loan repayments and interest payments in June 2024.