After a three-month dream run, Indian steel companies have begun to feel the downside of the several rounds of price hikes. Financial institutions, which had been flooded with requests by troubled steelmakers to lower interest rates, have shown their disinclination to entertain such life-saving requests, citing improved cash flow as the reason.
Senior executives of some of the steel companies, said they were going back to the drawing board to review proposals of lowering interest rates as part of the debt-restructuring plans of some of the beleaguered steel companies.
Most steel companies have an average cost of borrowing of 17-18 per cent, and have sought a lowering of rates to around 14 per cent. Companies that had sought restructuring of their debt include Jindal Vijaynagar Steel (JVSL), Jindal Iron and Steel (JISCO), Ispat Industries, Mukand, Essar Steel and Lloyds Industries.
Confirming the development, a director of a financial institution said:
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