RINL starts talks with banks to raise up to Rs 600 cr debt

Company is in the final stages of commissioning its capacity expansion to 6.3 million tonnes per annum

Debt image via Shutterstock

Rashtriya Ispat Nigam (RINL) has started discussions with domestic lenders to raise as much as Rs 600 crore of debt to part-fund its capital expenditure plan for the current financial year.

"We have a Rs 1,535 crore capex programme for the current fiscal. Out of this, up to Rs 1,000 crore will be funded from internal accruals and for the remaining, we will raise between Rs 500 crore and Rs 600 crore debt," RINL Managing Director P Madhusudan told PTI.

The Vizag-based state-owned steel maker, which is in the final stages of commissioning its capacity expansion to 6.3 million tonnes per annum from 2.9 million tonnes, said the funds would be raised by way of loans from domestic banks and discussions are on with potential lenders.

"Some banks are in touch with us and we have asked them to come with loan products and after evaluating the pros and cons, we will take a final decision. We will take the amount in tranches as per our need," Madhusudan said.

RINL is comfortably placed to exercise the debt route as its debt-to-equity ratio is below one, he said.

State Bank of India, the country's largest lender, last year extended a Rs 2,650 crore capex loan facility to RINL for its expansion project and has disbursed part of it. The agreement expired at the end of the previous financial year.

RINL is increasing its steel-making capacity at its lone Vizag facility with an investment of Rs 12,500 crore.

Besides, the company plans to invest an additional Rs 7,000 crore towards modernisation of its existing plant, which would raise its capacity further to 7.3 million tonnes a year.

RINL aims is targeting a 48% increase in turnover to Rs 20,000 crore in this financial year and expects it to rise to Rs 30,000 crore by 2016-17.