Rashtriya Ispat Nigam stake sale plan likely to pick up pace this year

The Centre holds 100% in Visakhapatnam steel plant. RINL is the parent company of Eastern Investments Ltd (EIL), owning 51% in it

The process of the government selling its stake in the Visakhapatnam steel plant, or Rashtriya Ispat Nigam Ltd (RINL), is expected to accelerate this financial year (FY25).

The finance ministry is open to discussing all possibilities to revive the plant, a senior official told Business Standard.

The person said RINL was lacking in equity and was not financially healthy, raising questions about its capacity to draw in investment.

In January 2021, the Cabinet Committee on Economic Affairs (CCEA) gave “in-principle” nod for 100 per cent disinvestment in RINL through strategic privatisation.

The official, however, stated that political cooperation was crucial in determining whether the company, despite its significant potential, could be revived.

“The role of the state (Andhra Pradesh) government is important in this matter. I hope that more deliberation will lead to a solution,” the officer said.

“The steel ministry is learnt to have initiated talks with the state government and worked out some proposals,” the person said. 

The Centre holds 100 per cent in Visakhapatnam steel plant. RINL is the parent company of Eastern Investments Ltd (EIL), owning 51 per cent in it. EIL, in turn, is the parent company of Orissa Minerals Development Company (OMDC) and Birsa Stone Lime Company (BSLC), holding 50.01 per cent in each of these companies.

The government holds 15.79 per cent in EIL and 49.65 per cent in BSLC. It has no direct shareholding in OMDC.

The official said though the company was struggling, it held significant potential. “Its output has always been below 5 million tonnes. 

“However, with the right investment, it could produce 18 million tonnes.”

Last week Steel Secretary Nagendra Nath Sinha stated the steel ministry was seeking support from the finance ministry to help the company continue as a going concern. 

“Some discussion has taken place,” he said.

But the official cited above said: “We haven’t heard anything yet from the steel ministry or the political representatives of the plant.”