The Indian government will not go ahead with the privatization of state-run steel producer Rasthriya Ispat Nigam Limited (RINL), junior steel minister Faggan Singh Kulaste said on Friday, April 14.
On the sidelines of an event, he said, “The central government will not proceed with the privatization of RINL and instead will strengthen the company.”
It may be noted that on January 27, 2021, the Cabinet Committee of Economic Affairs (CCEA), the central government’s apex decision making body, approved the privatization of RINL through disinvestment of 100 percent of government-held equity in favor of private investors through competitive bidding.
Since then, the proposed privatization of RINL faced stiff opposition from workers and employees and snowballed into a major political issue with almost every opposition party at the state and central government level launching protests against it.
RINL operates a 7.3 million mt steel mill at the port town of Vishakhapatnam in the southern state of Andhra Pradesh.
Several steel sector analysts pointed out that RINL is the only large steel mill in the country without a captive source of iron ore and any first step towards improving its viability will need to allocate an iron ore block to the company and enable it to reduce the cost of raw materials.
They said that since RINL is facing an acute working capital shortage, the move to monetize the large surplus of land available with it had to be speeded up.
In the longer term, RINL, producing only long products, would need to add new downstream units including a flat products rolling mill, to diversify its product portfolio, increase market share and improve operational margins, the analysts said.