Centre helps financially to Rashtriya Ispat Nigam Limited; Know about crisis the government company facing

Rashtriya Ispat Nigam Limited has received Rs 1650 crore in financial help from the Central Government (RINIL). An official document states that this government company, which is currently dealing with a financial and operational crisis, has steadily expanded its debt. Now, the Union Steel Ministry has taken action to put a stop to the crisis.

The ministry said that it is taking several steps to run RINL. The government said that it has given Rs 500 crore to RINIL as equity on 19 September 2024. At the same time, on 27 September 2024, it has given Rs 1140 crore to it as a working capital loan.

The government has also sought a viability report on RINL from SBICAPS-a fully-owned subsidiary of State Bank of India (SBI). The internal document also mentioned that RINL is suffering from acute financial distress, and the Ministry of Steel is holding consultations with the Ministry of Finance on the issue.

Of importance to note is that Rashtriya Ispat Nigam Limited (RINL) is a steel production company belonging to the Union Ministry of Steel, having its 7.5 million tonnes plant at Visakhapatnam, Andhra Pradesh. The company has been facing several monetary and operational problems during the last few years.

Although two out of its three blast furnaces were closed, reportedly until October 2028, it has resulted in an increase in the debt on RINL, which increased to 35 thousand crores.

The Cabinet Committee on Economic Affairs (CCEA) had earlier in January 2021 given an in-principle approval for 100% disinvestment of the government stake in RINL through strategic disinvestment. However, the proposed privatisation of the company had been a bone of contention with labour unions opposing the government's decision. They said RINL does not have iron ore mines for its own use. Due to this, it is facing the current crisis.