Centre Readies Fresh ₹8,097 Crore Equity Infusion for RINL; SAIL Merger Debate Returns – Indian PSU

In a significant move to keep loss-making Rashtriya Ispat Nigam Limited (RINL) operational, the Central Government is preparing a fresh ₹8,097 crore equity infusion for the Visakhapatnam Steel Plant, marking yet another major rescue package for the steel PSU.

The proposed assistance comes after the Centre had already extended:

• ₹1,640 crore interim support during FY25, and
• ₹11,440 crore comprehensive revival package in January 2025.

With the latest proposal, total direct government financial commitment towards RINL’s revival would cross ₹21,000 crore, underlining the seriousness of the PSU’s continuing financial stress.

Operations Improved, But Core Viability Question Remains

The earlier support helped RINL restart its second and third blast furnaces, improve production and report positive EBITDA in the closing quarter of FY25. Its net worth also turned positive at ₹1,137 crore from a negative ₹4,538 crore a year earlier.

However, PSU sector experts say the company’s revival still remains fragile because the fundamental issue has not been resolved:

RINL still has no captive iron ore mines.

Without assured low-cost raw material supply, the steelmaker continues to face higher production costs than its competitors, making repeated equity support only a temporary solution.

Privatisation Stalled, Centre Forced Into Revival Route

The Centre’s long-discussed privatisation plan for Vizag Steel has virtually remained in cold storage amid political resistance from Andhra Pradesh and opposition from employees and unions.

As a result, New Delhi now appears to be shifting from a disinvestment strategy to a state-funded revival strategy.

This fresh infusion clearly signals that the government is unwilling to let RINL slide further, considering the PSU’s strategic significance as India’s only shore-based integrated steel plant.

SAIL Merger Demand Likely To Gather Momentum

With another bailout now on the table, long-pending demands of workers and executives for merger of RINL with Steel Authority of India Limited are expected to gain fresh traction.

Supporters of the merger argue that SAIL can provide:

• raw material integration,
• stronger balance sheet support,
• procurement efficiencies,
• and marketing synergies,

which standalone RINL currently lacks.

Indian PSU Take

The proposed ₹8,097 crore infusion may keep Vizag Steel running, but it also raises a serious policy question:

How long can RINL survive on repeated taxpayer-funded bailouts without structural reforms like captive mines, debt restructuring or strategic merger?

Unless these deeper issues are addressed, RINL may remain not a fully revived PSU — but a periodically rescued PSU.