Centre plans ₹8,097 crore equity infusion for RINL revival in Visakhapatnam

According to a senior official of the state government, who preferred anonymity, the proposed ₹8,097-crore infusion would be in the form of equity. It is expected to provide immediate operational relief to the RINL, which has been under severe financial stress due to lack of captive coal mines, forcing the company to spend huge amounts on imposing the raw material, including coal, iron ore and coke.

“The Union finance ministry has approved the financial package last week and it is expected to be formally announced after ratifying the decision in the next Union cabinet meeting,” the official said.

A senior trade union leader of the Vizag steel plant V M Naidu confirmed the development. “We have received the information a couple of days ago. The financial package will breathe in fresh life into the steel plant and will definitely help the company improve its production capacity in the coming days,” Naidu said.

Another trade union leader J Ayodhya Ramu of Centre of Indian Trade Unions (CITU) said the came up for discussion during the visit of Union minister of steel H D Kumaraswamy, along with minister of state for steel Bhupatiraju Srinivasa Varma, to the RINL on March 23.

“The Union minister conducted a comprehensive review of the company’s performance assured the Centre’s support for the revival and growth of the steel plant. He inspected key units including the coke oven batteries, blast furnace-3, and the wire rod mill and interacted with employees to understand their problems,” Ramu said.

He recalled that last year itself, the trade unions had requested the Centre to announce a bail-out package of ₹ 20,000 crore. “The latest package is part of the commitment made by the Centre,” the union leader said.

During 2024-25, the RINL received interim support of ₹ 1,640 crore, including ₹500 crore in equity and ₹ 1,140 crore as a working capital loan. This assistance enabled the recommissioning of the second blast furnace in October 2024.

Subsequently, in January 2025, the government approved a comprehensive revival package worth ₹ 11,440 crore. This included ₹10,300 crore in equity infusion and conversion of the ₹ 1,140 crore loan into 7% non-cumulative redeemable preference shares.

“Additionally, the state government supported the revival by converting around ₹ 2,000 crore worth of power and water dues into preference shares.

These combined measures helped stabilise operations, allowing the plant to restart all three blast furnaces — with the third becoming operational in June 2025 — and ramp up production to nearly 93% capacity,” the state government official quoted above said.

According to the trade union leaders, the RINL which operates India’s only shore-based integrated steel plant, currently has a production capacity of around 7–7.3 million tonnes, with the potential to expand up to 17 million tonnes with fresh investments. It also possesses a substantial land bank of 19,000 acres, including a 6,000-acre green belt.

However, the RINL is still facing higher production costs compared to private and integrated steel producers, making it dependent on repeated government support.

“For now, the Centre has stalled its original plan of privatising the RINL due to strong push back from the employees and trade unions. But unless the Centre assigns captive mines to the RINL and brings down its dependence on the imports, the company will have to continue to face the financial stress,” Ramu said.