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New Delhi, February 17 The Centre is planning to hive off the forged wheel unit of state-owned Rashtriya Ispat Nigam Ltd (RINL) – the second largest steel CPSE – while monetisation of two land parcels adding up to 24 acres are also on the cards.
A report of the Steel Ministry, accessed by businessline, show that plans are afoot for “outsourcing of operation and maintenance of Forged Wheel Plant to a private agency so that the plant can be optimally utilised” and “be a source of revenue for RINL”.
Plant’s capacity
The forged wheel plant, a unit of RINL at Lal Ganj, Rae Bareli, UP, has a capacity of one lakh forged rail wheels per year with a provision to expand the capacity up to two lakh wheels per year. Production and supply to Indian Railways are as per the off-take agreement.
In September 2022, RINL had invited expression of interest (EOI) from eligible and interested parties for “Total operation of forging, heat treatment, machining, wheel testing, storing and maintenance of all equipment at Forged Wheel Plant”. Officials in the know said two companies had expressed interest in operating the plant and their bids were being evaluated.
The Ministry report also talks of monetisation of “two land parcels of RINL measuring 24 acres” so that the company “can generate cash to sustain its core business”. “In-principle approval was scheduled to be obtained through core group of secretaries on divestment on January 30”.
“DIPAM is awaiting inputs from the transaction advisor in both the cases,” the official said.
Previous proposals include hiving off the forged wheel plant of the PSU to SAIL to ensure liquidity for the steel-maker had been shot down as not possible. There was another proposal, where a bridge loan of ₹1,000 crore from NMDC – the country’s largest iron ore miner and another CPSE under Steel Ministry – was to be arranged. This bridge loan was to be repaid before FY23-end.
In a recent response to Parliament, Minister of State for Steel, Faggan Singh Kulaste had acknowledged the poor financial condition of RINL and said that recruitments at the PSU “has been rationalised”.
“RINL has outsourced selected non-core activities and redeployed the employees in core activities to meet the operational requirement,” he had said.
The Minister had also said there are no plans to pool funds through IPO or issue of government bonds for collateral free loans.
RINL’s FY22 annual report shows a turnover of ₹28,215 crore; and a net profit of ₹913 crore. Saleable steel production stood at 5.1 million tonnes. Loans were at ₹17,148 crore – which include ₹12,343 crore of secured loans and ₹4,805 crore of unsecured ones.
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