The Cabinet has entrusted the Alternative Mechanism with the responsibility of deciding whether to privatise the subsidiaries of RINL or not
RINL has a steel-making capacity of 6.3 million tonnes per annum (MTPA) and is looking to expand it to 7.3 MTPA
New Delhi: Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey has said that the Cabinet Committee on Economic Affairs (CCEA) has approved the privatisation of Rashtriya Ispat Nigam Ltd (RINL). In a tweet on Wednesday, Pandey said, “CCEA on 27th Jan 2021 has given in principle approval for 100 percent strategic disinvestment of GOI shareholding in RINL along with management control by way of privatization.” For FY2021-22, the government is aiming to raise Rs 1.75 lakh crore from minority stake sale and strategic disinvestment of PSUs.
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While presenting the Budget for the next financial year, Finance Minister Nirmala Sitharaman had said categorically that the government will not be in business in non-strategic sectors. The steel-making sector has been categorised as a non-strategic sector, according to the Budget document.
Alternative Mechanism to decide whether RINL subsidiaries will be privatised
The Cabinet has entrusted the Alternative Mechanism with the responsibility of deciding whether to privatise the subsidiaries of RINL or not, depending on the feedback received from potential investors. The plant has been operating with three blast furnaces since February 2020 to boost steel production. RINL also runs RINMOIL Ferro Alloys Pvt Ltd, an equal joint venture with MOIL Ltd, and RINL Powergrid TLT Pvt Ltd, another equal joint venture with Power Grid Corporation of India Ltd.
RINL has been making losses since FY17
RINL has a steel-making capacity of 6.3 million tonnes per annum (MTPA) and is looking to expand it to 7.3 MTPA. In FY2019-20, RINL incurred a loss of Rs 3,910 crore. Previously, the PSU had posted a nominal profit of Rs 97 crore in FY2018-19 and a net loss of Rs 1,369 crore in 2017-18. The revenue from operations stood at Rs 16,618 crore in 2017-18, Rs 20,844 crore in 2018-19 and Rs 15,920 crore in 2019-20.
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