VISAKHAPATNAM: The disinvestment of the Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP) will spur its growth, bringing more transparency and best practices indirectly in the long run. It will also pave the way for the central public sector enterprises to become a listed company opening doors for IPO, said chairman and managing director of RINL P. Madhusudan.
Mr Madhusudhan interacted with the media after reviewing the performance of the steel plant here on Friday. He said the RINL had recovered well in the curre-nt financial year (2017-18) and was all set to register Rs 100 crore operational profit. The company had achieved a turnaround during the current fiscal after hitting the recovery path in 2016-17.
Replying to a question on disinvestment of RINL, the CMD said the Union government would be taking a decision soon and it had already proposed to disinvest 10 per cent of the stake, amounting to around `490 crore.
The disinvestment may indirectly help the growth of RINL as several stakeholders will monitor the performance of RINL and will find out best practices for the bright future of RINL, he added.
“The AP government was using its steel products in construction works in the new capital, Amaravati, and the Polavaram irrigation project on the Godavari.
However, we produce only long products and they need mostly flat products. Of the long products used in construction, we are getting the lion’s share,” he said.
The RINL is all set to register `100 crore operational profit by the end of 2017-18 fiscal year after two slump years and if all goes as per plans the profit trend will continue in the coming years, said the CMD.
The CMD said they had managed to reduce the net loss by `400 crore to around `900 crore and are expecting to achieve break-even and an operational profit of `100 crore in the current fiscal and also expecting a good growth in 2018-19.
Speaking on the expansion project and modernisation of RINL, Mr Madhusudan said the RINL had successfu-lly completed its expansion project (doubling the original capacity to 6.3 MT) and added an ad-ditional million tonnes by taking up a modernisation project, taking the total capacity to 7.3 MT.
RINL had invested over `16,000 crore for expansion and modernisation, of which over 60 per cent was invested through internal accruals while the remaining was through bank loans, he said.