Despite the state-owned steel maker Rashtriya Ispat Nigam ltd (RINl) disinvestment process having been deferred thrice earlier owing to various factors, the Government does not seem to have given up on it and the company keeping this prospect in mind, plans to infuse Rs 60,000 crore to take its capacity to 20 million tonnes by 2027.
In addition to this, RINl also plans to become a multi-unit company, as apart from entering into an agreement with Indian Railways to set up a forged wheel factory in Rae Bareli which would produce annually one lakh wheels, it is planning to set up an axle plant in New Jalpaiguri (West Bengal) that will annually produce 50,000 axles and will be ready within the next 42 months. Combined investment in both the plants would be Rs 1,500 crore.
Apart from these two plants, RINl Chairman A P Chaudhary said that it is in the process of acquiring two iron ore mines in Rajasthan.
"While we have acquired a mine in Purna Banera in Rajasthan, another one in Jahazpur is also coming our way, as the state government Cabinet has cleared it and now the Union Mines Ministry has to give its assent," Chaudhary said.
He informed that both the mines have a combined iron ore capacity of more than 650 million tonnes and also contain low grade magnetite."We also plan to set up two beneficiation and pelletisation plants of 5 million tonnes per annum capacity each in the state as the two mines also contain reserves of low grade magnetite," the RINl chief added.
He claimed though that the company's ambitious capacity expansion plan (under which RINl will be doubling its existing capacity from 3 million tonnes per annum to 6.3 million tonnes per annum by 2016-17) is very much on the rails and under this it will be setting up a wire rod mill and a steel melting shop.
By 2027, Chaudhary said the company would be taking its capacity to 20 million tonnes for which it would invest Rs 60,000 crore. By the end of the current fiscal, he said, RINl would be achieving Rs 1,700 crore of capex to meet required expansion expenses.
When asked however as to whether RINl's disinvestment proposal is being revived as the company is planning so many ventures in the near future, Chaudhary chose not to comment.
RINl's Initial Public Offer (IPO) was deferred in October last year owing to differences on the share price band between the Steel Ministry and the merchant bankers. Prior to this, it had been deferred on two other occasions.
last year before the RINl IPO got deferred, the company had even filed the Red Herring (or Preliminary) Prospectus with the Registrar of Companies for an IPO of 488,984,620 equity shares of Rs 10 each by way of an offer for sale. The offer was proposed to open on October 15, 2012 and close on October 18, 2012.
Meanwhile Chaudhary further informed that the company has revived an earlier plan of setting up a 4 million tonnes new unit for producing flat products. He hinted that it could be set up through a joint venture and is likely to be commissioned by 2019-20.