Indian steel giant, Tata Steel, has expressed an interest in the acquisition of Rashtriya Ispat Nigam Limited (RINL), also called Visakhapatnam Steel Plant or Vizag Steel. This is one of the first such announcements after the Central Government green signalled the privatisation of RINL.
Tata Steel Chief Executive Officer (CEO) and Managing Director, T V Narendran revealed that the company is interested in the acquisition of RINL/Vizag Steel and also talked about the business opportunity behind this move. “Yes! Also, because of inorganic growth for long product opportunities. There is a great opportunity because it is east as well as it is south, it is a coastal plant so there are many advantages,” he told PTI.
Mr. Narendran also added that Tata Steel has submitted an Expression of Interest (EoI) for Odisha-based steel maker Neelachal Ispat Nigam Ltd (NINL) as well. NINL is a joint venture company, in which four central PSUs — Minerals and Metals Trading Corporation (MMTC), National Mineral Development Corporation (NMDC), Bharat Heavy Electricals Ltd (BHEL), and Metallurgical & Engineering Consultants (MECON) – and two Odisha Government companies – Industrial Promotion & Investment Corporation of Odisha Limited (IPICOL) and Odisha Mining Corporation (OMC) are shareholders. In January 2020, the Centre gave in-principle approval for the strategic sale of NINL by allowing the six PSU shareholders to sell their stake in the steel company.
On the submission of the EoI, Mr. Narendran said, “We have done the due diligence. We are participating in the process. I think we have some time to put in our bids, etc. So, we will take a call, when we need to decide. We have submitted the EoI, not as Tata steel but as Tata Steel Long Products.”
The Cabinet Committee on Economic Affairs (CCEA) on 27 January, gave its in-principle approval for 100 percent disinvestment of the government stake in RINL. The disinvestment also extends to RINL’s stake in its subsidiaries/joint ventures through strategic disinvestment by way of privatisation. The decision has drawn a lot of opposition from the locals in Vizag as well as the workers at the steel plant.
RINL, under the Ministry of Steel, owns and operates a 7.3 million tonnes plant in Visakhapatnam, Andhra Pradesh. It holds the distinction of being India’s first shore-based integrated steel plant.
RINL has approximately 22,000 acres of land and enjoys access to Gangavaram Port, where raw materials such as coking coal, etc. arrive. RINL being on the eastern coast of India adds to its location advantage.
This acquisition will give Tata Steel the opportunity of catering to the domestic needs of steel through rail and road. Moreover, it will pave business access to the Southeast Asian markets where the company already has a presence.