Cabinet approves Rs 10,000 crore for Visakhapatnam Steel Plant’s revival: PM Modi

New Delhi: “During yesterday’s Cabinet meeting, it was decided to provide equity support of over Rs 10,000 crore for the Visakhapatnam Steel Plant,” Prime Minister Narendra Modi said in a post on X on Friday.

PM Modi also said that the Visakhapatnam Steel Plant has a special place in the hearts and minds of the people of Andhra Pradesh.

A full text of the tweet said: “The Visakhapatnam Steel Plant has a special place in the hearts and minds of the people of Andhra Pradesh. During yesterday’s Cabinet meeting, it was decided to provide equity support of over Rs 10,000 crore for the plant. This has been done by understanding the importance of the steel sector in building an Aatmanirbhar Bharat.”

The infusion includes Rs 10,300 crore as equity capital into RINL and conversion of Rs 1,140 crore working capital loan as 7 per cent non-cumulative preference share capital redeemable after 10 years to keep RINL as a going concern, the official statement said.

With this revival package, many of the legacy problems that RINL used to face will be resolved, Information and Broadcasting Minister Ashwini Vaishnaw said.

The equity infusion of Rs 10,300 crore into RINL will help it overcome the operational problems related to raising working capital and start blast furnace operations in the most productive way, the statement said.

The revival package would allow the company to gradually reach its full production capacity, which is critical and is in the national interest to have stability in the Indian steel market by augmenting steel production and also save the livelihoods of employees (regular and contractual) and those dependent on the operations of the steel plant.

The revival plan envisages that RINL will start full production with two blast furnaces in January 2025 and with three blast furnaces by August 2025.

Under the Ministry of Steel, RINL operates the Visakhapatnam Steel Plant (VSP), the only offshore steel plant in Andhra Pradesh. It has an installed capacity of 7.3 Mtpa of liquid steel.

As per the statement, the financial condition of RINL is critical. RINL has exhausted the sanctioned borrowing limits from banks for working capital and was not in a position to get further loans from banks.

RINL also defaulted on the capex loan repayments and interest payments in June 2024.

CM Naidu thanks PM Modi for financial support to Vizag Steel Plant

Chief Minister N Chandrababu Naidu on Friday thanked prime minister Narendra Modi after the Union Government approved financial support of Rs 11,440 crore to revive the Vizag Steel Plant.

The chief minister also expressed gratitude to finance minister Nirmala Sitharaman and Steel minister HD Kumaraswamy for their ‘constant support’ and positive response.

“I extend my heartfelt gratitude to Prime Minister Narendra Modi for his unwavering support to the steel plant, which I assure will contribute to the PM’s vision of nation-building as part of Viksit Bharat–Viksit Andhra (developed India and Andhra Pradesh),” CM Naidu said in a post on X.

It is an emotional and proud moment for the people of Andhra Pradesh as the Union Government, responding to the State’s consistent efforts since the formation of the NDA government, has approved financial support, he said.

According to the CM, January 17 (Friday) marks a historic moment ‘etched in steel’ for Andhra Pradesh. He added that the VSP, or Rashtriya Ispat Nigam Ltd (RINL), is more than just a factory—it stands as a monument to the struggles and spirit of the people of the state.

“This was not merely an election promise; it was a deeply personal commitment we were determined to honour. Good days are ahead for Andhra Pradesh,” Naidu added.

About Visakhapatnam Steel Plant

Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), is a Navratna Company under the Ministry of Steel. VSP is the first shore-based Integrated Steel Plant in India. It is also a producer of long steel products and caters to the requirements of the construction, infrastructure, manufacturing and automobile sectors.