Rashtriya Ispat Nigam Ltd (RINL), the country’s second largest PSU steel maker, has reported a net loss of around Rs 3,049 crore in FY23, as per documents filed with the Ministry of Steel. Projections for FY24 targets reduced losses at Rs 155 crore.

During the four quarters of FY23, RINL’s losses were at around Rs 201 crore, Rs 1,494 crore, Rs 1,057 crore and Rs 298 crore, respectively.

Also read: No freeze on RINL’s divestment process: Steel Ministry

RINL had a net profit of Rs 913 crore in FY22 and a loss of over Rs 1,000 crore in FY21.

Turnover last fiscal was Rs 24,050 crore, down 15 per cent year-on-year. Turnover in FY22 was Rs 28,215 crore. The targeted turnover for FY24 is Rs 31,264 crore.

RINL’s existing facilities include a steel plant with 7.3 million tonnes per annum (mtpa) capacity, and a forged wheel unit in Uttar Pradesh with annual installed capacity of 100,000 units.

Production targets

In FY23, crude steel production was 4.2 mt and saleable steel was 4 mt, which the company intends to ramp up to 5.25 mt and 5.04 mt, respectively, in FY24.

Also read:Go-ahead for sale of RINL’s forged wheel unit

If the steel maker is able to commission its air separation plant, as per a ministry presentation, then the revised output is pegged at 5.9 mt crude steel and 5.6 mt saleable steel. Air separation aids crude steel production.

RINL is not listed on the bourses and its numbers are reported directly to the Steel Ministry.


According to documents accessed by businessline, total borrowings was Rs 24,558 crore for FY23, which included working capital loans of Rs 15,034 crore and capex borrowings of Rs 9,524 crore.

Total borrowings plus liabilities for the steel maker in FY23 was Rs 36,331 crore.

The FY24 projection for state borrowing is around Rs 24,496 crore, and liabilities of around Rs 13,997 crore.

“At present, RINL’s debt is unsustainable and is likely to result in default/ negative net worth,” a ministry note says.

Erosion in net worth

Incidentally, apart from the debt and liability position, the concern raised across internal notes of the ministry has been the eroding net worth of the company.

Net worth of RINL dropped to Rs 199 crore in FY23, from Rs 3,175 crore in FY22. In fact, the steel maker had seen an improvement in net worth from Rs 2,241 crore in FY21.

Also read: RINL eyes land monetisation to tide over capital crisis

Quarter-wise break-up shows that net worth fell to Rs 2,979 crore in Q1FY23 (April to June), further slipped to Rs 1,490 for the quarter ending September 30, 2022 (Q2FY23) and Rs 479 crore in Q3FY23 (October to December), and was at Rs 199 at the end of the fiscal.

Net worth is calculated as the current value of assets owned by the company adjusted against its debt and liabilities. Reduction means an increasing debt burden and can affect the credit worthiness or borrowing ability of a company.

“Banks may not roll over/ renew the working capital loans if the net worth is negative,” a ministerial note reads, adding that as per financial norms, debt/ EBITDA of 4-4.5x or lower is considered sustainable. But in the case of RINL the EBITDA for FY23 was negative while in FY24 it is targeting a debt/ EBITDA ratio of 8.7x, which is on the higher side.