India: SAIL Eyes NINL Acquisition to Boost Steel Expansion

In line with SAIL's massive expansion plan and roadmap to enhance its present capacity from 21.42 MnT to 50 MnT by 2031 in two phases, company has recently planned to set up a second steel plant of 3 MnT capacity in the state of Odisha, SteelMint learned from sources.
In this context, SAIL plans on acquisition of existing running PSU steel plant in Odisha i.e. NINL will give a big boost to its expansion effort.

Neelachal Ispat Nigam Limited (NINL), Odisha, is a joint venture company of MMTC ltd. and Government of Odisha through IPICOL and OMC Ltd. This is a 1.1 MnT integrated Steel Plant. In the past, SAIL had tried to take over NINL several times in 2007, 2010 and 2014; but for various reason it could not materialize. In May 2007 with approval of committee of secretaries, SAIL wanted to take back NINL (which was originally founded by SAIL in 1982) by paying around 1000 crores to promoters. Now that MMTC Ltd, main promoter decided to quit NINL, it will be prudent to revive the earlier proposal, to merge NINL with steel behemoth SAIL.

NINL has a 1.1 MnT operating plant with all auxiliary units, with undisputed land of more than 2500 acres, which is sufficient for expansion upto 5 MnT PA. Also it has a state of art Coke oven battery with dry quenching facility and an already commissioned Steel Melting Shop (SMS) with 110 ton converter, 6 strand billet caster, Argon Rinsing Station and with all other allied units. The biggest strength of NINL is its captive mine of 874.29 hectares, 110 MnT of estimated reserve, having an average iron content of 65%.

Last week SteelMint reported that NINL has gone for a shutdown of its blast furnace at its Duburi plant in Odisha's Kalinganagar industrial complex. Besides MMTC, the other key promoters- OMC and Ipicol have also withdrawn financial support.

In the recent update received on it, acquiring NINL by SAIL will be a 'win win' deal, both for SAIL and NINL. In a request made by Steel Executives Federation of India (SEFI), the transfer of shares by MMTC and other PSUs to SAIL, will just be a transfer from one government to another government entity only. In view of the above, SEFI has earnestly suggested Honorable Prime Minister of India may give direction to concerned official to complete the SAIL and NINL merger at the earliest.