Adani Group to foray into steel sector, eyes RINL bidding in January 2023
Adani Group is reportedly planning to bid for the state-owned Rashtriya Ispat Nigam which is expected to go under the hammer in January 2023. With this, the group would foray into a new business after making entering the cement sector with the Adani-Holcim deal, according to BusinessLine (BL).
The report quoted sources as saying that the group is expected to take a more aggressive stance than legacy players in the steel sector like JSW Steel, and Tata Steel.
This is also expected given the premium pricing the biggest conglomerate in India offered, to buy Ambuja Cement and ACC. With the $10 billion deal, the group has become the second-biggest player in the cement industry, second only to Ultratech Cement.
In January, the Adani Group and South Korea's Posco signed a $5 billion deal to start a steel mill in Mundra, Gujarat with a focus on green energy.
RINL was cleared for a 100 per cent disinvestment by the Centre in January. The company has been incuring losses since 2014-15, but it has land worth Rs 1.5 trillion, BL stated. The company employs 6,500 officers, 12,000 regular workers, and 20,000 contract workers.
RINL has a production capacity of 7.3 million tons per annum.
In FY21, RINL posted a loss of Rs 789 crore. In FY20, the losses were recorded at Rs 3,91 crore. RINL is also known as Visakhapatnam Steel Plant.
The BL report further said that legacy steel players have majorly expanded their business by acquiring other steel companies in the insolvency proceedings.