The Indian Steel Ministry has directed the Steel Authority of India (Sail) to perform a strategic evaluation of its assets and divest from its non-core ones.

 

According to media reports, the ministry has asked Sail to focus on mining and steel production and has asked it to identify idle assets, divest from its investments in joint ventures (JVs), and sell its steel processing units (SPUs).

 

In 2019, Sail had four subsidiaries, one associate company, and over 24 JVs in power generation, e-commerce, cement, rail wagon manufacturing, and coking coal imports, reports indicated. 

 

The company’s gross debt in Q1 2020 ended June 30, 2020 was Rs544bn ($7.4bn). A month ago, on August 20, the ministry held a meeting on the monetization of the company’s assets. 

 

Sail’s JVs reported a loss of Rs1.94bn last fiscal against a loss of Rs2.23bn the prior year. The company’s JVs include a 10MW hydro-plant at Mandira Dam, International Coal Ventures (ICVL), and an 800MW NTPC-SAIL power plant. 

 

In FY2020, three units, namely Visvesvaraya Iron and Steel Plant (VISP), Salem Steel Plant (SSP), and Alloy Steel Plant (ASP) weighed down Sail’s profits with Rs3.65bn in losses among the three. Expression of interest (EoI) notices have been issued now for the three companies. 

 

Sail owns three SPUs which convert semi-finished steel to finished steel products. Previously, Sail sought to issue notices seeking interest for assets but those received did not meet eligibility criteria. Processes and requirements have now been revised along with a more systematic promotion of the companies to attract a wider pool of buyers. 

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