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The National Company Law Tribunal’s (NCLT) order to hand over SAIL-SCL Kerala Limited (SSKL) at Cheruvannur in Kozhikode district in Kerala to Chhattisgarh Outsourcing Services Private Limited (COSPL), as part of insolvency proceedings, has triggered protests from the Kerala government as well as employees of the company. A blame game is now on over the public sector undertaking (PSU) being allegedly run down and finally sold. The SSKL, the only mini-steel plant in Kerala, was founded in 1969 as a joint venture of the Kerala State Industrial Development Corporation and a private entrepreneur. The company mainly manufactured TMT steel bars used for construction and with a production capacity of 55,000 tons per annum and it had made substantial profits in the mid-1980s. However, it faced turbulent times later and in an attempt to save it, the Kerala government entered into a partnership with the Steel Authority of India Limited (SAIL) in 2010.

The contentious takeover of SAIL-Steel Complex Limited in Kerala

Shares of Steel Authority of India Limited (SAIL) rose by up to 3% on July 5 following reports of a proposed mega public sector undertaking merger. The shares closed the day at ₹155.37 which is a 2.86% gain than the previous close. The stock has gained a total of 76% in the last one year, and 24% since the beginning of the year. The Steel Executives Federation of India (SEFI) has urged the steel ministry to merge state-run Rashtriya Ispat Nigam Limited (RINL), Ferro Scrap Nigam Limited (FSNL), and Nagarnar steel plant with SAIL, according to a report by Economic Times. SEFI highlighted the potential benefits of the merger, such as achieving capacity expansion targets and addressing resource challenges faced by the individual firms, while questioning the wisdom of FSNL’s disinvestment.

SAIL shares surge on mega merger proposal with State-Run steel firms

Being an integrated player with captive mines, the company had substantial inventories, aided by a better demand scenario.

The GoI has announced the imposition of export duty on iron ore, pellets, and a few steel and steel intermediaries on May 20, 2022. SAIL’s major revenues are from the domestic markets, the imposition of duty will lead to a higher supply in the domestic market, which might impact the domestic prices as well.

The steel industry is sensitive to the shifting business cycles, including changes in the general economy, interest rates, and seasonal changes in the demand and supply conditions in the market.

The issuer has made timely interest payments.

Mr. Amarendu Prakash, Chairman

The company enjoys ‘Maharatna’ status, which imparts greater autonomy to central public sector enterprises in their investment and capex decisions. The company also enjoys substantial financial flexibility due to government ownership and it has demonstrated the ability to raise funds at competitive rates. 

The company has a strong central marketing organisation, which is responsible for marketing of the company’s steel products, including carbon and alloy steel. The company’s CMO consists of a network of four regional offices, 37 branch sales offices, 10 customer contact offices, and 43 operational warehouses across India, equipped with mechanized material handling systems.

SAIL owns and operates 5 integrated steel plants, viz, Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant, Bokaro Steel Plant and IISCO Steel Plant. The company also has 3 special steel plants, ie, Alloy Steel Plant, Salem Steel Plant, and Visvesvaraya Iron & Steel Plant.

9.00%Steel Authority Of India Limited 14 Oct 2024

ISIN:

INE114A07869

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Steel Authority Of India Limited

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The contentious takeover of SAIL-Steel Complex Limited in Kerala

SAIL shares surge on mega merger proposal with State-Run steel firms

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