Steel Industry was under pressure in the year 2012 owing to low demand from the market. According to Mr. C. S. Verma, Chairman, Steel Authority of India Limited (SAIL), in the year 2013, there has been a gradual improvement in the condition of the Indian steel industry. In the global market, steel production has gone up by 2.1% in 2013 which saw an increase of 1.2% in 2012, as per the data. Even in the domestic market, there is an increase in production by more than 3% as shown in the data to record some improvement of the steel industry. In the 12th five year plan government will invest around USD 1Trillion on various sectors of infrastructure, which will thus boost up the growth of steel industry.
Depreciating value of rupee against dollar is another factor for the low demand for steel in the market. SAIL is currently indebted with Rs 22,000 crore out of which around Rs 13,000-14,000 crore is their Forex loan.
Regarding the current debt in the books of SAIL, Mr. Verma said, “We are having a deposit level of about Rs 4,000 crore cash in bank, deposited in our various accounts. Our borrowing today is about Rs 21,000 crore. Our debt equity ratio is 0.56:1. Our net worth is about Rs 42,000 crore. Our borrowing capacity on conservative debt equity ratio of about 2:1 is Rs 82,000 crore, against which our debt as on date is about Rs 21,000 crore.”
SAIL’s current production capacity of 14 MnT is likely to reach up to 19 MnT by the end of FY14. They are building up two new blast furnaces to achieve this target; in fact one of the blast furnaces is going to get commissioned in their Rourkela steel plant within next ten days. The second one will be commissioned by the end of December 2013 in their Indian Iron & Steel Company (IISCO), Burnpur steel plant. Both the blast furnaces will be of similar capacity of 4,060 cubic meters.