"Railways to Acquire RINL's Debt-Ridden Forged Wheel Plant"

Officials involved in discussions have revealed that the Railways is poised to lead the acquisition of Rashtriya Ispat Nigam Ltd's (RINL) forged wheel unit located in Rae Bareli. This development comes as the Railways has agreed in principle to assume control of the unit and enhance its production capacities. Negotiations are currently underway regarding the terms of the transfer.

RINL, a CPSE under the Steel Ministry, has seen its forged wheel plant in Uttar Pradesh undergo investments exceeding Rs 2,250 crore. Despite having an installed capacity of 80,000 forged wheels annually and commencing operations in 2021, the plant has faced operational challenges leading to underutilization.

Internal discussions across ministries have highlighted the plant's inability to operate at full capacity due to various reasons, coupled with RINL's lack of expertise to ensure profitability. The Railways, however, envisions a phased approach to production, targeting 40,000 units initially and scaling up to 60,000 units in the second phase, with surplus stock earmarked for export

While the forged wheel unit's gradual divestment is expected to alleviate RINL's debt, which stood at Rs 20,400 crore in FY23, a potential takeover by the Railways aligns with the government's objectives to reduce import dependency and optimize domestic manufacturing capabilities. Discussions surrounding the acquisition proposal are expected to advance for Cabinet approval in the near future.

HBL