Critically analyse the strategy of reviving loss-making CPSEs through equity infusion together with monetisation of non-core assets, citing the case of RINL.

The government is reviving distressed CPSEs on two tracks at once. It injects equity to restore solvency and sells surplus land to unlock idle value. RINL, which runs the Visakhapatnam Steel Plant, shows this model in action. Its case also shows that land sales can support a turnaround but cannot replace one.

The twin-track strategy in RINL

• Equity infusion: RINL defaulted on capex loans and interest in June 2024. The CCEA then approved a ₹11,440 crore revival: ₹10,300 crore of equity, plus ₹1,140 crore of working-capital loan converted into 7% preference shares [2].
• Asset monetisation: NLMC is a wholly owned GoI company approved in 2022 [3]. It is auctioning 459 surplus RINL parcels in HB Colony and Auto Nagar [5]. Phase 1 sold 150 plots for ₹366.33 crore, 17.23% above the reserve price [1].

Strengths

• Revival without privatisation: the equity keeps the plant running, and selling land does not dilute ownership of the operating business [2].
• Idle land put to use: non-core land earned nothing, and the top bid crossed ₹1.80 lakh per sq yd [1].
• Transparency: this is NLMC's first end-to-end e-auction, run on RailTel's E-Nivida, which reduces official discretion [1].
• Specialised institution: NLMC handles real-estate sales so that RINL and the line ministry do not have to [3].

Limitations

• Scale mismatch: Phase 1 proceeds are only about 3% of the package and about 8% of RINL's –₹4,538 crore net worth [1][2].
• One-time receipt: land can be sold only once, while the steel business keeps losing money every year.
• 'Family silver' critique: NMP leases core assets and leaves out non-core assets [4]. NLMC sells land outright, so the asset never returns to the government.
• Valuation opacity: the release does not say how the reserve price was set [1]. The CAG has asked for valuation assumptions in disinvestment to be clearly documented [6].
• Political sensitivity: the plant holds a "special place" for Andhra Pradesh [7], so land sales fuel fears of creeping privatisation.

Way forward

• Ring-fence the proceeds for debt repayment and blast-furnace capex.
• Publish how the reserve price is set and clear land titles before Phase 2.
• Link further equity to milestones, such as capacity utilisation targets.

Overall, equity buys time and land sales provide cash, but only operational efficiency can keep RINL viable. The strategy is sound only if both tracks are tied to a clear performance plan. That would make revival an investment in resilient industry (SDG 9) rather than a recurring bailout.