‘We now have reduce 7,000 crore of debt since April 2020,’ says Soma Mondal, Chairman, SAIL | Interview

The present monetary 12 months has been fairly difficult, says SAIL chairman Soma Mondal.

Metal Authority of India (SAIL) has largely overcome the Covid-19 disaster, posting a wholesome revenue within the third quarter. In her first-ever interview since she assumed cost as chairman on January 1 this 12 months, Soma Mondal speaks to Surya Sarathi Ray concerning the metal business’s prospects within the close to time period and the corporate’s plan to cut back its debt additional. Edited excerpts:

SAIL carried out effectively within the December quarter of the continued fiscal. What’s in retailer from you within the final quarter and the 2021-22 fiscal?

The beginning of the present monetary 12 months noticed us battling points on two fronts. Firstly there was the pandemic which posed a critical problem to the life and well-being of our staff. After which we confronted liquidity and profitability points whereas working operations at our crops at minimal ranges. The SAIL household, nonetheless, stood as much as these challenges and got here out with flying colors. The fruits of those efforts had been seen as early as June when the lockdown was lifted and the financial system revived. The metal sector echoed the emotions of the general financial system each by way of demand and provide. Actually, SAIL posted its best-ever sale efficiency month after month and was again within the black within the second quarter outcomes. With the markets regaining momentum in Q3, SAIL posted a web revenue of `1,283 crore. The outlook for the business is kind of good. There’s plenty of constructive sentiment. The uptick in exercise within the development, infrastructure and manufacturing sectors augurs effectively for the business basically and SAIL specifically.

What share of the metal market do you get pleasure from at current and the way do you see that rising within the close to future?

Out of the entire metal produced within the nation, round 60% comes from major producers and the remaining 40% is contributed by the secondary sector. The first sector has a number of metal gamers in addition to SAIL and these have progressively added capability, growing their market share through the years. Regardless of working in a extremely aggressive market for a very long time, SAIL has maintained its place among the many high metal corporations within the nation. The corporate has frequently advanced itself to reply to market necessities and expanded its product basket. SAIL will proceed to traverse that path to take care of its place sooner or later.

What will probably be your focus areas within the upcoming fiscal? Do you propose to embark on the programme to increase capability to 50 MTPA as was projected earlier?

The present monetary 12 months has been fairly difficult. Regardless of the advance in market situations in its latter half, the volumes will probably be decrease on a year-to-year foundation. So far as 2021-22 is anxious, we’ll concentrate on consolidating total volumes and growing the share of completed and value-added metal in our portfolio. That ought to assist us do higher in each bodily and monetary phrases. As for capability growth, the corporate has a long-term plan to boost capability to 50 MTPA, in line with the Nationwide Metal Coverage 2017. Whereas we will probably be transferring in that route progressively, we’re equally centered on reaching out to clients by stronger advertising and marketing initiatives. We had launched branded structurals known as NEX and branded TMT bars known as SAIL SeQR and these have gotten established as one of the best in school available in the market.

Coking coal, a important uncooked materials for the metal business, remains to be largely lacking from SAIL’s portfolio. Any plans to accumulate a mine abroad?

Most of our coking coal necessities are met by imports. SAIL has a three way partnership named Worldwide Coal Ventures (ICVL) with a couple of different PSUs, which goals to accumulate mining belongings overseas. ICVL has already acquired coal mines and belongings at Benga and Zambezia in Mozambique with met coal reserves (ROM) of greater than 700 MT. One other 6,000 MT of unexplored sources (ROM) are anticipated to be accessible at Tete. Whereas provides from these sources have commenced, the mining operations at these belongings will progressively be enhanced.

Is there any plan to accomplice with a overseas participant to provide auto-grade metal within the nation?

The know-how for making auto-grade metal is accessible with many metal corporations and SAIL is exploring totally different choices. Delegations of Indian metal PSUs led by the metal ministry have visited international locations like Japan and South Korea and deliberated with metal corporations there over growth and technological collaboration to fabricate high-grade metal, together with auto-body sheets, in India.

How do you propose to deleverage your stability sheet? What’s the debt stage now and to what extent will you pare it by the tip of 2021-22?

We borrow as per our enterprise necessities. And we transfer to chop debt relying on the corporate’s place and the enterprise situation. Aside from increased money collections attributable to elevated metal gross sales, the corporate is augmenting money flows by auctions of iron ore and fines. As a part of deleveraging, we now have additionally adopted a mixture of different measures together with debtors’ administration, monetising of idle belongings and sale of by-products. On the finish of the third quarter of the present monetary 12 months, SAIL’s debt stood at round `46,610 crore (IND AS), which is a discount of just about `7,000 crore from its peak stage of round `52,000 crore in April 2020. The corporate plans to convey it down additional within the present quarter and the following monetary 12 months.

It appears patrons usually are not curious about your three particular metal crops. Is there a plan B in place?

The federal government had earlier accredited the ‘in-principle’ strategic disinvestment of the three particular metal crops. The method is dealt with by the Division of Funding and Public Asset Administration (DIPAM). As per the principles for disinvestment, we’re not aware of its particulars.

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