SAIL Shares Up on Steel Union's Proposal to Merge Three Firms with PSU Major

Shares of Steel Authority of India Limited (SAIL) rose by as much as 3% on July 5 following reports of a steel union proposing the creation of a mega public sector undertaking by merging the company with three others.

At 11:30 AM IST, shares of SAIL were trading 3.11% higher at ₹155.65 apiece on the BSE. The stock has gained 33.09% over the last six months. 

According to a report by Economic Times, 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, 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. 

Brokerage analyst Centrum Broking views the news report as a "big positive" for SAIL, suggesting that the merger will facilitate fast-tracked expansion with minimal capital expenditure, drive future earnings growth, and lead to value unlocking. 

According to Centrum Broking, if the merger proposition goes through, SAIL's EBITDA (earnings before interest, taxes, depreciation, and amortization) is expected to increase by 55%, rising from ₹13,000 crore to ₹20,000 crore. Additionally, the company's capacity would increase by 50%. The merger would enable SAIL to avoid massive capital expenditure of ₹1 lakh crore for organic expansion, instead managing with minimal capex requirements.

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 the Nagarnar steel plant with the Steel Authority of India Limited (SAIL). This merger aims to combine the expertise of each firm to create a mega public sector undertaking.