Today, Indian steel industry is on crossroads. A lot of opportunities are emerging and at the same time, it is surrounded by numerous problems.
Last few quarters have seen a steady increase in steel demand, thanks to mega infra projects being implemented by the central as well as many state governments. A sustained increase in steel demand can transform the industry sentiment and encourages steel business houses to plan for the future, think of capacity expansion and so on. It also improves the bottomline and influences the price curve in a positive way. Presently, most of the commodities in the iron & steel process chain have somewhat regained the comfort in pricing which can ensure smooth running of the enterprise and expect some growth in the future. The customer industries like infrastructure, automobile are putting up impressive growth figures and this will surely translate into higher steel demand in coming months. Recently presented union budget for the fiscal 2018-19, apart from its provisions for the farming sector, emphasizes on infrastructure development in the form of railways, airports, sea ports, metro projects etc. which certainly promises bright future for steel industry. It also estimates that Indian economy will grow by 7.2 to 7.5 % in this fiscal. I am sure if the economy really grows with this rate, all the industries including ours will tremendously gain. It can attract huge capital not only from India but from every corner of the world.
Many big steel companies have heavy debt burden and unfortunately are not in the position to exploit the full advantage of the present industry situation. In fact this financial situation has initiated restructuring process in the industry and few private steel plant promoters face a threat of being out of job. We all know that this is a very complicated process involving plant and financial valuation, brand value estimation and so many other parameters. My point here is that the enterprise is loosing a great opportunity of recovering its financial position. Can the government and our ministry do something about it?
To say so, the future seems bright but the journey is corrugated. Let’s see how the things unfold !