Steel Authority of India Limited: history, ownership, mission, how it works & makes money

A Brief History of Steel Authority of India Limited

Steel Authority of India Limited (SAIL) is one of India’s largest state-owned steel manufacturing companies, established in 1973. It was formed to augment the country's steel production and enhance self-sufficiency in iron and steel.

SAIL’s first integrated steel plant commenced operations in 1982 at Bhilai. Shortly after, the plants at Rourkela, Durgapur, and Bokaro followed, contributing significantly to India's infrastructure and industrial sector. By 1991, SAIL had become a fully integrated steel producer.

In 2019-20, SAIL produced around 15.5 million tonnes of hot metal, 14.25 million tonnes of crude steel, and 12.52 million tonnes of saleable steel.

As of March 2023, SAIL commanded a market capitalisation of approximately ₹57,000 crore (about $7.7 billion), with a 52-week high of ₹131.50 and a low of ₹85.00.

SAIL's financial performance reflects its strategic initiatives and investments. In the 2021-22 financial year, the company reported a total income of ₹1,06,572 crore with a net profit of ₹13,157 crore, showcasing robust recovery post-pandemic.

The company has also focused on modernizing and expanding its facilities to boost productivity. In a major move, SAIL approved a capital expenditure plan of ₹1,000 crore for the development of new projects and technology upgrades in 2022.

In terms of environmental sustainability, SAIL has committed to reducing its carbon footprint, with plans in place to generate approximately 1,100 MW of renewable energy by 2030.

SAIL operates several plants across India, including:

• Bhilai Steel Plant
• Rourkela Steel Plant
• Durgapur Steel Plant
• Bokaro Steel Plant
• Salem Steel Plant
• Asansol

SAIL's stock is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) of India, under the ticker symbol SAIL, and remains a key player in India's steel industry.

A Who Owns Steel Authority of India Limited

Steel Authority of India Limited (SAIL) is one of the largest state-owned steel manufacturing companies in India. The ownership structure of SAIL is primarily dominated by the Government of India. As of the latest available data, the Government of India holds a significant stake in the company.

As per the financial data released for the fiscal year ended March 2023, SAIL reported a revenue of approximately ₹1,17,268 crores (around $14.3 billion), demonstrating a recovery trajectory post-pandemic. Its net profit for the same period stood at ₹4,550 crores (about $550 million).

The composition of the board of directors and stakeholders reflects the typical public enterprise structure in India. The Government's significant ownership ensures that strategic decisions align with national interests, particularly in areas concerning infrastructure development and employment generation.

In terms of market performance, SAIL's shares are traded on the National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE). As of October 2023, SAIL's market capitalization was approximately ₹59,000 crores (about $7.1 billion), showcasing its status among the leading steel producers in Asia.

SAIL's initiatives for modernization and capacity expansion are critical for enhancing its competitiveness in the domestic and global markets. The company aims to increase its crude steel production capacity from the existing 21 million tonnes per annum (MTPA) to 50 MTPA by 2030, backed by both public investments and potential foreign partnerships.

The current dividend yield for SAIL stands at approximately 2.7%, indicating a reasonable return for investors amidst fluctuating market conditions. The company has maintained a consistent dividend policy, reflecting its commitment to shareholder value.

With India's growing demand for steel, driven by infrastructure projects and urbanization trends, SAIL's ownership structure will continue to play a pivotal role in its strategic direction and operational efficiencies. The government’s focus on increasing domestic production to reduce imports further solidifies SAIL's importance in the national framework.

Steel Authority of India Limited Mission Statement

Steel Authority of India Limited (SAIL) is one of the largest steel manufacturing companies in India, primarily catering to the infrastructure and construction sectors. The mission statement encapsulates SAIL's commitment to quality, customer satisfaction, and sustainable practices.

SAIL aims to achieve leadership in the steel industry by adopting best practices in production, establishing high standards in product quality, and enhancing customer relationships. The company focuses on innovation and sustainability to meet the growing demand for steel while minimizing environmental impact.

Key Components of SAIL’s Mission Statement

• Quality Production: Ensuring high-quality steel products that meet international standards.
• Customer Orientation: Delivering value-added services and products to strengthen customer satisfaction.
• Sustainability: Committing to eco-friendly practices, reducing carbon footprint, and promoting the use of renewable resources.
• Innovation: Investing in research and development to advance steel production technologies.
• Employee Welfare: Fostering a safe and thriving workplace for employees.

Financial Performance Overview

In the fiscal year 2022-23, SAIL recorded a total income of ₹1,07,892 crores, reflecting a revenue growth trajectory. The net profit soared to ₹10,428 crores, up from ₹7,880 crores in 2021-22, indicating a growth rate of approximately 32%.

The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) stood at ₹20,848 crores, translating into an EBITDA margin of around 19.3%.

Market Position and Strategy

SAIL holds a significant position in the Indian steel market, contributing approximately 17% of the total steel production in India. As of Q2 2023, the company’s production capacity reached 21 million tons per annum.

The strategic initiatives include expanding market reach through efficient supply chain management and improving operational efficiencies. SAIL is actively engaged in modernizing its plants with a capital expenditure budget of around ₹15,000 crores over the next five years to enhance productivity.

Sustainability Goals

SAIL has committed to reduce its specific energy consumption by 1% year-on-year and aims to cut greenhouse gas emissions by 30% by 2030. The company is also investing in renewable energy projects, targeting a capacity of 100 MW by the end of 2025.

The integration of sustainable practices aligns with their mission to foster a greener future while catering to the increasing demand for steel. This commitment aids in reinforcing their brand equity among environmentally conscious consumers and investors.

How Steel Authority of India Limited Works

Steel Authority of India Limited (SAIL) is one of the largest state-owned steel producers in India. The company operates through various plants and units across the country, focusing on the production of steel and related products. As of March 2023, SAIL has a crude steel production capacity of approximately 21 million tonnes per annum (MTPA).

SAIL's operational framework includes several integrated steel plants. Key plants include:

• Bhilai Steel Plant
• Burnpur Steel Plant
• Durgapur Steel Plant
• Rourkela Steel Plant
• Bokaro Steel Plant

SAIL's production process involves the following stages:

• Iron Making
• Steel Making
• Rolling & Finishing

In the financial year 2022-2023, SAIL reported consolidated revenue of approximately ₹1,12,684 crore (about $13.7 billion), reflecting a year-on-year increase of 13%.

The company’s EBITDA for the same period stood at around ₹23,000 crore (approximately $2.8 billion), yielding an EBITDA margin of 20.4%.

SAIL exports its products to numerous countries, with an export volume reaching around 1.5 million tonnes in FY2022-2023. Major markets include the Middle East, Southeast Asia, and Africa.

The following table outlines SAIL's production and sales data for FY2022-2023:

SAIL maintains a diverse product portfolio, including:

• Hot Rolled (HR) Coils
• Cold Rolled (CR) Coils
• Galvanized Sheets
• Structural Steel
• Railway Products

As part of its sustainability initiatives, SAIL has implemented various measures to reduce carbon emissions and improve energy efficiency. The company aims to achieve a reduction in carbon footprint by 33% by 2030.

SAIL's strategic focus includes modernizing existing infrastructure and expanding its capacity. The company has plans to invest about ₹20,000 crore (approximately $2.4 billion) in capital projects over the next few years, targeting enhancements in production capabilities and technology upgrades.

The steel industry's outlook remains positive, driven by demand in sectors such as construction, automotive, and infrastructure. SAIL's positioning as a key player in the Indian steel market, coupled with government initiatives, positions the company favorably for future growth.

How Steel Authority of India Limited Makes Money

Steel Authority of India Limited (SAIL) is one of the largest steel producers in India, engaged primarily in the manufacture and sale of iron and steel products. The company generates revenue through various streams, primarily from the production of finished steel, sale of products and by-products, and trade activities.

Revenue Streams

• Sale of Finished Steel Products
• Sale of By-products
• Trading Operations
• Joint Ventures and Subsidiaries
• Export Sales

Key Financial Metrics

For the fiscal year 2022-2023, SAIL reported the following financial metrics:

Sale of Finished Steel Products

SAIL's core business is the manufacturing and sale of a wide range of steel products, including:

• Hot Rolled (HR) Sheets and Plates
• Cold Rolled (CR) Sheets
• Long Products (such as bars and rods)
• Speciality Steel

In FY 2022-2023, SAIL produced approximately 16.15 million tonnes of finished steel.

Sale of By-products

By-products from steel manufacturing, such as slag, gas, and coke, contribute to revenue. For instance, SAIL reported a by-product revenue of about INR 1,200 crores in the same fiscal year.

Trading Operations

SAIL engages in trading steel products to optimize revenue. In FY 2022-2023, trading operations yielded approximately INR 7,000 crores of revenue.

Joint Ventures and Subsidiaries

SAIL has joint ventures in which it holds significant stakes, allowing additional revenue flow. For example, its joint venture with Hindustan Zinc Ltd. contributed around INR 400 crores in net earnings.

Export Sales

SAIL has also been focusing on international markets, exporting products primarily to Southeast Asia, Europe, and the Middle East. In FY 2022-2023, exports accounted for approximately INR 3,500 crores of total revenue.

Market Position and Trends

SAIL holds a significant market position, being responsible for around 15% of India’s total steel production. The evolving trends in green steel and sustainable manufacturing are influencing SAIL's operational strategies, aiming for lower carbon emissions and enhanced efficiency.

Future Outlook

SAIL aims to enhance its production capacity to 26 million tonnes per annum by 2030, focusing on modernizing its plants and expanding its product portfolio to meet growing domestic and international demands.