SAIL Eyes ₹36,000 Cr IISCO Expansion by FY27, Faces Tender and Debt Challenges

Steel Authority of India Ltd (SAIL) is pursuing the ambitious expansion of its IISCO Steel Plant at an estimated cost of ₹36,000 crore to raise capacity by 4.5 million tonnes per annum (mtpa) from the next fiscal. However, delays in finalising its tenders and getting financial closure are hampering the PSU major and might push actual order placements to late FY26.

Board approvals are in place, but financial closure is expected only by end-Q3 or early Q4 of FY26, i.e., between December 2025 and March 2026. Capex outlay will see a sharp jump only next year, once key packages are finalised.

For FY26, SAIL has raised its capital expenditure target to ₹7,500 crore—a 25% increase over last year’s ₹5,700–₹6,000 crore. In Q1FY26 alone, it has already spent ₹1,642 crore, exceeding internal targets. “We expect a good jump in capex next year, but actual numbers depend on finalising packages,” said Ashok Panda, Director (Finance), during an investor call.

The IISCO upgrade is part of a broader ₹1 lakh crore investment plan to add 15 mtpa across all SAIL units by FY30. Of this, 4 mtpa will come from new capacity and 0.5 mtpa via de-bottlenecking at IISCO.

SAIL continues efforts to lower its high debt. At the close of Q1FY26, borrowings amounted to ₹28,741 crore, a decrease of 4% from ₹29,811 crore at the end of FY25. The debt-to-equity ratio showed a slight improvement at 0.51, as compared to 0.54 earlier.

Steel prices remain a concern. In July, long products were priced at ₹51,500/tonne and flat products at ₹48,600/tonne. With net sales realisation (NSR) expected to dip below Q1’s ₹51,700/tonne in Q2, earnings pressure could persist.

Despite pricing challenges, SAIL is eyeing full-year sales of 18.5 mt (excluding NMDC volumes), banking on strong domestic demand, which is growing at over 8%. Panda noted that steel imports remained under control, and price stability may support recovery in the coming quarters.