As green shoots emerge in steel sector, banks hope to recover their money

15 May 2017

Rising domestic demand, supportive government policies and a stable macro environment have raised hopes of a revival in the steel sector, which has been plagued by high nonperforming assets (NPAs) over the past five years.

India’s steel output rose 11 per cent to 101.3 million metric tonnes in FY17, making it a net exporter of the metal for the first time in three years. India is likely to overtake Japan to become the second largest producer of steel by 2017¬end, according to the Indian Steel Association. Demand has picked up aided by the government’s push to build infrastructure.

Analysts said the upswing in the sector will help banks recover NPAs or liquidate assets faster.

“Till last year, there was no light at the end of the tunnel, now there is some hope,” said Purvesh Shelatkar, senior vice president (institutional sales), Centrum Broking. “Our estimates are that steel sector NPAs are at Rs. 1.25 lakh crore. There is now a chance that at least a part of the loans would be recovered.”

Source: Economic Times