It was almost after six years that SAIL came out with the offer to propel its employees to opt for VRS. The VRS scheme launched by the PSU in 2001-02 continued till 2008-09. When the scheme was launched, SAIL had a strength of more than 160,000 employees and the manpower cost accounted to...
nearly 16 per cent of the company’s gross sales — the highest among the steel makers.
Post VRS and natural separation of employees, its manpower has been reduced to 88,655, of which 13,968 are executives and the remaining 74,687 being non-executives.
According to officials, the VRS would be applicable for those employees who have worked for at least 15 years and whose minimum age is 50 years.
The compensation will consist of the salary of 45 days for every completed year of service or the salary an employee would draw at the prevailing level for the number of months’ of service left, whichever is less, says the PSU’s VRS document.
SAIL has been incurring losses during the first three quarters of the last financial year, whereas the result of the fourth quarter of FY16 is awaited. Even the profit has reduced in the last couple of years. The PSU registered a net profit of Rs 2,093 crore in 2014-15 compared to Rs 2,616 crore in the previous financial year.
SAIL is India's largest steel producing company. With a turnover of Rs. 50,627 crore in the year 2014-15, the Maharatna PSU has five integrated steel plants, three special plants, and one subsidiary in different parts of the country.
After PK Singh assumed charged as the chairman of SAIL, the goals of the PSU were modified. The Maharatna PSU is targeting steel production at 17 million tonnes for FY17 and 20 million tonnes for FY18. The PSU also plans to target 70 percent sales in the northern and eastern regions and increase its presence in the Make in India sectors like defence, aerospace and nuclear power. Apart from this, the company intends to sell idle assets, and reduce inventories of steel.
Earlier, credit rating agency, Fitch had downgraded SAIL's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB'. Fitch expects SAIL’s financial profile to remain weak for the next 18 months and improve only moderately towards the end of the financial year ending March 21, 2018. The negative outlook reflects the risk of further weakening in steel prices, increase in Indian steel imports and weaker-than-expected steel demand over the next 12-18 months. This would make it difficult for SAIL to improve its profitability and thus its leverage.