TATA STEEL

GROUP-A1
•Vinod Vyas
•Akhil Anam
•Jaffar Khan
•Kavita Shah
•Shweta Shinde
JAMSHEDJI TATA
 INTRODUCTION
• Established in 1907

• World’s 5th largest company.

• World`s second most geographically

diversified steel producer.

• Tata Steel has a balanced global presence.

 VISION AND
OBJECTIVE
• Our people, by fostering team work, nurturing talent,
enhancing leadership capability and acting with pace,
pride and passion.
• Our offer, by becoming the supplier of choice,
delivering premium products and services, and
creating value with our customers.
• Our innovative approach, by developing leading
edge solutions in technology, processes and products.
• Our conduct, by providing a safe working place,
respecting the environment, caring for our
communities and demonstrating high ethical
standards.
 INDIA HAS A POTENTIAL FOR
EXPONENTIAL GROWTH IN STEEL
CONSUMPTION
Peak Point
Point of
Saturation
Singapore Japa
n
EU
USA
Point of
Japan
Inflection
EU 15
a
-06
in
Ch

Trigger
00
Australia

Point
20

Singapore

USA

China

India India

0 100 200 300 400 500 600 700 800

Per capita in KG

India will be a part of The new Steel world …

7
 PRODUCTS

FLAT PRODUCT BEARINGS LONG

PRODUCT

STEELJUNCTION
BRANDS
PROCESS
 HUMAN RESOURCE
• The Tata Steel Group believes that its people are
as much its assets as its infrastructure. And that
the creation of value for the company depends
on their professional and personal well-being.
• Tata Steel’s Management Trainee programme
has recruited a large number of trainees from
different premier Institutes across India.
 HUMAN RESOURCE
• Trainings and Motivation
• Rewards and Awards
• Appraisal system
• Employees welfare Act.
• Special Experience Delegates for short assignment in coras.
• Business Programmers
• Lateral Move.
• In addition, Customized Training programmes in the functional
areas of Project Management, Contract Management, Financial
Management, Commercial Taxes, Supply Chain Management,
and Marketing and Sales Management have been developed.
 SWOT Analysis – Tata
Strengths
Steel
5-th Largest Steel Manufacturer in the
Weaknesses

Large debt of Rs.35,000 crores after

World CORUS acquisition
Combined Capacity of 28.2 Million Pressure on Margins due to Increased
Tonnes – 3 times current capacity Capacity
More than 100 years experience in the Short Term Operational Issues, till
Steel Industry CORUS debt completely meet up.

Opportunities Threats

UK Steel Market is available to Tata Bringing Operational Synergies within

Steel for selling its products the Leverage Return Time
Consistent Growth Rate could take the Consolidation in the Top 3 positions
TATA-CORUS combine to 4th place that might hurt margins even further
within the next 3-4 years
Arcelor Mittal’s Presence in Markets in
the UK poses an imminent threat
 CORUS DEAL – IMPACT

Key Points:
• The estimates suggest that the combined entity would continue to generate a
growth rate in excess of 28%.
• The ROCE & ROE would dip significantly on the merger, but would then start
increasing.
• Most Importantly, the huge Interest and Principal Repayment obligations would
be met.
 AWARDS
• International Financing Review (IFR) Asia
awarded Tata Steel the Best Syndicated/Leveraged
Loan for the financing of the acquisition of Corus
• Tata Steel won the Most Admired Knowledge
Award (MAKE Asia) for the year 2007
• The Amity Corporate Excellence Award from
Amity International Business School
• Business Today and Ernst & Young surveys rated
Tata Steel as India’s Best Managed Company in
Metals and Mining
 LAW AND LEGAL
Bombay House, 24 Homi Mody Street,
REGISTER Fort, Mumbai 400 001. Tel : (022) 6665
ED 8282
OFFICE Fax : (022) 6665 7724 / 6665 7725
E-mail : [email protected]
Website: www.tatasteel.com
TSR Darashaw Limited
6-10, Haji Moosa Patrawala Industrial Estate,
20, Dr. E. Moses Road, Mahalaxmi, Mumbai
SHARE 400 011.
REGISTRARS Tel : (022) 6656 8484 Fax : (022) 6656
8494 / 6656 8496
 E-mail : [email protected]
Website : http://www.tsrdarashaw.com

Contd…
 LAW AND LEGAL
AZB & Partners
LEGAL Amarchand & Mangaldas & Suresh A.
ADVISORS Shroff & Co.
Mulla & Mulla and Craigie Blunt &
 Caroe

Herbert Smith LLP

Cleary Gottlieb Steen & Hamilton LLP
Linklaters LLP
Freehills
Milbank, Tweed, Hadley & McLoy LLP

AUDITORS Messrs Deloitte Haskins & Sells


 INVESTMENT IN
INFRASTRUCTURE SEGMENT
PROJECTED INVESTMENT Till 2012 by Committee on Infrastructure

Planned Exp
RS Billion FY 03 FY 04 FY 05 FY 06 FY 07
in next 5 years
Airports 20 15 15 24 25 400

Irrigation 151 139 208 222 252 1300

Ports 7 5 5 10 20 500

Power 232 312 340 350 346 2000

Railways 121 135 153 146 140 750

Roads 206 190 199 212 213 1700

Telecom 133 126 89 116 116 800

Urban Infra. 162 174 184 220 250 1400

 BACKUP-FUTURE
PLANS
• India will become the fastest growing economy out of
34 developed and emerging markets and 3rd largest
economy by 2020.
• Current GDP per capita is USD 2500 and expected to
be USD 5000 in 2020.
• Poverty ratio dropped from 50% of population in
1950 to 26% in 2005.
• Economic growth rose from 3.7% in 50s & 60s to
+6% in 1980s.
• Current population growth rate of 1.5% to decrease to
1.3% in 2020.
 FINANCE
• Increase earnings from current operations by optimizing assets,
continuous improvement, and achieving synergies across all
Business Units
• Growth through capacity expansion, mining projects, enhanced
Research and Development and innovation
• The company raised around USD 6.2 billion of term debt with an
average life of around 5 years
• On the equity side, company raised around USD 2.27 billion (Rs.
9,120 crores)of equity and convertible preference shares
• Company raised around USD 10 billion during the year and
completed the long term financing for the Corus acquisition
Contd…
 FINANCE
• Focus on improvement in the working capital management and allocation
of capital to value creating projects.
• Borrow Long –Term fund for other growth projects as required based on
the Company’s long term financing strategy which ensures strong capital
structure
• Made the strategy for return on invested capital improve from 19% to30%
over the next 5 years
• Dispose and restructure assets that are of low profitability
• Tata Steel signed a Joint Venture agreement with the members of the Al
Bahja Group, a leading business house in Oman for lime stone
• Tata Steel signed a joint venture with Riversdale listed company on
Australian stock exchange with 35 % interest for Coking Coal
Contd…
 FINANCE
• Tata Steel has a Joint Venture with Vale in Australia
for a Coking Coal mine for enhance the long term
competitiveness of its global operations
• Tata Steel has signed an equal stakes Joint Venture
agreement with Steel Authority of India (SAIL), for
coal mining activities in India.
Profit & Loss Account - Analysis
 M A CALCULATION
Rs.(IN CRORES)

P.V. Ratio Difference in Profits 100

Difference in Sales

10546.56-8948.73 100
22191.80-19762.57
1597.83 100
2429.23

65.78%
 M A CALCULATION
Rs.(IN CRORES)
Break-Even- Fixed Cost
Sales(Rs.) P.V. Ratio

3680.25
65.78%

Rs.2420.86
 M A CALCULATION
Rs.(IN CRORES)
• Margin Of Safety(MOS)
MOS Total Sales-Break Even Sales
22191.80-2420.86
Rs. 19770.94
 RATIOS
• Current Ratio 1.87:1

• Interest Cover Ratio 9.04 Times

• Debt-To-Equity Ratio 0.66:1

• Return on Capital Employed 21.97%

• Assets Turnover Ratio 106.25%

TAHNK
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