INVESTMENT PATTERN IN GLOBAL RECESSION by JEAY &VJ (MUDOMS)<br />
Recessions may very well be the greatest investment opportunities of a person's lifetime.<br />Economists officially defin...
Undervalued Securities<br />Lower Home Prices for First-Time Buyers<br />Consumer Bargains<br />Lower Interest Rates<br />...
Capital investment<br />Lay off<br />Dormant mode<br />Merger & Acquisition<br />OPTIONS IN RECESSION<br />
Improve liquidity position <br />Search for new sources of income<br />Bring immunity to business for a long-term survival...
CASE OF TATA STEEL & CORUS<br />
<ul><li>Founded in 1907,by Jamshedji Nusserwanji Tata with a production capacity of 1,00,000 tones
In the mid- 1990s, emerged as Asia’s first and India’s largest integrated steel producer in the private sector.
Feb 2005 - Acquired Singapore steel manufacturer NatSteel - Access to major Asian markets and Australia.
Dec 2005 - Acquired Thailand based Millennium Steel.
Financial year 2006-07 - Net sales Rs.175 billion.
Profit before tax - Rs. 64.14 billion
Profit after tax - Rs. 42.22 billion.  </li></ul>TATA STEEL PROFILE<br />
THE TATA STEEL FACTOR!<br />
THE LONG TERM STRATEGY<br />
<ul><li>Formed on 6th October 1999, (Merger of two companies, British Steel and Koninklijke Hoogovens)
Company had four divisions: Strip product , Long product , Aluminum and Distribution and Building system.
Major plants in UK, Netherlands, Germany, France, Norway and Belgium.
Supplies to the most demanding markets worldwide including construction, automotive, packaging, engineering.</li></ul>CORU...
THE CORUS FACTOR!<br />
Upcoming SlideShare
Loading in …5
×

Investment in global recession

42,301 views

Published on

what form of investment is good for the company to survive or take advantage during recession

Published in: Economy & Finance, Business
1 Comment
4 Likes
Statistics
Notes
  • sx-sx@hotmail.fr
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
42,301
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
61
Comments
1
Likes
4
Embeds 0
No embeds

No notes for slide

Investment in global recession

  1. INVESTMENT PATTERN IN GLOBAL RECESSION by JEAY &VJ (MUDOMS)<br />
  2. Recessions may very well be the greatest investment opportunities of a person's lifetime.<br />Economists officially define a recession as two consecutive quarters of negative growth in gross domestic product (GDP). <br />The National Bureau of Economic Research cites "a significant decline in economic activity spread across the economy, lasting more than a few months" as the hallmark of a recession.<br /> A recession generally fat trimming for companies, from which they should emerge stronger, and that's good news for investors. <br />companies performing well in a recession will also perform well in a recovery<br />RECESSION <br />
  3. Undervalued Securities<br />Lower Home Prices for First-Time Buyers<br />Consumer Bargains<br />Lower Interest Rates<br />Stimulus Opportunities<br />Debt Forgiveness or Reduction<br />Firing/layoffs of incompetents (better promotion prospects)<br />7 OVERLOOKED BENEFITS OF THE RECESSION<br />
  4. Capital investment<br />Lay off<br />Dormant mode<br />Merger & Acquisition<br />OPTIONS IN RECESSION<br />
  5. Improve liquidity position <br />Search for new sources of income<br />Bring immunity to business for a long-term survival and growth<br />BEST STRATEGY TO COUNTER RECESSION<br />
  6. CASE OF TATA STEEL & CORUS<br />
  7. <ul><li>Founded in 1907,by Jamshedji Nusserwanji Tata with a production capacity of 1,00,000 tones
  8. In the mid- 1990s, emerged as Asia’s first and India’s largest integrated steel producer in the private sector.
  9. Feb 2005 - Acquired Singapore steel manufacturer NatSteel - Access to major Asian markets and Australia.
  10. Dec 2005 - Acquired Thailand based Millennium Steel.
  11. Financial year 2006-07 - Net sales Rs.175 billion.
  12. Profit before tax - Rs. 64.14 billion
  13. Profit after tax - Rs. 42.22 billion. </li></ul>TATA STEEL PROFILE<br />
  14. THE TATA STEEL FACTOR!<br />
  15. THE LONG TERM STRATEGY<br />
  16. <ul><li>Formed on 6th October 1999, (Merger of two companies, British Steel and Koninklijke Hoogovens)
  17. Company had four divisions: Strip product , Long product , Aluminum and Distribution and Building system.
  18. Major plants in UK, Netherlands, Germany, France, Norway and Belgium.
  19. Supplies to the most demanding markets worldwide including construction, automotive, packaging, engineering.</li></ul>CORUS<br />
  20. THE CORUS FACTOR!<br />
  21. Valuing the Acquisition: Method used Enterprise value multiple.<br />EV represents a company’s economic value, the minimum amount someone would have to pay to buy it outright.<br />EV = Market Capital + Preference Stocks + Minimum interest +long term debt – cash equivalent.<br />EV = 3.5 billion + 0 + 26 billion + 1308 million – 871 million<br />VALUATION<br />
  22. <ul><li>Tata acquired Corus on 2nd April 2007 .
  23. The deal price was US $12.11 Billion.
  24. On 17 Oct, 2006 Tata’s bid was 455 pence per share (Normal rate 390 pps).
  25. Tata Steel, the winner of the auction, declared a bid of 608 pps surpassing the Brazilian steel maker CSN (603 pps).
  26. The combined entity became the world’s 5th largest steelmaker of the world.</li></ul>FINAL DEAL<br />
  27. <ul><li>Tata was one of the lowest cost steel producers & Corus was fighting to keep its productions costs under control .
  28. Tata had a strong retail and distribution network in India and SE Asia. Hence this would bring a combination of high quality developed and low cost high growth markets.
  29. Technology transfer & cross-fertilization of R&D capabilities .
  30. There was a strong culture fit between the 2 organizations which highly emphasized on continuous improvement & Ethics.
  31. Economies of Scale and Increase in profitability.
  32. Backward integration for Corus and Forward integration for Tata Steel.</li></ul>SYNERGY<br />
  33. INCOME STATEMENT OF TATA STEAL<br />
  34. INCOME STATEMENT OF CORUS<br />
  35. OUTCOME<br />
  36. PROJECTED CAPACITY<br />
  37. GLOBAL RANKING<br />
  38. Acquisition is strong pattern of investment<br />Recession facilitates Reverse Takeover phenomena<br />Cost advantage of Bear market<br />In long term, high yields and capital appreciation occurs<br />Synergy and Global Market entrance<br />CONCLUSION<br />

×