It's a group presentation made for Advanced Financial Management by the Student of IBS Mumbai which is made on Case Study - Working capital management at SAIL. This case study you can find on IBS cases or ICMR.

1. Working Capital
Management at SAIL

2. Presented by:
Bhargav Jasti 19BSP0662
Anjali Soni 19BSP3566
Akansha Singh 19BSP0199
Saleha Butt 19BSP2407
Muddasir Moolji 19BSP1615
Krishnali Kawale 19BSP1355

3. INTRODUCTION
• Working capital is life blood of the business
• SAIL has the status of “Maharatna”
• Bouncing back of Chinese
• SAIL was facing decline in sales
• Reduction in profitability of company

4. HISTORY OF SAIL
• Foundation of SAIL was laid in the early years post independence
• Focus on infrastructure and growth
• Hindustan Steel Private Ltd was set up in 1954

5. EMERGENCE OF SAIL
• Rourkela was the only plant under Hindustan Steel
• Initially: Bhilai and Durgapur Steel plant under Iron and Steel Ministry
of India
• Later (1957): Bhilai and Durgapur Steel plant transferred to Hindustan
Steel
• Bhilai, Durgapur and Bukaro started with operation in 1964

6. • Proposal of new policy for managing steel industry at the Parliament in
1972
• Steel Authority of India Ltd
(SAIL) came into emergence in 1973 to manage Input and Output with
20bn authorized capital
• Responsible for 5 plants (Bhilai, Durgapur, Bukaro, Rourkela and
Burnpur)
• The Government of India owns 75% of equity
• ‘Maharatna Status’ of SAIL

7. STEEL MANUFACTURING
PROCESS

9. Integrated steel plants of SAIL
• Located in Eastern and Central Regions
• Situated close to domestic sources of raw materials
• Operates and owns 5 integrated steel plants
• 3 Special steel plants
• Owns a Ferro Alloy plant at Chandrapur

10. Plants Products
Bhilai Steel Plant Rails, Blooms, Billets, slabs, Channels, Angles,
Wire Rods, Plates
Durgapur Steel Plant Blooms, Billets, Joints, Narrow Slabs, MT Rebars,
Wheels, Coal Chemicals
Rourkela Steel Plant Plate Mill Plates, HR Plates, CR sheet, Galvanised
Sheets, Spiral Weld pipes
Bokaro Steel Plant HR coils, Slabs, HR sheets, Plats, GC Sheets
IISCO Steel Plant Wire Rods, Bars and Rebars, Joists
Salem Steel Plant Cold rolled stainless steel, hot rolled carbon and
stainless steel products
Alloy Steel Plant Alloy steel squares and Rounds

11. SAILING IN ROUGH WINDS
• Sales turnover during 2014-15 had fallen 2%
• Steel prices gradually declined and made a rock bottom
• Net profit negatively impacted by stagnant saleable steel
production
• Increase in purchased power rate and loyalty on Iron ore
• Higher usage of imported coal and Interest rates

12. Continued
• Higher salaries and wages, stores and spare expenditure
• Debt – equity ratio reached its highest value (0.69) during the
decade
• Current Ratio declined to its lowest

13. Industry Outlook
• The industry performance depended on the recovery of global markets
• The domestic demand was predicted to improve the situation of the steel
company
• The initiatives by Govt. of India to increase steel production in the country
• Huge scope for growth in investment
• Relatively low per capita steel consumption

14. Measures taken to tackle HEAD WINDS
• Optimum utilisation of funds by better fund management
• Replaced high cost, short-term loans with low cost debts
• Strategic parking of surplus funds and taken action for future fund raising
• Hedged foreign currency risk on buyer’s credit
• Repayment of ECB’s depending on market conditions
• Paid an interim dividend of 17.5% of paid –up equity share capital during
FY 2014-15

15. CONCLUSION
• Selective Inventory Control shall be carried out for all the components of
inventory
• JIT shall be followed to reduce the blocking up of working funds in
inventory
• SAIL shall improve liquidity performance
• Inventory turnover ratio has to be increased

16. THANK YOU