Tata Steel : deriving value from an optimal capital structure / Hemant Kumar Manuj.

Format:

Book

Author/Creator:

Manuj, Hemant Kumar, author.

Series:

SAGE business cases.

SAGE business cases

Language:

English

Subjects (All):

Tata Steel--Case studies.

Tata Steel.

Financial leverage--Case studies.

Financial leverage.

Physical Description:

1 online resource : illustrations.

Place of Publication:

London : SAGE Publications : SAGE Business Cases Originals, 2022.

Summary:

With a sales turnover of USD 19 billion in the financial year ending March 2020, Tata Steel Limited (Tata Steel or TSL) is the largest steel producing company in India and is among the 10 largest steel producers in the world. Tata Steel experienced losses in recent years on account of a decline in steel prices and a high level of financial leverage (defined as the debt-to-equity ratio). The company has, since 2018, been making efforts to reduce its financial leverage, through multiple measures. The board and the senior management were cognisant of the need to further reduce the financial leverage to de-risk the earnings of the company. This case presents - and then discusses - the thought process of the shareholders and the management of a company while deciding on its optimal capital structure. The factors influencing the decision and the relationship of the capital structure with the business and strategic directions of the company are evaluated. The case is primarily from the point of view of an external shareholder who is not a promoter or a part of company management. The other stakeholders, such as creditors or employees, are equally important, but are not the central focus of this case. Students will be asked to analyse the impact of financial leverage on the value created for the shareholders. In addition, they also discuss the factors behind such decision making and the interaction between the investment plans, business strategy, and the capital structure of a company.

Notes:

Includes bibliographical references and index.

Description based on XML content.

ISBN:

1-5297-7964-2

9781529779646

OCLC:

1290779619