COMPARATIVE ANALYSIS OF FINANCIAL STATEMENT OF SAIL AND TATA STEEL (KEY IJP************015)

• Md Aquib

Abstract

India ranked as the worlds third-largest steel producer in 2016, driven by the abundant domestic supply of raw materials like iron ore and cost-effective labor, thus significantly contributing to the countrys manufacturing output. The Indian steel industry boasts state-of-the-art steel mills and has consistently pursued modernization and upgrading of older plants, aiming for higher energy efficiency levels. Categorized into major producers, main producers, and secondary producers, the Indian steel industry is a crucial sector. During 2014-2015, India emerged as the third-largest producer of raw steel and the largest producer of sponge iron globally, churning out 91.46 million tons of total finished steel and 9.7 million tons of pig iron, predominantly sourced from iron ore. The Indian Ministry of Steel is tasked with coordinating and planning the growth and development of the iron and steel industry, formulating policies regarding production, pricing, distribution, import, and export of iron and steel, ferro alloys, and refractories, and fostering the development of input industries essential for the steel industry, such as iron ore, manganese ore, chrome ore, and refractories. Investments:The steel industry and their associated mining sectors have witnessed significant investments. According to data from the Department of Industrial Policy and Promotion (DIPP), the Indian metallurgical industries attracted Foreign Direct Investments (FDI) worth US$ 10.419 billion from April 2000 to September 2017. Key investments in the Indian steel industry include JSW Steel's planned US$ 4.14 billion capital expenditure program to boost steel output capacity from 18 million tons to 23 million tons by 2020. Rashtriya Ispat Nigam Ltd (RINL) signed a Memorandum of Understanding (MOU) with Kudremukh Iron Ore Company Ltd to establish a 1.2 million ton per annum (MTPA) plant project in Vishakhapatnam. Tata Steel is set to increase the capacity of its Kalinga Nagar integrated steel plant from 3 million tons to 8 million tons with an investment of US$ 3.64 billion.Market Size:In CY 2017, India's crude steel output increased by 5.87 percent year-on-year to reach 101.227 million tons (MT). During April-December 2017, crude steel production grew by 4.6 percent year-on-year to 75.498 MT. Additionally, finished steel exports surged by 102.1 percent to 8.24 MT in 2016-17, while imports declined by 36.6 percent to 7.42 MT. In the same period, finished steel exports rose by 52.9 percent to 7.606 MT, and imports increased by 10.9 percent to 6.096 MT. Total consumption of finished steel grew by 5.2 percent year-on-year to 64.867 MT during April-December 2017.Government Initiatives:The Indian government's focus on infrastructure development and the resurgence of road projects are boosting demand for steel. Additionally, the anticipated acceleration in the rural economy and infrastructure is expected to drive further demand for steel. The Union Cabinet, Government of India, approved the National Steel Policy (NSP) 2017, aiming to establish a globally competitive steel industry in India. NSP 2017 targets a steel-making capacity of 300 million tons (MT) and a per capita steel consumption of 160 kgs by 2030. Furthermore, initiatives like the 'MSTC Metal Mandie-platform under the 'Digital Indiainitiative, launched jointly by the Metal Scrap Trade Corporation (MSTC) Limited and the Ministry of Steel, facilitate the sale of finished and semi-finished steel products. The Ministry of Steel is also facilitating the establishment of an industry-driven Steel Research and Technology Mission of India (SRTMI) in collaboration with public and private sector steel companies, with an initial corpus of Rs 200 crore (US$ 30 million), to spearhead research and development activities in the iron and steel industry.