shivaraj final report
TRANSCRIPT
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ICICI BANK
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Karnataka University Dharwad
Global College of Business Management & IT
Akshay colony, Hubli.
An empirical study on
HUBLI
Guide
Prof. Jayshree K.
Submitted by
Mr. Pandurang K.Hanamasagar
URN: 09B11822
BBA VI SEMESTER
2011-2012
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GLOBAL COLLEGE OF BUSINESS MANAGEMENT & IT
Akshay colony, Hubli.
(Affiliated to Karnataka University, Dharwad and recognized by Govt. of
Karnataka)
CERTIFICATE
This is to certify that Mr. Pandurang K.Hanamasagar URN:09b11822 has
satisfactorily completed his project entitled TAX-PLANNING OF SALARIED
PERSONS, HUBLI.In the partial fulfillment of the requirement of bachelor of
business administration, during the academic year 2011-12.
Internal Guide External Guide
Prof. Jayshree K.M.com Mr. Anand.Shenoy
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DECLARATION
I hereby affirm that this project report A Project on A Study on the Customer
relationship Management Adopted By ICICI Prudential Insurance Company Ltd
HUBLI hasbeen under taken by me during the period 1st December 2011 to 30th December2011 as a part of my academic curriculum.
I further declare that, this project report is the result of my own efforts and has not
been submitted earlier to any other college/university for award of any other degree.
DATE: _________ Bhramkumar.S.K
Reg.no: 08b14803 PLACE: HUBLI
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ACKNOWLEDGEMENT
The successful accomplishment of any task is incomplete without
acknowledging the personalities who have contributed, assisted and inspired
me.
I would like to thank my parents for supporting me in doing this project.
I would like to thank KARNATAK UNIVERSITY DHARWAD for giving an
opportunity to work on a valuable project.
At the outset I would like to acknowledge my sincere gratitude to ICICI life
insurance pvt ltd for allowing me to take my implant training at their in the
same.
I express my sincere thanks to Prof.Ravikumar.Kabbinad for rendering her
kind cooperation and help without which my project would have been
incomplete.
At the same time I would like to take this opportunity to thank our
beloved Principal Prof.Ravikumar.Kabbinad and BBA Co-ordinator
Dr.Mahesh.Deshpande who supported me and for their guidance of this
project.
I would like to express my gratitude to all those who directly and
indirectly assisted me in completing the project report.
Bhramkumar.S.KReg.no: 08b14803
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EXECUTIVESUMMARY
In any organization, the two important financial statements are the
Balance sheet & Profit and loss account ofthe business. Balance sheet is a statement of the
financial position of an enterprise at a particular point of time. Profit and loss account shows the net
profit or net loss of a company for a specified period of time. When these statements of the last few
year of any organization are
studied and analyzed, significant conclusions may be arrived regarding thechanges in the
financial position, the important policies followed and trends in profit and loss etc. Analysis and
interpreta tion of the financia l statement has now become an important technique of credit appraisal.
The investors, financial experts, management executives and the bankers all analyze these statements.
Though the basic technique of appraisal remains the same in all the cases
butt h e a p p r o a c h a n d t h e e m p h a s i s i n a n a l y s i s v a r y . A b a n k e r i n t e r p r e t s t h
e financial statement so as to evaluate the financial soundness and stability, the liquidity position
and the profitability or the earning capacity of
borrowingc o n c e r n . A n a l y s i s o f f i n a n c i a l s t a t e m e n t i s n e c e s s a r y b e c a u s e i t
he lp in depic ting the f inancia l pos i t ion on the bas i s of pas t and cur rent r ecords
. A n a l ys i s o f f i n a n c i a l s t a t e m e n t h e l p s i n m a k i n g t h e f u t u r e d e c i s i o n a n d s
trategies. Therefore, it is very necessary for every organization whether it is a financial or manufacturing
etc. to make financial statement and to analyze it.
INTRODUCTION
Objective of Study
The main objectives of this project are the following:
To Study About Fundamental Analysis of ICICI Bank.
Company Profile
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ICICI BANK:
ICICI Bank is Indias second-largest bank with total assets of363866.83 Crores at March 31,
2010.and profit after tax of Rs. 41.58 billion for the year ended March 31, 2010
. ICICI Bank is the most valuable bank in India in terms of market capitalization and is ranked second
Amongst all the companies listed on the Indian stock exchanges.
In terms of free float market capitalization*.The Bank has a network of about 1308
Branches and 3,950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of
banking products and financia l services to corporate and re tail customer through a variety
of delivery channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, life and non-li fe insurance, venture capital and asset management.
The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore,
Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Center and representative
offices in the
UnitedStates, United Arab Emirates, China, South Africa, Bangladesh, Thailand , Malaysia
and Indonesia. UK subsidiary has established a branch in Belgium.ICICI Bank's
Equity shares are listed in India on Bombay Stock Exchange (BSE) and the
Nation al Sto ck Ex chang e (NSE) of Ind ia Limi ted an d its American Depositary
Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
HISTORY:
ICICI Bank was originally promoted in 1994 by ICICI Limited , an Indian
financial institution, and was its wholly owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in
the form of ADRs li st ed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura
Limited in an all Stock amalgamation i n f i s c a l 2 0 0 1 ,
a n d s e c o n d a r y m a r k e t s a l e s b y I C I C I t o institutional investors in fiscal 2001
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and fiscal 2002. ICICI was formed in 1955at the initiative of the World Bank, the Government of India and
representatives
of I n d i a n i n d u s t r y . T h e p r i n c i p a l o b j e c t i v e w a s t o c r e a t e a d e v e l o p m e n t fina
ncial institution for providing medium-term and long-term project
financingto Indian businesses.In the 1990s, ICICI transformed its business from ad
evelopment financial institution offering only project finance to a diversified financial services group
offering a wide variety of products and services, both directly and through a number of subsidiaries
and affiliates like ICICI Bank. In1999, ICICI become the first Indian company and the first
bank or financial institution from non-Japan Asia to be listed on the NYSE.After consideration of various
corporate structuring alternatives in the context of the emerging competitive scenario in the
Indian banking industry, and the move towards universal banking, the managements of
ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the
optimalstrategi c a l ternat ive for both enti t i es , and would create the optim al l egalstr
ucture for the ICICI group's universal banking strategy. The merger would enhance value for ICICI
shareholders through the merged entity's access to low-cost deposits, greater opportunities for earning fee-
based income and the ability to participate in the payments system and provide transaction-banking
services. The merger would enhance value for ICICI Bank shareholders through a large capital base
and scale of operations, seamless access to ICICI's strong corporate relationships built up over five
decades, entry into new business
segments,higher market share in var ious bus iness segments , par t icular ly fe e-
ba se dservices, and access to the vast talent pool of ICICI and its subsidiaries.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI
and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial Services Limited
and ICICI Capital Services Limited, with ICICI Bank. The merger was approved by
shareholders of ICICI and ICICI Bank in January 2002, by the High Citst of Gujarat at
Ahmedabad in March2002, and by the High Cost of Judicature at Mumbai and the Reserve Bank
of India in April 2002. Consequent to the merger, the ICICI group's financing and banking
operations, both wholesale and retail, have been integrated in a single entity. ICICI Bank has
formulated a Code of Business Conduct and Ethics for its directors and employees
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Economic Analysis
The Level of economic Activity has an impact on investment in many ways. If the economy grows
rapidly, the industry can also be expected to show rapid growth and vice versa. When the level of
economic activity is low, stock prices are low, and when the level of economic activity is high, stock
prices are high reflecting the prosperous outlook for sales and profits of the firms. The analysis of
macroeconomic environment is essential to understand the behavior of the stock prices .The
commonly analyzed Macro economic factors are as follows
A) Gross Domestic product ( GDP )
GDP indicates the rates of growth of the economy. GDP represents the aggregate value of the goods
and services produced in the economy. GDP consists of personal consumption expenditure, gross
private domestic investment and government expenditure on goods and services and net export of
goods and services. The estimates of GDP are available on an annual basis. The rate of growth of
GDP is around 6% in the nineties. The GDP growth in 2001-02 accelerated to 4.4% compared to 4%
of the previous year despite of drought in the country. In the fiscal year Agricultural growth has been
reduced from 5.3% to 3.7% whereas Industrial growth has been increased to 6.1% to 3.3%.
Introduction to Banking Sector
The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can
be broadly classified into two major categories, non-scheduled banks and scheduled banks.
Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership,
commercial banks can be further grouped into nationalized banks, the State Bank of India and its
group banks, regional rural banks and private sector banks (the old/ new domestic and foreign).
These banks have over 67,000 branches spread across the country.
The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of
the Indian Banking system are in the process of shedding their flab in terms of excessive manpower,
excessive non Performing Assets (Npas) and excessive governmental equity, while on the other hand
the private sector banks are consolidating themselves through mergers and acquisitions.
PSBs, which currently account for more than 78 percent of total banking industry assets are saddled
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with NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from traditional sources, lack
of modern technology and a massive workforce while the new private sector banks are forging ahead
and rewriting the traditional banking business model by way of their sheer innovation and service.
The PSBs are of course currently working out challenging strategies even as 20 percent of their
massive employee strength has dwindled in the wake of the successful Voluntary Retirement
Schemes (VRS) schemes.
The private players however cannot match the PSBs great reach, great size and access to low cost
deposits. Therefore one of the means for them to combat the PSBs has been through the merger and
acquisition (M& A) route. Over the last two years, the industry has witnessed several such instances.
For instance, HDFC Banks merger with Times Bank ICICI Banks acquisition of ITC Classic,
Anagram Finance and Bank of Madura. Centurion Bank, IndusInd Bank, Bank of Punjab, Vysya
Bank are said to be on the lookout. The UTI bank- Global Trust Bank merger however opened a
Pandoras box and brought about the realization that all was not well in the functioning of many of
the private sector banks.
Aggregate Performance of the Banking Industry
Aggregate deposits of scheduled commercial banks increased at a compounded annual average
growth rate (Cagr) of 17.8 percent during 1969-99, while bank credit expanded at a Cagr of 16.3
percent per annum. Banks investments in government and other approved securities recorded a Cagr
of 18.8 percent per annum during the same period.
In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth of only 6.0
percent as against the previous years 6.4 percent. The WPI Index (a measure of inflation) increased
by 7.1 percent as against 3.3 percent in FY00. Similarly, money supply (M3) grew by around 16.2
percent as against 14.6 percent a year ago.
The growth in aggregate deposits of the scheduled commercial banks at 15.4 percent in FY01
percent was lower than that of 19.3 percent in the previous year, while the growth in credit by SCBs
slowed down to 15.6 percent in FY01 against 23 percent a year ago.
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The industrial slowdown also affected the earnings of listed banks. The net profits of 20 listed banks
dropped by 34.43 percent in the quarter ended March 2001. Net profits grew by 40.75 percent in the
first quarter of 2000-2001, but dropped to 4.56 percent in the fourth quarter of 2000-2001.
Interest Rate Scene
The two years, post the East Asian crises in 1997-98 saw a climb in the global interest rates. It was
only in the later half of FY01 that the US Fed cut interest rates. India has however remained more or
less insulated. The past 2 years in our country was characterized by a mounting intention of the
Reserve Bank Of India (RBI) to steadily reduce interest rates resulting in a narrowing differential
between global and domestic rates.
The RBI has been affecting bank rate and CRR cuts at regular intervals to improve liquidity and
reduce rates. The only exception was in July 2000 when the RBI increased the Cash Reserve Ratio
(CRR) to stem the fall in the rupee against the dollar. The steady fall in the interest rates resulted in
squeezed margins for the banks in general.
Governmental Policy
After the first phase and second phase of financial reforms, in the 1980s commercial banks began to
function in a highly regulated environment, with administered interest rate structure, quantitative
restrictions on credit flows, high reserve requirements and reservation of a significant proportion of
lendable resources for the priority and the government sectors. The restrictive regulatory norms led
to the credit rationing for the private sector and the interest rate controls led to the unproductive use
of credit and low levels of investment and growth. The resultant financial repression led to decline
in productivity and efficiency and erosion of profitability of the banking sector in general.
This was when the need to develop a sound commercial banking system was felt. This was worked
out mainly with the help of the recommendations of the Committee on the Financial System
(Chairman: Shri M. Narasimham), 1991. The resultant financial sector reforms called for interest
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rate flexibility for banks, reduction in reserve requirements, and a number of structural measures.
Interest rates have thus been steadily deregulated in the past few years with banks being free to fix
their Prime Lending Rates(PLRs) and deposit rates for most banking products. Credit market
reforms included introduction of new instruments of credit, changes in the credit delivery system and
integration of functional roles of diverse players, such as, banks, financial institutions and non-
banking financial companies (Nbfcs). Domestic Private Sector Banks were allowed to be set up,
PSBs were allowed to access the markets to shore up their Cars.
Indian Banking Sector Analysis (2006-2007), provides extensive research and objective analysis on
the growing banking industry, their product quality, and their services in India. This report helps
clients to analyze the leading-edge opportunities critical to the success of the banking Industry in
India. Detailed data and analysis helps an investor, financial service providers, and global banking
players navigate the evolving market of banks in India.
Key Findings:
-The nationalized banks have more branches than any other types of banks in India. Now there are
about 33,627 Branches in India, as on March 2005.
-Investments of scheduled commercial banks (SCBs) also saw an increase from Rs 8,04,199 crore in
March 2005 to Rs 8,43,081 crore in the same month of 2006.
-India's retail-banking assets are expected to grow at the rate of 18% a year over the next four years
(2006-2010).
-Retail loan to drive the growth of retail banking in future.
-Housing loan account for major chunk of retail loan
BOARD OF DIRECTORS
MR. N.Vaghul (CHAIRMAN)
MR. Sridar Iyengar
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MR. Lakshmi N. Mittal
MR. Narendra Murkumbi
MR. Anupam Puri
Mr. Arun Ramanathan
MR. M. K. Sharma
MR. P.M. Sinha
Prof. Marti G. Subrahmanyam
MR. T. S. Vijaya
MR. V. Prem Wasta
MR. K. V. Kamath (MANAGING DIRECTOR & CEO)
MR. Chanda Kochhar (JOINT MANAGING DIRECTOR)
MR. V. Vaidyanathan, (EXECUTIVE DIRECTOR)
Ms. Madhabi Puri-Buch, Executive Director
MR. Sonjoy Chatterjee (EXECUTIVE DIRECTOR)
Board Committees
Audit CommitteeBoard Governance, Remuneration &
Nomination Committee
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Mr. Sridar Iyengar, Chairman
Mr. Homi Khusrokhan,
Mr. M.S. Ramachandran
Mr. V. Sridar
Mr. Sridar Iyengar, Chairman
Mr. K.V. Kamath
Mr. Homi Khusrokhan
Corporate Social Responsibility
CommitteeCustomer Service Committee
Mr. M.S. Ramachandran, Chairman
Mr. Arvind Kumar
Dr. Tushaar Shah
Ms. Chanda Kochhar
Mr. K.V. Kamath, Chairman
Mr. M.S. Ramachandran
Mr. V. Sridar
Ms. Chanda Kochhar
Credit Committee Fraud Monitoring Committee
Mr. K.V. Kamath, Chairman
Mr. M.S. Ramachandran
Mr. Homi Khusrokhan
Ms. Chanda Kochhar
Mr. V. Sridar, Chairman
Mr. K.V. Kamath
Mr. Homi Khusrokhan
Mr. Arvind Kumar
Ms. Chanda Kochhar
Mr. Rajiv Sabharwal
Information Technology (IT)
Strategy Committee
Risk Committee
Mr. Homi Khusrokhan, Chairman Mr. K.V. Kamath, Chairman
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Mr. K.V. Kamath
Mr. Sridar Iyengar
Ms. Chanda Kochhar
Mr. Sridar Iyengar
Mr. Arvind Kumar
Mr. V. Sridar
Ms. Chanda Kochhar
Share Transfer & Shareholders'/
Investors' Grievance CommitteeCommittee of Executive Directors
Mr. Homi Khusrokhan, Chairman
Mr. V. Sridar
Mr. N.S. Kannan
Ms. Chanda Kochhar, Chairperson
Mr. N.S. Kannan
Mr. K. Ramkumar
Mr. Rajiv Sabharwal
VISION AND MISSION
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Vision
To be the l eading provider of financial services in India and major global bank.
Mission
We will leverage our people, technology, speed and financial capital to:
Be the ban ker of firs t c hoi ce for our cus tom ers by del ive rin g high quality, world-
class products and services.
Expand the frontiers of our business globally.
Play a proactive role in the full realization of Indias potential.
Maintain a healthy financial profile and diversify our earnings across businesses
and geographies.
Maintain high standards of governance and ethics.
Con tri but e po siti vel y to the var iou s c oun trie s an d ma rket s in which we operate.
Create value for our stakeholders.
RISK ASPECTS OF ICICI BANK
RISK MANAGEMENT
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Risk is an integral part of the banking business and bank aim at delivering superior
shareholder value by achieving an appropriate trade-off between risk and returns. Bank is exposed to
various risks, including credit risk, market
risk and operational risk. Banks r i sk management s t rategy is based o n a clear un
derstanding of various risks, disciplined risk assessment and measurement procedures and
continuous monitoring. The policies and procedures established for this purpose are continuously benchmarked with
international best practices. Bank has two dedicated groups, the RISK MANAGEMENT
GROUP (RMG)
a n d C O M P L I A N C E & A U D I T G R O U P ( C A G ) w h i c h i s r e s p o n s i b l e f o r a ss
essment, management and mitigation of risk in ICICI Bank. These groups from parts of
the co rporate center are completely independent of al l business operations and are
accountable to the Risk and Audit committees of the Board of directors. RMG is further organized
into the Credit Risk Management group, M a r k e t R i s k M a n a g e m e n t g r o u p , a n d
R e t a i l R i s k M a n a g e m e n t g r o u p a n d Operational Risk Management group. CAG is
further organized into the Credit Policies , RBI Inspection & Anti -Money Laundering Group
and the Internal Audit Group.
CREDIT RISK
Credit risk is the risk that a borrower is unable to meet its financial obligations to the lender. Bank
measure, monitor and manage credit risk for each borrower and also at the portfolio level. Bank has
standardized credit-approval processes, which include a well-established procedure for comprehensive
credit appraisal and rating. ICICI Bank has well developed internal credit rating methodologies fo r
rating obligors. The rating factors in quantitative, qualitative issues and credit
enhancement features specific to the transaction. The rating serves as a key input in the approval
as well as post-approval credit processes.
Indust ryknowledge is cons tant ly updated through f ield vis i t s and interact ions
with clients, regulatory bodies and industry experts. In retail credit operations, the Board or a Board
Committee approves all products, policies and authorizations Credit approval authority lies only
with the credit officers who are distinct from
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the sales team. Credit scoring models are used in the case of certain products like credit cards.
External agencies such as field investigation
agenciesand credit processing agencies are used to facilitate a comprehensive
due diligence process including visits to offices and homes in the case of loans to individual
borrowers.
MARKET RISK
Market risk is the risk of loss resulting from changes in interest rates, foreign currency exchange
rates, equity prices and commodity prices. The objective of market risk management is to
minimize the impact of losses on earnings and equity capital due to market risk. Market risk
policies include the Investment Policy and the Asset-Liabil ity Management (ALM) Pol icy.
The policies are approved by the Board of Directors. The Asset Liability Management Committee
(ALCO) of the Board of Directors stipulate liquidity and
interestrate risk limits, monitors adherence to limits, articulates the organisationsintere
s t rate view and determines the s t rategy in l ight of the current andexpected envi
ronment. These policies and processes are articulated in theALPM policy. The
investment policy addresses issues related to investment in various trading products. RMG exercises
independent control over the
processo f m a r k e t r i s k m a n a g e m e n t a n d r e c o m m e n d s c h a n g e s i n p r o c e s
s a n d methodologies for measuring market risk Interest rate risk is measured
throughthe use of repricing gap analysis and duration analysis . Liquidity r isk ism
easure d thro ugh gap a nalysi s . Ban ks ens ure ad equat e l iqu idit y at al l t imethrough
systematic funds planning and maintenance of liquid investment as well as focusing on more stable funding
sitsces such as retail deposits. ICICI Bank limit exposure to exchange rate risk by stipulating
position limits. The treasury Middle Office Group monitors the asset-liability position
underthe supervisionof the ALC O. The Tre asu ry Mid dle Offi ce Grou p is als o resp on
s ib le f or p r o c e s s i n g t r e a s u r y t r a n s a c t i o n s , t r a c k i n g t h e d a i l y f u n d s p o s i t i
on andcomplying with al l t reasury related management and regulatory report ing
requirements.
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OPREATIONAL RISK
Operational risk is the risk of loss that can result from a variety of factors,
i n c l u d i n g f a i l u r e t o o b t a i n p r o p e r i n t e r n a l a u t h o r i z a t i o n s , i m p r o p e r l y do c
umented t ransact ions , fai lure of operat ional and informat ion secur i ty procedu res
, com put er sys tems , soft war e or equ ipm ent , frau d, in ade qua tetraining and employee
errors. Banks approach to operational riskmanagements designed to mitigate operational risk by
maintaining comprehensive
systemof internal controls, e s t a b l i s h i n g s y s t e m s a n d p r o c e d u r e s t o m o n i t o r
transactions, maintaining key back-up p rocedures and undertaking regular contingency
planning. Effect ive opera tio nal risk management sys tem would ensure that bank has sufficient
information to make appropriate decisions about additional controls, adjustments to controls, or other risk responses.
Operational risk management policy aims at minimizing losses and customer dissatisfaction due to
failure in processes, focusing on flaws in products and their design that can expose the bank to losses
due to fraud, analyzing the impact of failures in systems, developing mitigants to minimize the
impact and developing plans to
meet external shocks that can adversely impact cont inui ty in the banks operations.
SUBSIDIARY COMPANIES
DOMESTIC SUBSIDIARIES
ICICI Home Finance Company Limited
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ICICI Investment Management Company Limited
ICICI Lombard General Insurance Company Limited
ICICI Prudential Life Insurance Company Limited
ICICI Securities Limited
ICICI Trusteeship Services Limited
ICICI Venture Funds Management Company Limited
ICICI Securities Primary Dealership Limited
ICICI Prudential Asset Management Company Limited
ICICI Prudential Trust Limited
INTERNATIONAL SUSIDIARIES
ICICI Bank Canada
ICICI Bank Eurasia Limited Liability Company
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ICICI International Limited
ICICI Securities Holding Inc
ICICI Securities Inc
ICICI Bank Uk Limited
ICICI PRUDENTIAL INSURANCE COMPANY
ICICI Life continued to maintain its market leadership among private sector life insurance companies with a
market share of 12.71% on the basis of weighted received premium. Life insurance companies
worldwide make losses in the initial years, in view of business set-up and customer
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acquisition costs in the
ini t ial years as wel l as reserving for actuar ial l iabi l i ty . W hi le the growingoperat
ions of ICICI Life had a negat ive impact of Rs . 10.31 bi l l ion on t he Banks
consolidated profit after tax in FY2008 on account of the above reasons, the companys unaudited New
Business Achieved Profit (NBAP) for FY2008was Rs. 12.54 billion as compared to Rs. 8.81 billion in fiscal
2007.
ICICI LOMBARD GENERAL INSURANCE COMPANY
ICICI Lombard General Insurance Company (ICICI General) enhanced itsleadership
position with a market share of about 29.8% among private sector general insurance companies and an
overall market share of about 11.9% during fiscal 2008. ICICI Generals gross written premium
grew by 11 .4% from Rs.30.03 billion in fiscal 2007 to Rs. 33.45 billion in fiscal 2008. ICICI
General is required to expense upfront, on origination of a policy, all sitscing expenses
related to the policy. While ICICI Generals profit after tax for Rs. 1.03 billion in fiscal 2008, a growth
of 50.5% over fiscal 2007.The combined ratio is the sum o f net claims and expenses as a
per cen tag e o f pr emi ums and ind ica tes the surplus generated on an annualized basis
from the business writ ten dur ing a period (excluding investment income).
ICICI PRUDENTIAL AMC & TRUST
ICICI Prudential Asset Management Company (ICICI AMC) was the
secondl a r g e s t a s s e t m a n a g e m e n t c o m p a n y i n I n d i a w i t h a v e r a g e a s s e t s u n
der management of Rs. 543.55 billion for March 2008. ICICI AMC achieved a profit after
tax of Rs. 0.82 billion in fiscal 2008, a growth of 69.7% over fiscal2007.
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ICICI SECURITIES LIMITED
The securities and primary dealership business of the ICICI group have been
reorganised. ICICI Securities Limited has been renamed as ICICI
Securi t iesPrimary Dealership Limited. ICICI Brokerage Services Limited has bee
nrenamed as ICICI Securities Limited and has become a dir ect subsidiary of ICICI Bank.
ICICI Securities achieved a profit after tax of Rs. 1.50 billion and ICICI Securities Primary
Dealership achieved a pro fit after tax of Rs. 1.40 billion, in fiscal 2008.
ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED
ICICI Venture Funds Management Company Limited ( ICICI Venture) s t rengthened i t s leadership pos i t ion in pr ivate equi ty in India, wi th funds under
man ag em en t of ab ou t R s. 95.50 billion at year-end fiscal 2008. ICICI Venture
achieved a profit after tax of Rs. 0.90 billion in fiscal 2008 compared to Rs. 0.70 billion in
fiscal 2007
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Awards in the Year 2011:
ICICI Bank was ranked 12th in the list of 500 largest companies by Fortune India. The Bank was
also ranked 18th in Twitter and 17th in Linked in list of India's top 25 companies leveraging socialmedia by Fortune India
Ms. Chanda Kochhar, Managing Director & CEO, received the "Corporate Social Responsibility
Award", at the 10th Asia Business Leaders Awards (ABLA) by CNBC
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ICICI Bank awarded "House Of The Year (India)", by Asia Risk magazine, for eighth time in a row
since 2004
For second year in a row, ICICI Bank was awarded the "Most Tech-Friendly Bank", by Business
world
Mr. N. Vaghul, Former Chairman, ICICI Bank, received the "Lifetime Achievement Award", by
Business world
TOOLS & ANALYSIS
Ratio Analysis
1)Liquidity Ratio
Current Ratio = Current Asset
Current Liability
2)Turn Over Ratio
Fixed Asset Turn Over Ratio = Net Sale
F.A
Total Asset Turn Over Ratio = Net Sales
Total Assets
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3)Leverage Ratio
Debt to Asset Ratio = Total Debt
Total Assets
Debt to Equity = Total Debt
Net Worth
Interest Coverage ratio = EBIT
Interest
4)Profitability Ratio
Net Profit Ratio = PAT X 100
Sales
Returns on Assets = Net Income X 100
Total Assets
Return on Equity = Net Income
Net worth
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5)Valuation Ratio Book Value of share = Net worth
No. of Equity Share
6)Intrinsic Value of Share = P/E ratio over the Years X EPS
Balance Sheet
Balance Sheet of ICICI Bank ------------------- in Rs. Cr. -------------------
Mar '11 Mar '10 Mar '09 Mar '08 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Capital and Liabilities:
Total Share Capital 1,151.82 1,114.89 1,463.29 1,462.68 1,249Equity Share Capital 1,151.82 1,114.89 1,113.29 1,112.68 899
Share Application Money 0.29 0.00 0.00 0.00 0
Preference Share Capital 0.00 0.00 350.00 350.00 350
Reserves 53,938.82 50,503.48 48,419.73 45,357.53 23,413
Revaluation Reserves 0.00 0.00 0.00 0.00 0
Net Worth 55,090.93 51,618.37 49,883.02 46,820.21 24,663
Deposits 225,602.11 202,016.60 218,347.82 244,431.05 230,510
Borrowings 109,554.28 94,263.57 67,323.69 65,648.43 51,256
Total Debt 335,156.39 296,280.17 285,671.51 310,079.48 281,766
Other Liabilities & Provisions 15,986.35 15,501.18 43,746.43 42,895.39 38,228
Total Liabilities 406,233.67 363,399.72 379,300.96 399,795.08 344,658
Mar '11 Mar '10 Mar '09 Mar '08 Mar
12 mths 12 mths 12 mths 12 mths 12 m
Assets
Cash & Balances with RBI 20,906.97 27,514.29 17,536.33 29,377.53 18,706
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Balance with Banks, Money at Call 13,183.11 11,359.40 12,430.23 8,663.60 18,414
Advances 216,365.90 181,205.60 218,310.85 225,616.08 195,865
Investments 134,685.96 120,892.80 103,058.31 111,454.34 91,257
Gross Block 9,107.47 7,114.12 7,443.71 7,036.00 6,298
Accumulated Depreciation 4,363.21 3,901.43 3,642.09 2,927.11 2,375
Net Block 4,744.26 3,212.69 3,801.62 4,108.89 3,923Capital Work In Progress 0.00 0.00 0.00 0.00 189
Other Assets 16,347.47 19,214.93 24,163.62 20,574.63 16,300
Total Assets 406,233.67 363,399.71 379,300.96 399,795.07 344,658
Contingent Liabilities 883,774.77 694,948.84 803,991.92 371,737.36 177,054
Bills for collection 47,864.06 38,597.36 36,678.71 29,377.55 22,717
Book Value (Rs) 478.31 463.01 444.94 417.64 270
Profit & Loss A/c
Profit & Loss account of ICICI Bank ------------------- in Rs. Cr. -------------------
Mar '11 Mar '10 Mar '09 Mar '08 Ma
12 mths 12 mths 12 mths 12 mths 12
Income
Interest Earned 25,974.05 25,706.93 31,092.55 30,788.34 22,99
Other Income 7,108.91 7,292.43 8,117.76 8,878.85 6,96Total Income 33,082.96 32,999.36 39,210.31 39,667.19 29,95
Expenditure
Interest expended 16,957.15 17,592.57 22,725.93 23,484.24 16,35
Employee Cost 2,816.93 1,925.79 1,971.70 2,078.90 1,61
Selling and Admin Expenses 3,785.13 6,056.48 5,977.72 5,834.95 4,90
Depreciation 562.44 619.50 678.60 578.35 54
Miscellaneous Expenses 3,809.93 2,780.03 4,098.22 3,533.03 3,42
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00
Operating Expenses 8,594.16 10,221.99 10,795.14 10,855.18 8,84
Provisions & Contingencies 2,380.27 1,159.81 1,931.10 1,170.05 1,63
Total Expenses 27,931.58 28,974.37 35,452.17 35,509.47 26,84
Mar '11 Mar '10 Mar '09 Mar '08 Ma
12 mths 12 mths 12 mths 12 mths 12
Net Profit for the Year 5,151.38 4,024.98 3,758.13 4,157.73 3,11
Extraordionary Items -2.17 -0.09 -0.58 0.00
Profit brought forward 3,464.38 2,809.65 2,436.32 998.27 29
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Total 8,613.59 6,834.54 6,193.87 5,156.00 3,40
Preference Dividend 0.00 0.00 0.00 0.00
Equity Dividend 1,612.58 1,337.86 1,224.58 1,227.70 90
Corporate Dividend Tax 202.28 164.04 151.21 149.67 15
Per share data (annualised)
Earning Per Share (Rs) 44.73 36.10 33.76 37.37 3
Equity Dividend (%) 140.00 120.00 110.00 110.00 10
Book Value (Rs) 478.31 463.01 444.94 417.64 27
Appropriations
Transfer to Statutory Reserves 1,780.29 1,867.22 2,008.42 1,342.31 1,35
Transfer to Other Reserves 0.26 1.04 0.01 0.01
Proposed Dividend/Transfer to Govt 1,814.86 1,501.90 1,375.79 1,377.37 1,05
Balance c/f to Balance Sheet 5,018.18 3,464.38 2,809.65 2,436.32 99
Total 8,613.59 6,834.54 6,193.87 5,156.01 3,40
Yearly Results
Yearly Results of ICICI Bank ------------------- in Rs. Cr. -------------------
Mar '11 Mar '10 Mar '09 Mar '08
Sales Turnover 25,974.05 25,706.93 31,092.55 30,788.34 22
Other Income 6,647.90 7,477.65 7,603.72 8,810.77 5
Total Income 32,621.95 33,184.58 38,696.27 39,599.11 28
Total Expenses 8,904.09 10,246.69 10,853.37 11,058.77 8
Operating Profit 17,069.96 15,460.24 20,239.18 19,729.57 14
Profit On Sale Of Assets -- -- -- -- Profit On Sale Of Investments -- -- -- --
Gain/Loss On Foreign Exchange -- -- -- --
VRS Adjustment -- -- -- --
Other Extraordinary Income/Expenses -- -- -- --
Total Extraordinary Income/Expenses -- -- -- --
Tax On Extraordinary Items -- -- -- --
Net Extra Ordinary Income/Expenses -- -- -- --
Gross Profit 23,717.86 22,937.89 27,842.90 28,540.34 20
Interest 16,957.15 17,592.57 22,725.93 23,484.24 16
PBDT 6,760.71 5,345.32 5,116.97 5,056.10 3
Depreciation -- -- -- --
Depreciation On Revaluation Of Assets -- -- -- --
PBT 6,760.71 5,345.32 5,116.97 5,056.10 3
Tax 1,609.33 1,320.34 1,358.84 898.37
Net Profit 5,151.38 4,024.98 3,758.13 4,157.73 3
Prior Years Income/Expenses -- -- -- --
Depreciation for Previous Years Written Back/Provided
-- -- -- --
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Dividend -- -- -- --
Dividend Tax -- -- -- --
Dividend (%) -- -- -- --
Earnings Per Share 44.72 36.10 33.76 37.37
Book Value -- -- -- --
Equity 1,151.82 1,114.89 1,113.29 1,112.68
Reserves 53,938.83 50,503.48 48,419.73 45,357.53 23
Face Value 10.00 10.00 10.00 10.00
Liquidity Ratio
Current Ratio = Current AssetCurrent Liability
Table
Particulars/Year 2007 2008 2009 2010 2011
Current Assets 37121.33 38041.13 29966.56 38873.69 34090.08
Current Liabilities 51256.03 65648.43 67323.69 94263.57 109554.28
Ratio 0.724 0.579 0.445 0.412 0.311
Table No:
2004 2006 2008 2010 2012
1
2
3
4
5
2007
2008
2009
2010
2011
0.724
0.579
0.445
0.412
0.311
Year
Ratio
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Interpretation: Current Ratio shows the ability of the companys payback ability, the higher the
current ratio more capable is the company to payback its short term liabilities. The above graph
shows that the companys ability to payback has come down gradually.
Turn Over Ratio
Fixed Asset Turn Over Ratio = Net Sale
F.A
0 500 1000 1500 2000 2500
1
2
3
4
5
2007
2008
2009
2010
2011
1.223
1.215
1.225
1.303
1.398
Ratio
Year
Particulars/Year 2007 2008 2009 2010 2011
Net Sales 22994.29 30788.34 31092.55 25706.93 25974.05
Fixed Assets 325951.23 370417.54 361764.63 335885.42 385326.7
Ratio 0.070 0.083 0.085 0.076 0.067
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Interpretation: This ratio helps to measure the ability to generate the net sales by investing in fixed
asset, higher the ratio more capable is the company to generate the net sales. From the above graph it
can be observed that the company has a fluctuating ratio which means its efficiency is varying.
Total Asset Turn Over Ratio = Net Sales
Total Assets
0 1000 2000 3000
1
2
3
4
5
2007
2008
2009
2010
2011
1.223
1.215
1.225
1.303
1.398
Ratio
Year
Particulars/Year 2007 2008 2009 2010 2011
Net Sales 22994.29 30788.34 31092.55 25706.93 25974.05
Total Assets 344658.11 399795.07 379300.96 363399.71 406233.67
Ratio 0.066 0.077 0.081 0.070 0.063
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Interpretation: This ratio measures the firms efficiency to use the assets in generating sales
companies with low profit margins tend to have high asset turnover, while those with high profit
margins have low asset turnover from the above graph it can be observed that the company has
performed well in the year 2009 and rest of the years its fluctuating.
Leverage Ratio
Debt to Asset Ratio = Total Debt
Total Assets
Particulars/Year 2007 2008 2009 2010 2011
Total Debt 281766.22 310079.48 285671.51 296280.17 335156.39
Total Assets 344658.11 399795.07 379300.96 363399.71 406233.67
Ratio 0.817 0.775 0.753 0.815 0.825
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Interpretation: This ratio is used to measure a company's financial risk by determining how much
of the company's assets have been financed by debt. By the above calculation it can be noted that the
ratio is fluctuating, higher the ratio more is the company having debt. The company was good
enough in the year 2008 and 2009.
Debt to Equity = Total Debt
Net Worth
0 500 1000 1500 2000 2500
1
2
3
4
5
2007
2008
2009
2010
2011
1.223
1.215
1.225
1.303
1.398
Ratio
Year
Particulars/Year 2007 2008 2009 2010 2011
Total Debt 281766.22 310079.48 285671.51 296280.17 335156.39
Net Worth 24663.26 46820.21 49883.02 51618.37 55090.93
Ratio 11.424 6.622 5.726 5.739 6.083
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Interpretation: It indicates what proportion of equity and debt the company is using to finance its
assets. A high debt/equity ratio generally means that a company has been aggressive in financing its
growth with debt. The ideal ratio for this is more than 5, from the above observation it can be noted
that the company had a good result in the year 2007 and it gradually went on decreasing, but in the
year 2011 its in a uptrend.
Interest Coverage ratio = EBIT
Interest
2004 2006 2008 2010 2012 2014
1
2
3
4
5
2007
2008
2009
2010
2011
1.223
1.215
1.225
1.303
1.398
Year
Ratio
Particulars/Year 2007 2008 2009 2010 2011
EBIT 20006.54 28540.34 27842.90 22937.89 23717.86
Interest 16358.50 23484.24 22785.93 17592.57 16957.15
Ratio 1.223 1.215 1.225 1.303 1.398
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Interpretation: This ratio is used to determine how easily a company can pay interest on
outstanding debt. The lower the ratio, the more the company is burdened by debt expense. When a
company's interest coverage ratio is below 1 the company is not generating sufficient revenues to
satisfy interest expenses. From the graph it can be noted that the company is generating sufficient
revenues and it is improving year on year.
Profitability Ratio
Net Profit Ratio = PAT X 100
Sales
2004 2006 2008 2010 2012 2014
1
2
3
4
5
2007
2008
2009
2010
2011
1.223
1.215
1.225
1.303
1.398
Year
Ratio
Particulars/Year 2007 2008 2009 2010 2011
PAT 3110.22 4157.73 3758.13 4024.98 5151.38
Sales 22994.29 30788.34 31092.55 25706.93 25974.05
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Interpretation:This ratio measures the managements ability to operate the business with sufficient
success and to leave a margin of reasonable compensation to the owners. Higher the net profit
margin, adequate is the return to the owners, from the above graph it can be seen that it has a gradual
increase in all the years except in the year 2009.
Returns on Assets = Net Income X 100
Total Assets
2007
2008
2009
2010
2011
274.237
420.787
448.068
462.99
478.294
0 500 1000 1500 2000 2500
1
2
3
4
5
Ratio
Year
Ratio 13.526 13.504 12.086 15.657 19.832
Particulars/Year 2007 2008 2009 2010 2011
Net Income 28923.46 39599.11 38696.27 33184.58 32621.95
Total Assets 344658.11 399795.07 379300.96 363399.71 406233.67
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Interpretation: This ratio used to compare a businesss performance among other industry
members, the higher the ratio, the more cash the company has available for reintegration into the
company, whether it be in upgrades, replacements or other areas. The study reveals that the company
had a good returns on asset ratio in the year 2009 but in general its fluctuating.
Return on Equity = Net Income
Net worth
2007
2008
2009
2010
2011
274.237
420.787
448.068
462.99
478.294
0 1000 2000 3000
1
2
3
4
5
Year
Ratio
Ratio 8.391 9.904 10.201 9.131 8.030
Particulars/Year 2007 2008 2009 2010 2011
Net Income 28923.46 39599.11 38696.27 33184.58 32621.95
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Interpretation: Return on equity measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have invested. The graph shows tha
the company was much profitable in the year 2007 and less in the year 2011 with the shareholders
money.
7)Valuation Ratio Book Value of share = Net worth
No. of Equity Shares
0 500 1000 1500 2000 2500
1
2
3
4
5
2007
2008
2009
2010
2011
274.237
420.787
448.068
462.99
478.294
Year
Ratio
Net Worth 24663.26 46820.21 49883.02 51618.37 55090.93
Ratio 1.172 0.845 0.775 0.642 0.592
Particulars/Year 2007 2008 2009 2010 2011
Net Worth 24663.26 46820.21 49883.02 51618.37 55090.93
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Interpretation: By the above graph we can understand that the ratio has increased year on year and
a positive sign to the company.
8)Intrinsic Value of Share = P/E ratio over the Years X EPS
Year P/E Ratio
2007 270.37
2008 417.64
2009 444.94
2007
2008
2009
2010
2011
274.237
420.787
448.068
462.99
478.294
0 500 1000 1500 2000 2500
1
2
3
4
5
Ratio
Year
No. of EquityShar 89.934 111.268 111.329 111.489 115.182
Ratio 274.237 420.787 448.068 462.990 478.294
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2010 463.01
2011 478.31
Interpretation: By the above graph it can be noted that the ratio has gradually increased every year
and a positive sign to the company.
Industry Analysis
INTRODUCTION TO THE STEEL INDUSTRY
Indias economic growth is contingent upon the growth of the Indian steel industry. Consumption
of steel is taken to be an indicator of economic development. While steel continues to have a
stronghold in traditional sectors such as construction, housing and ground transportation, special
2007
2008
2009
2010
2011
270.37
417.64
444.94
463.01
478.31
0 500 1000 1500 2000 2500
1
2
3
4
5
P/E Ratio
Year
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steels are increasingly used in engineering industries such as power generation, petrochemicals
and fertilisers. India occupies a central position on the global steel map, with the establishment of
new state-of-the-art steel mills, acquisition of global scale capacities by players, continuous
modernisation and upgradation of older plants, improving energy efficiency and backward
integration into global raw material sources.
Steel production in India has increased by a compounded annual growth rate (CAGR) of 8
percent over the period 2002-03 to 2006-07. Going forward, growth in India is projected to be
higher than the world average, as the per capita consumption of steel in India, at around 46 kg, is
well below the world average (150 kg) and that of developed countries (400 kg). Indian demand is
projected to rise to 200 million tonnes by 2015. Given the strong demand scenario, most global
steel players are into a massive capacity expansion mode, either through brownfield or greenfield
route. By 2012, the steel production capacity in India is expected to touch 124 million tonnes and
275 million tonnes by 2020. While greenfield projects are slated to add 28.7 million tonnes,
brownfield expansions are estimated to add 40.5 million tonnes to the existing capacity of 55
million tonnes.
Steel is manufactured as a globally tradable product with no major trade barriers across national
boundaries to be seen currently. There is also no inherent resource related constraints which
may significantly affect production of the same or its capacity creation to respond to demand
increases in the global market. Even the government policy restrictions have been negligible
worldwide and even if there are any the same to respond to specific conditions in the market and
have always been temporary. Therefore, the industry in general and at a global level is unlikely to
throw up substantive competition issues in any national policy framework. Further, there are no
natural monopoly characteristics in steel. Therefore, one may not expect complex competition
issues as those witnessed in industries like telecom, electricity, natural gas, oil, etc.
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This, however, does not mean that there is no relevant or serious competition issue in the steel
industry. The growing consolidation in the steel industry worldwide through mergers and
acquisitions has already thrown up several significant concerns. The fact that internationally steel
has always been an oligopolistic industry, sometimes has raised concerns about the anticompetitive
behavious of large firms that dominate this industry. On the other hand the set of
large firms that characterize the industry has been changing over time.
Trade and other government policies have significant bearing on competition issues. Matters of
subsidies, non-tariff barriers to trade, discriminatory customs duty (on exports and imports) etc.
may bring in significant distortions in the domestic market and in the process alter the competitive
positioning of individual players in the market. The specific role of the state in creating market
distortion and thereby the competitive conditions in the market is a well-known issue in this
country.
This report proceeds as follows. Section 2 of the report provides a brief over view of the
performance and structure of the Indian steel industry by analysing published secondary time
series data on certain key indicators. Market structure is analyzed using indicators such as
number of players and their respective shares in total production, share of public and private
players in the total production/sales, production capacity of major players, etc. Given the
heterogeneous nature of the product this analysis is done for the various segments of steel that
constitute the relevant market. This analysis is a precursor in identifying segments where
competition may be an issue of concern to allow for a pointed analysis. Section 3 of the report
documents policy and institutional structure governing the steel industry in India and the role
played by the Government in the development of this industry.
Section 4 of the report examines issues of competition of steel industry in India, by identifying the
structurally inherent and the market determined positions of various steel firms specifically to see
their market power, vis--vis both their final consumers as also those within the steel industry.
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production capacity, diversifying investments, and leveraging its core capabilities to venture
into new businesses. Jindal Steel and Power Limited is the third largeststeelproducer
inIndia. The company manufactures and sellssponge iron, mild steel slabs, ferro
chrome,iron ore, mild steel, structural, hot rolled plates and coils and coal based sponge iron
plant. The company is also involved inpower generation.
Jindal Steel and Power is a part of the Jindal Group, founded byO. P. Jindal(19302005). In
1969, he started Pipe Unit Jindal India Limited, one of the earlier incarnations of his business
empire. After Jindal's death in 2005, much of his assets were transferred to his wife, Savitri
Jindal. Jindal Group's management was then split among his four sons withNaveen Jindalas
the Managing Director of Jindal Steel and Power Limited. His elder brother,Sajjan Jindal, is
currently the head ofASSOCHAM, an influential body of the chambers of commerce, and
the head of JSW Group, part of O.P. Jindal Group.
The company produces economical and efficient steel and power through backward
integration from its captive coal and iron-ore mines. From the widest flat products to a whole
range of long products, JSPL today sports a product portfolio that caters to varied needs in
the steel market. The company also has the distinction of producing the worlds longest 121
metre rails and introducing large size parallel flange beams in India.
JSPL operates the largest coal - based sponge iron plant in the world and has an installed
capacity of 3 MTPA of steel at Raigarh in Chhattisgarh. With a 0.6 MTPA wire rod mill and
a one million tone capacity bar mill at Patratu, Jharkhand and a one million tone capacity bar
mill, Jharkhand and a medium and light structural mill at Raigarh, Chhattisgarh.
The enterprising spirit and the ability to discern future trends have been the driving force
behind the companys remarkable growth story. The company has scaled new heights with
the combined force of innovation, adaptation of new technology and the collective skills of
its 15,000 strong, committed workforce. And the recognition it has received only further
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GLOBAL COLLEGE OF MANAGEMENT & IT, HUBLI Page 46
lends credence to this. JSPL has recently been rated as the second highest value creator in the
world by Boston Consulting Group; 11th fastest growing company in India by Business
World; included in one of the Fab 50 Companies by Forbes Asia, 2009 and 2010.
JSPL endeavors to strengthen Indias industrial base by aiding infrastructural development,
through sustainable development approaches and inclusive growth. The company deploys its
resources to improve infrastructure, education, health, water, sanitation, environment etc. in
the areas it operates in. The company has won several awards for its innovative business
practices.
As JSPL contributes to Indias growth, it has also set in place a global expansion plan in
order to become one of the most prestigious and dynamic business groups in the World. The
company continues to capitalize on opportunities in high growth markets, expanding its core
areas and diversifying into new businesses. The future is studded with challenges and JSPL
is taking them on with vigor and courage.
On June 3, 2006,Boliviagranted development rights for one of the world's largestiron
orereserves in theEl Mutnregion to Jindal Steel. With the development rights for 20
billion tonne of El Mutun Iron Ore Reserves in Bolivia, JSPL plans to invest US$ 2.1 billion
in the next few years on mining and on setting up an integrated 1.7 MTPA Steel Plant, 6
MTPA Sponge Iron plant, 10 MTPA Iron Ore Pellet Plant and 450 MW power plant in theSouth American nation. Savitri Jindal, the widow of O. P. Jindal, is ranked as the 19th richest
Indian person according to Forbes.
VISION, MISSION AND VALUES
VISION
To be globally admired organization that enhances the quality of life of all stakeholders
through sustainable industrial and business development.
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MISSION
The spirit of entrepreneurship and innovation
Optimum utilization of resources.
Sustainable environment friendly procedures and practices
The highest ethics and standards.
Hiring, developing and retaining the best people.
Maximization returns to stakeholders.
Positive impact on the communities we touch.
VALUES
Passion for people.
Business excellence
Integrity, ownership and sense of belonging
Sustainable development
PRESENT MARKET POSITION OF JINDAL STEEL AND POWER LIMITED
Jindal Steel and Power Limited is the third largeststeelproducer in India. Operating profitdecreased 9.9% quarter-on-quarter to Rs9.6bn, marginally lower than our estimate of
Rs9.9bn.The underperformance in operating profit was on account of lower than expected
steel sales volume. Operating Profit Margin decreased 86bps quarter-on-quarter to 38% in
first quarter of financial year 2011 on account of higher coal cost and subdued long steel
prices. On a segmental basis, EBIT margins for the steel business increased from 31.1% in
fourth quarter of financial year 2011 to 31.8% in first quarter of financial year 2012 and that
of the power division declined sharply from 46.4% to 36.4%.
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