AN EMPIRICAL STUDY ON RETAIL SALES IN

INDIAN STEEL INDUSTRY

1. ABSTRACT

Steel industry plays a significant role in the country’s economic growth and forms the backbone of
every industrial economy. India’s economic growth is contingent upon the growth of the Indian Steel
Industry. Indian economy is in need of a device to boost employment opportunities, raise income and
its standards of living and to bring a more balanced and integrated economy. Steel industry is the best
solution for achieving all these goals. The prevailing capital for the promotion of steel industries and
the plentiful supply of labour largely favour the development of steel industries. Hence, this sector of
industry is playing a vital part in the economic structure in India. Steel finds its extensive application
right from construction, infrastructure, power, automobile, aerospace, transportation, industrial
applications and machinery to consumer products etc. Steel industry accounts for almost 2 percent of
India’s GDP.

Steel is crucial to the development of modern economy and is considered to be the main pillar of the
human civilization. The equivalent of steel production is one of the indicators of a country's economic
development. The condition of steel industry is the barometer of industrial health of the nation. The
level of per capita consumption of steel is treated as one of the important indicators of macroeconomics
development and living standard of the people in any country. "The per capita steel consumption in
India is at around 68 kg as against the world average of around 208 kg. It is very low”. The
Government has fixed a target to ramp up the country's crude steel production to 300 million tonnes by

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2030 -- from about 138 MT at the end of March 2018. The target for the per capita steel consumption is
160 kg by 2030. It is the product of a large and technologically complex industry having strong forward
and backward linkage effects which form the nucleus around which develops the various
interdependent sectors of its expanding economy. All the major industrial economics are characterized
by the presence of a strong steel industry and the growth of these economies has been largely shaped by
the strength of their steel industries in their preliminary stages of development.

The Indian steel sector has grown exponentially over the past few years to be the third largest producer
of steel and a major consumer of steel in the world. However, the steel sector is currently going through
very tough times with domestic supply greater than the demand, low capacity utilization, global
technology up-gradation, small steel mills, lack of adequate capital and high interest cost burden, debt,
cheap imports etc. The steel producers are also facing challenging financial times, reflected in negative
profit growth rates. As of March 2017, the steel industry accounts for almost 22 percent of the total debt
in India. Even though the India's National Steel Policy 2017 has formulated new policies, to be global
competitor, to overcome the issues and challenges that the Indian steel companies are facing, the
Government and the Indian Steel industry including public and private sectors need to consider these
issues seriously and the global situation to articulate a new direction for the steel industry to be the
global competitor.

2. INTRODUCTION

The development of steel and its use as an economic commodity, alongside iron, changed the
course of human history. In fact, the last stage of prehistoric times, the Iron Age, is named
thus because humans mastered the iron- and steel-making processes. This development
allowed societies to build tools and weapons, which speeded advancements in construction
and technology. Steel was responsible for another revolution in the 19th century: the
Industrial Revolution.
Today, in a high-tech world dominated by software and technological gadgets, this age-old
metal is still as reliable as ever. In fact, steel is resurging as advanced developing countries —

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China, India, and Brazil — barrel down a path toward rapid industrialization like the one the
West experienced in the 19th century. Steel, which is iron alloyed with other compounds
(usually carbon), is still the most widely produced metal in the world.

Why is Steel Valuable?

Steel is one of the most important metals used worldwide in the construction and engineering
industries. It is an alloy made up mostly of iron and containing smaller amounts of carbon,
manganese, silicon, phosphorus, sulfur and oxygen. Its relatively low cost and strong physical
properties make steel a popular choice for fabricating a wide variety of items. Consumer
durables such as refrigerators and washing machines use steel, as do items ranging from
cargo ships to buildings to surgical equipment.

Global steel production exceeds 1,600 million metric tons annually. Production is global, but it
has shifted dramatically over the past decades from Western countries to China. Chinese
producers now account for almost half of the global supply of steel. China dominates steel
production, with generous subsidies in place for its steel manufacturers. China now produces
three times more steel than Japan, the second-largest producer. The largest producing
countries include China, Japan, India, USA, Russia, South Korea, Germany, Turkey, Brazil and
Ukraine. Demand for steel has climbed steadily over the past few decades as emerging market
economies developed larger infrastructure needs. China uses 45% of annual steel production,
while other Asian nations use nearly 17%. The EU accounts for a little over 10% of annual steel
demand, and NAFTA countries comprise close to 9%.
(NAFTA - In 1994, The North American Free Trade Agreement is an agreement signed by
Canada, Mexico, and the United States, creating a trilateral trade bloc in North America.)

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6 Main Uses of Steel Uses of Steel Description

Construction and Infrastructure

Builders and engineers use steel to construct high-rise buildings, industrial sheds, residential
buildings, bridges, parking garages, rail lines and other structures. Construction and
infrastructure account for about half of the annual steel consumption globally.

Mechanical Equipment and Automotive Sector

Steel sheets are used in vehicle frames, hoods, doors, mufflers, bumpers and fuel tanks.
Specialty steel is used in engine parts, transmissions, and suspensions. These sectors account
for about 30% of annual steel demand.

Metal Products
This sector includes consumer goods such as refrigerators, washing machines, and air
conditioners and accounts for about 11% of annual steel demand.

Other Transport
This sector includes shipbuilding and trains and comprises 5% of annual global steel demand.

Electrical Equipment
This sector comprises about 3% of global steel demand and includes connector and
component brackets and other equipment.

Domestic Appliances
Knives, cookware and other small kitchen appliances use steel. This sector accounts for about
2% of annual demand.

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What Drives the Price of Steel?
Diverse industries all over the world use steel in their products. Therefore, the price of steel is
a good barometer for global economic strength. The following five areas represent important
specific determinants of steel prices:
1. Chinese Economy
2. Global Infrastructure Demand
3. Transportation Demand
4. Input Prices
5. Substitution Costs

Chinese Economy
China uses about half of the annual global supply of steel and, therefore, may be the biggest
determinant of steel prices. Double-digit growth in Chinese GDP over the past decade has
created robust demand for steel in office buildings, residential housing, infrastructure and
other types of construction. However, China is also a major exporter of steel. As its growth
trajectory has slowed, Chinese demand for steel has waned. Chinese producers have flooded
international markets with cheap steel exports and depressed prices. Ultimately, strong
internal Chinese demand generally creates higher steel prices, while weak demand leads to
oversupply on the global markets and lower prices. To a lesser extent, demand from other
emerging economies such as Brazil and India also impacts steel prices.

Global Infrastructure Demand

Construction and infrastructure represent a very large percentage of steel demand. Mature
economies including the United States are planning large-scale infrastructure projects to
replace crumbling bridges, airports and transportation systems. The demand for such large-
scale projects in major Western economies can drive steel prices higher.

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Transportation Demand
Demand for ships, trains, and cars impacts the price of steel. When the global economy is
strong, the need for ships to transport cargo grows. Similarly, a strong global economy creates
increased consumer demand for automobiles. Ultimately, the transportation sector is a very
reliable barometer for the overall economy, so economic strength helps the price of steel,
while economic weakness depresses it.

Input Prices
Scrap metal and iron ore are the two main materials used to produce steel. Emerging
economies China, Brazil and India provide much of the global supply of these materials, and
they also have large-scale steel production industries. The global availability and cost of these
materials may depend on the size of the domestic demand from these countries.
Energy costs are another important input cost of making steel since the heat needed to melt
iron ore is significant.

Substitution Costs
Advances in technology have produced strong composite materials that compete with steel.
Carbon fiber reinforced polymers, for example, have properties including strong strength-to-
weight ratios that make them suitable substitutes for steel in many applications. Further
improvements in composite technologies could lessen demand for steel.

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Steel being a key input to the country’s infrastructure sector, plays a major role in the growth of a
developing economy. The demand for the steel is mainly driven by construction, infrastructure and
automobile sectors. These three sectors together, account for over 75 percent of the total steel consumed
in the country. In India the steel sector contributes nearly 2 percent to the country's gross domestic
product (GDP) and employs over 0.6 million people. In 2015, India became the third largest producer
of crude steel as against its eighth position in 2003. The country is also the third largest consumer of
finished steel in the world after China and USA.

The modern steel industry in India started with the establishment of the TISCO (TATA IRON AND
STEEL COMPANY) in 1911. Before independence, India had only three steel plants jointly producing
a meagre 1.3 million tonnes of steel. Soon after independence, three major integrated steel plants were
built with the aim of industrialization and rapid economic growth in the country. Since then the Indian
steel industry has grown to become the third largest producer of crude steel in the world today.
However, steel industry operated in a favourable business environment in the first forty years of its
existence in independent India. It developed steadily in a protected environment. The industry was
under strict Government regulation. Setting up a steel industry required licenses from the Government.
There was strict control over imports. As a result there was hardly any competition. The production,
price and distribution were regulated. While the Government was the major purchaser, others had
difficulties in fulfilling their requirement of steel. The steel industry was in a totally seller's market.

Source : World Steel Association

Fig 1 : World Crude Steel Production

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The growth of steel sector between 2003-04 and 2007-08 was remarkable. During this period the
production and consumption grew at a Compounded Annual Growth Rate (CAGR) of 8.3 percent and
12 percent respectively. With the consumption over taking production, India became the net importer of
steel during this period. However, during the last five years, the performance of the Indian steel sector
was in the doldrums. The supply of steel has been more than the demand and yet India has largely
remained a net importer of steel (except 2013-14). In 2014-15, imports increased by over 71 percent,
primarily due to sharper fall in International steel prices than domestic prices. Further, fall in Chinese
steel consumption along with still significant production growth has led to increase in exports from
China, putting pressure on steel prices in India and globally. Due to this, the profits of the steel
companies have declined rapidly in nominal terms and have experienced huge losses. A number of big
players like SAIL, RINL, JSW Steel, TATA Steel, ESSAR Steel, JSPL, Bhushan Steels, Bhushan Power
and Steels, Uttam Galva Steels Ltd and Uttam Value Steels Ltd etc are also resorting to debt
restructuring with a growing incidence of Non-Performing Assets (NPA).

The financial structure of Indian steel industry is mainly composed of two modes of financing; Equity
and Debt, where equity represents owner’s fund and debt comprises of borrowings from banks in the
forms of loans, debentures, securities from foreign institutional investors, commercial papers and
certificates of deposit. The choice of source of finance depends upon the company’s position besides
purpose of acquisition and allocation of funds. Debt financing has become a commonly used source of
finance by the companies in the Indian steel industry especially through banks. The time period ranging
from 2010 to 2017 has observed extensive debt procurement by the largest Indian steel industry. Also
excess production from China has adversely affected the prices of steel in the Indian steel industry
hence the growth of the sector. As per the report of Investment Bank Credit Suisse the total debt of
major steel industries is around $15 billion which is 15 times higher than their collective operating
profit. Increasing debt of the Indian steel industry has direct impact on the Indian banking sector as
banks are the major lenders. The declining profits which are already in pressure to clear of their Non-
Performing Assets.

In order to protect the Indian domestic steel industry, the Government has taken various steps such as
imposition of safeguard duty of 20 percent in March 2016 on hot-rolled flat products, imposed an anti-

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dumping duty for five years on imports of certain variety of hot-rolled flat products from China, Korea
and Malaysia. The Government has also imposed anti-dumping duty on imports of cold-rolled flat
products originating in or exported from China, Korea, European Union, South Africa, Taiwan,
Thailand and USA.

The steel industry is set to flourish, no doubt, but there are Government inefficiencies that force
companies to abandon their projects or leave the country. Global producers like ArcelorMittal, the
world’s largest producer of steel and Korean company POSCO Steel, JSW Steel Ltd which is India’s
largest steel producer in private sector were keen on setting up steel plants in Karnataka, Odisha and
Jharkhand during the period 2006 to 2010 and they also had signed an agreement with the state
Governments to set up steel plants with total capacity of 40 million metric tonnes of steel on an annual
basis which would have created more employments, directly and indirectly. However, even after 10-
years, these companies were neither given land nor allocated captive iron ore blocks. These companies
faced lot of difficulties in getting environmental clearances and also due to bureaucratic delays, which
eventually led to the closure of these deals. So, for the Indian steel industry to flourish, it is important
for the Government to take steps to make the Indian business environment viable for the investors. The
Government is working hard to attract investors to India to boost the economic growth of the
country. One way in which it is doing so is by increasing the foreign direct investment cap. Apart from
that, the Government should make its procedures more efficient, fast and transparent.

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 Source : India Ratings and Research, Mint Research
Fig 2 : Indian Steel Producers and Stressed Steel Assets, as on 2018

According to the World Steel Association (WSA), India is expected to be one of the fastest growing
markets in steel usage in the coming years. The demand for steel will surge with a revival in the
economy. The re-opening of mines in Karnataka and Goa will boost the steel production in the country.
With the imposition of tariff barriers the steel imports will further fall and alleviate pricing pressures in
the coming months. Moreover, with the Government's thrust on starting stalled projects followed by the
large infrastructure projects coming up in the country, it is expected that the demand for steel will pick
up surely. However, unless and until prompt measures are taken for debt relief and for improving the
profitability of the industry, there maybe several cases of bankruptcies which is making it difficult to
meet the demand for steel as the economy recovers.

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 3. REVIEW OF LITERATURE

In order to have proper insight into the various aspects of the Indian steel industry under the study, it will
be useful and imperative to review the studies conducted in the past. Till now, many studies have been
conducted on the different aspects to measuring the financial efficiency and financial performance of
public and private sectors in India. But it has been rarely tried to work on the problems of these
undertakings and suggested for taking out the one or two or some other aspects of finance or focus on
other industry. There is wide range of literature available on financial efficiency, financial performance,
analysis of different companies in conforming to its dynamic value and significance of intuitive nature.
A good dealing in analytical part of literature exists at broad levels like size and technology, problem
associated with productivity, financial efficiency, and capacity utilization.

Some of them have traced and analyzed the transition of the Indian steel industry from the pre-
independence era to the twenty-first century (Chatterjee, 2009), while others have examined the
productivity aspect (Mohanan and Varughese, 2009). There are also studies on foreign direct investment
in steel sector (Kumar and Chadha, 2009).

Industry experts have also studied the issue of paucity of suitably trained workforce as a constraint for
the expansion of the Indian steel sector. It has been pointed out that a situation might arise whereby it
could become a case of “steel plants, steel plants everywhere and no one to run them” (Chatterjee,
2009).

Romer (1990) suggested that the technological change is an important factor to contribute output
growth. Technological change happen because of intentional actions taken by human beings who
respond to market incentives.

Burange and Yamini (2008) studied on the performance of Indian iron and steel industry and
competitiveness of the firms. The paper examined the performance of Indian iron and steel industry in
the pre and post-liberalization periods in terms of primary indicators such as production, consumption
and foreign trade. It also studies growth in capacity utilization, prices and employment. It is deduced

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that the industry has grown manifold in all the aspects, especially after the liberalization of the economy
except employment, which showed a substantial fall during post-liberalization when competition among
the Indian manufacturing firms has increased. Therefore, that leads us to investigate the competitiveness
of the sample firms in the industry through composite competitiveness indices. On the basis of overall
competitiveness, as well as financial and non-financial aspects of competitiveness, the industry was
mostly dominated by TATA Steel Ltd., even though SAIL had a greater market share and proved to be
superior with respect to non-financial indicators.

Athreya and Kapur (1999) studied the linkage between the policy towards foreign capital and its
contribution to the Indian economy. In 1980s, the policies of India were changed to attract foreign
investment but there was only a slight increase and most part, Indian industry came to rely on foreign
debt capital to meet its foreign exchange needs.

Majumdar (1996) studied the pattern of productivity growth of Indian industrial sector. The study
concluded that the positive impact of liberalization has an impact on productivity. The adoption of
technological and organizational innovations had a very large impact on productivity at the firm level.

Sahoo et al., (1999) used panel data on inputs and output of 60 companies of the Indian steel industry
during 1989-1996. A single output (gross value added) and two inputs (labour and capital) were
considered. They used both frontier translog production function and the DEA models to the data and
both models reached the same conclusion that, variable returns to scale (VRS) operate in the industry.

Sinha and Ghoshal (1999) discussed the importance of service quality to maintain competitiveness in the
changing market, where, many suppliers have come into operation. The services in steel sector could be
two fold – people based and equipment based. Delivery and after sales service are examples of people-
based services whereas shaping pre-forming of steel like cutting, shearing, etc., are examples for the
latter.

Sivakumar (2012) estimated the growth of Indian steel industry over a period of 1997-1998 to 2006-
2007. The paper also focused on sales efficiency (PAT) and observed a declining trend for the steel
industries considered for the study.

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Kolluru (2005) investigated a study on performance of Indian steel companies during 1999-2003. The
objective of this study was to measure an overall index of performance across the Indian steel companies
based on eleven financial ratios including the profit ratio for each company by using the globally
popular method – the Taxonomic Method. The empirical results showed that, overall composite index
would serve as a better performance indicator than the conventional stand-alone operating profit margin.

Barad (2010) in his thesis “A Study on Liquidity Management of Indian Steel Industry” dealt with the
Analysis on liquidity of steel industry in India, which were mainly engaged in production of steel
Products. The study aimed at exploring analysis of liquidity performance of steel industry in India. The
study covered a period of 10 years i.e. from 1999-2000 to 2008-2009. Four companies JSWSL, JS&AL,
SAIL and TSL were selected for the study. In order to analyze the liquidity performance six types of
ratios were calculated i.e. current ratio, quick ratio and inventory turnover ratio, working capital
turnover ratio, debtor turnover ratio and average collection period. To test the hypothesis the one way
ANOVA was used. The analysis describes that the need for liquidity to run day-to-day business activities
can’t be over emphasized.

Patra (2005) analyzed the impact of liquidity on profitability in his study considering the case TATA
Iron and Steel Company Limited. The study of the impact of liquidity ratios on profitability showed both
negative and positive association. Out of seven liquidity ratios selected for this study, four ratios namely
current ratio, acid test ratio, current assets to total assets ratio and inventory turnover ratio showed
negative correlation with profitability ratio. However, these correlation co-efficient were not statistically
significant. The remaining three ratios namely working capital turnover ratio, receivable turnover ratio
and cash turnover ratio have shown positive association with the profitability ratio, all which are
statistically significant at 5 per cent level of significance. The result of all the correlation co-efficient
was as desirable except correlation co-efficient between inventory turnover ratio and ROI. However this
undesirable sign between ITR and ROI was not supported by the multiple regression analysis, which
showed the positive association between these two variables. There is increasing profitability which
depends upon many factors including liquidity.

Pal (2012) studied a comparative study of financial performance of Indian steel companies under

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globalization. The purpose of the study was to examine the financial performance of the Indian steel
companies and establish the linear relationship between liquidity, leverage, efficiency and profitability
of the selected companies. Indian steel companies are selected for the study on the basis of market share
in 2008-09 for a period of twenty years ranging from 1991-92 to 2010-2011. The public sector company
Steel Authority of India is holding the highest market share followed by TATA Steel Limited, JSW Steel
Limited, Essar Steel Limited, JSW Ispat and Steel Limited, Rastriya Ispat Nigam Limited, Jindal Steel
and Power Limited, Bhushan Steel Limited, Llyods Steel Industries Limited and National Steel and
Agro Industries Limited. To estimate the impact of selected variables on the profitability multiple
regression analysis was carried on and the models were predicted for such purpose.

Chavali and Karthika (2012) conducted a study on application of Z-score analysis in evaluating steel
industry in India. The purpose of this paper is an empirical study to understand the financial soundness
of steel industry in India. For this purpose twenty large and medium steel units which are listed are
taken. A sample period of 2001-2010 was selected for the study. The financial performance of the Steel
industry was monitored and measured by using Altman’s Z-score model which was extensively used by
practitioners and researchers in the past. This study analyses the possibility of business failure with
reasonable accuracy by using the Z-score model. The research findings are that the steel industry was in
good financial performance in spite of the impact of sluggish demand and global economic slowdown
with an exception of two companies in the study period.

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 4. OBJECTIVES

The following are the main objectives this proposed research work :-
1) To examine whether there has been a transformation from sellers market to buyers market in the
steel industry.
2) To find out the Retail Marketing strategy with context to Indian market to increase the profitability
in Indian Steel industry.

5. SCOPE OF THE STUDY

The review of literature presented in the preceding part of discussion testifies that many studies have
been conducted in the past on financial aspects, profitability and liquidity on both public and private
sectors, but overall study on financial efficiency of steel industry and future growth for the steel
industry required strategy is not focused till date. A study on financial performance or profitability and
liquidity of the organizational study is also conducted but no study seems to be conducted on financial
efficiency of steel industry after the downturn. In the present scenario where the business world has
become highly competitive, and there is a slow recession in the world economy. Each and every sectors
growth is highly depends on the performance of steel industry. The performance of steel industry is
highly impacted on the performance of other industry like Automobile, Construction, Heavy tools and
equipment, Aviation, Power, and etc.,. Time has come when the revival of these undertakings has
become imperative and for making them competitive. Government need to take some effective steps
accepting the fact that the present time is the time of change towards betterment. The pace, scope and
depth of changes taking place in the public sector are said to require a fundamental retaining of the
conceptual models or paradigms upon which public base accuracy have been built in the past. More
pragmatically, there is an insistence need to examine the relevance, worth and effectiveness of all
activities undertaken by the Government. In view of this, the present study intends to examine the
efficiency level of selected primary steel producers in Indian Steel Industry along with the global
competitiveness.

6.1 UNIVERSE OF THE SYUDY

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The universe of the study consists of all the limited steel companies working in India and listed in stock
exchanges of India. There are more than 735 such steel companies which are working in India as on
31st, March- 2012. Out of these 352 companies were listed in stock exchanges of India.

6.2 POPULATION OF THE STUDY

Out of 352 companies listed at stock exchange 13 companies are having more than 1000 Crores market
capital, this constitute the population of the study.

6.3 SAMPLING TECHNIQUE FOR THE STUDY

Out of 13 companies whose market capitalization is more than 1000 Crores, top 13 companies
according to their market capitalization were selected as sample for the study.

The sample has been selected by considering following factors:

1. The data which are available for the period of study i.e. from 2000 to 2019.
2. The companies, which are associated with steel production and process.
3. The company should be listed in Stock Exchanges of India.
4. The company should be having more than 1000 Crores market capitalization.
5. Company must be registered before 2000 in stock exchange.

The study covers a time period of 19 years beginning from 2000 and ending 2019, the last year for
which data are available. Present study is for selected Primary Steel producers of India.

6.4 PERIOD OF THE STUDY

The study of financial efficiency of Indian Steel Industry is made for the period of Nineteen (19) years
from accounting year 2000 to 2019. For this study year 2000 selected as the base year. This year is
normal for the purpose of analysis and evaluation.

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 7. LIMITATIONS

1. There are many approaches to the measurement of efficiency level and competitiveness. There is
no uniformity among experts.
2. Indian Steel Industry is backbone of the Indian economy, however attempts will be made to
eliminate on the basis of objective analysis at the secondary data and primary data.
3. Physical constrains at an individual research has obviously remarks some limitations in the
assembling of data due to vast panorama of companies of Indian Steel Industry.
4. The measurement of efficiency level of Indian Steel Industry gives diagnostic indicators. Research
being outside external analyst obviously has not assessed to internal data. Therefore, inside view of
the organization can’t characterized in the study.
5. These study will be based on secondary data and primary data derived from Annual Published
Reports, its quality depends on quality of such data.
6. Time, cost and location factors become major difficulties in completion of research within in the
stipulated time.

8. METHODOLOGY

The study being descriptive in nature, mainly rely upon secondary data. To support the secondary
information, primary data also has to be collected.
The following are the study areas and methodologies that will be used :-
1) Case studies and Focus group,
2) Primary data and Secondary data collection,
3) Discussion with experts, dealers, retailers and consumers etc,
4) Steel plant visit and discussion with management and officials,
5) Analysis of Statistical Data like trade, profit, competitiveness etc.
6) Cluster configuration for profit and loss analysis, performance analysis etc.,
7) Foreign steel companies performance, development study, marketing strategy and their statistical
data analysis,
8) Foreign countries like US, Japan, China, European countries Government polices and their
regulations study and analysis.

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 9. CONCLUSION

It is true, that “Steel” like many other sectors, grows in a cyclic order. After the starting of economic
liberalization process, steel industry has grown with positive and higher growth rate. The Government
policy needed should have a focused approach on resolving raw material supply, power supply, freight
challenges, energy tariff improvement, cost issues, import and export trade policy etc. It does not help
the overall situation if most new projects will come up on the coastal belt. What about the existing
138MT capacity? How are they going to benefit from the policy? There is no deep thinking on
improvement of competitiveness. The local steel industry requires incubation today but on a different
pedestal. The big triggers should have been on improving demand for steel, improving consistency and
input costs of raw material supplies, creating a pipeline for capital. Protection for the industry, focused
policy on mining, and capital allocation plans will help the industry improve their performance in the
immediate short term. It would have been a great idea if the government encouraged a consolidation of
the steel industry before any further capacity addition. There are a lot of steel mills that are languishing
and in serious debt. If these capacities can be absorbed by some ‘healthy’ players, it could be a ‘win-
win’ situation for both. Some amount of consolidation should be encouraged by involving concerned
financial institutions. Also there is a need for structuring in marketing strategy for the steel sector. The
government’s immediate policy focus has to be on improving capacity utilization to the robust levels of
90 percent and also regional development of the country by creating more employment directly and
indirectly. When most countries have begun looking inward, why not India?

So, the Indian steel industry has a bright future. The domestic producers gradually overcome the short
run depression in the post-liberalization phase. Now they are confident enough to produce over
200 million tonne steel and we must do it. If China can produce nearly 300MT of steel every year, why
cant India?. So if this growth rate in this sector continues then definitely within few years India will be
considered as a “Developed Country” and that will be based on Steel Industry which would not have
been possible without economic liberalization or globalization. The cost reduction would be the main
aspect of the improvement pertaining to the competitiveness of the industry. The manufacturers under
the steel industry in India have to focus their attention in the areas such as the transportation of basic
raw material, reduction in the cost of operation, technology upgradation, improvement in production
quality, and many more to face worldwide competition.

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 10. REFERENCES

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10.1 PERIODICALS, JOURNALS AND PUBLISHED REPORTS

1. Annual Reports of selected companies

2. Business India
3. The Bombay Stock Exchange of India official directory
4. The National Stock Exchange of India official directory
5. RBI Bulletin
6. Capital Market
7. Chartered Accountant
8. Charter Financial Analyst
9. Data Quest
10. Financial Express Mumbai & Delhi
11. Indian Journal of Accounting
12. Indian Journal of Public Enterprise
13. Indian Management
14. Investment Week
15. Management Accountant

10.2 NEWS PAPERS AND OTHER PUBLICATION

Below are the list of newspapers is used for the inputs of research and gets some useful information
regarding steel industry and sample companies from the available population for the research
undertaken by the researcher.

1. Times of India
2. Economic Times
3. The Hindu
4. Business Standard
5. Financial Express
6. News bulletin of the Steel Industry.

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