Impact of Brexit on Indian Economy

An introduction to BREXIT BREXIT refers to the withdrawal of the United Kingdom from the European Union. The European Union is an economic and political union of 28 European countries. It was established in January 1958 and at that time it was known as the European Economic Community. It was started with only 6 countries […]

Dollar Value Appreciation and its Effect on Different Industries

–Winston D’Souza[1] and Sushma Kudva[2] Introduction Indian Rupee (INR) has depreciated against US Dollar (USD) the most (about 8.3 percent) in comparison with other major currencies such as Euro (EUR), Great Britain Pound (GBP), Japanese Yen (JPY) and Chinese Yuan (CNY) in the last five years. The USD appreciation is due to various factors such […]

Mergers and Acquisitions, The game of consolidation in the Indian steel sector

Steel being one of the important materials of industrial development,
determines much of a country’s economic development and growth. However,
due to its oversupply across the globe, market players in India needed to sell
the steel products at a lower cost. Low capacity utilization further decreased the
production and sales volume of Indian Steel Industry. These made the highly
leveraged firms incapable of repaying their debts and be listed as defaulters by
the RBI.
Insolvency and Bankruptcy Code (IBC), thereby, proposed a paradigm shift
from ‘Debtor in possession’ to ‘Creditor in control’ as a new plan for liquidation
of new stressed assets. For existing ones, it allowed acquisitions by the existing
players. This led to the acquisition of Bhusan Steel Limited (BSL) by Tata Steel,
Electrosteel Steels by Vedanta and Monnet Ispat & Energy Ltd by JSW steel.
Such acquisitions did not only increased the capacity utilisation and profitability
of the acquirers, but also aided the lenders of the stressed assets realise amounts
to pacify their losses, thereby boosting the overall economy.

MERGERS AND ACQUISITIONS: THE GAME OF CONSOLIDATION

A merger is a concoction of two companies to form a single entity where both assets and liabilities are merged together. In an acquisition, one company “takes over” another company where assets and liabilities of the acquired company become part of the “acquirer” company. There are 4 different types of M&A: Horizontal: Horizontal M&A happens […]