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36% Buy 👍 Sector logoSteel and Iron Products
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Shareholding Info
  • Promoters
    65 %
  • Foreign institutions-FII
    3.69 %
  • Other domestic institutions
    10.7 %
  • Retail and other
    16.71 %
  • Mutual Funds
    3.9 %

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About SAIL


Steel Authority of India Limited (SAIL) is one of the biggest companies in India to manufacture steel. A Maharatna of the country’s Central Public Sector Enterprises, SAIL produces almost all of its steel and iron production in five integrated plants and three special steel plants. These plants are located primarily in the central and eastern governances of India, close to the domestic sources of raw materials that go into its production.  Manufacturing a wide range of products, the company aims to become a respected world-class organisation and a leader in the Indian steel business regarding quality, productivity, profitability as well as customer satisfaction. SAIL has been around for generations and can trace back its origin to the formative years of the Indian nation. The steel sector was formed post independence to lay the infrastructure for the rapid industrialisation of this country as well as propel economic growth. Formatively called Hindustan Steel Limited (HSL), SAIL was set up on 19th January, 1954. HSL initially was designed for the management of only one plant - Rourkela. But, more plants came up and were handed over to them. A policy statement was drafted by the Ministry of Steel and Mines to evolve a brand new model and was presented to the parliament on 2nd December, 1972. On the basis of this, creation of a holding company to manage all inputs and outputs under one roof was moot, which in turn led to the formation of SAIL on 24th January, 1973 with an authorised capital of Rs. 2,000 crores. SAIL was given to manage five integrated plants at Rourkela, Bhilai, Bokaro, Burnpur and Durgapur, as well as the Alloy Steel Plant and Salem Steel Plant. In 1978, SAIL was restructured to be an operating company.

Core Activities & Products


Producing an unmatched range of mild steel, both in the flat and long categories, as well as a wide variety of special and stainless ones, SAIL identifies steel that meets all of their customer’s requirements. Whether it is an unusual product or a new product altogether, their customised products are ideal for all requirements. Priding themselves over a nationwide spread of Sales offices, Warehouses, Dealers and a team of seasoned Application Engineers, SAIL ensures swift and satisfactory fulfilment of this metal in all corners of the country. Some of its most-requested products are: 
  • Pig Iron
  • Cold Rolled Products
  • Pipes
  • Semis
  • Structurals
  • SAIL TMT BARS
  • Galvanised Products
  • Wire rods
  • PM Plates
  • Railway Products
  • Wheels and Axles
  • Hot Rolled Products
  • Stainless Steel Products
  • Electrical Products
  • SAIL SeQR TMT Bars
 

Board of Directors


Smt. Soma Mondal: Chairman, holding additional charge of the post of Director (Personnel)
Ms. Sukriti Likhi: Additional Secretary and Financial Advisor, Ministry of Steel
Shri Abhijit Narendra: Joint Secretary to the Government of India
Shri. N. Shankrappa: Independent Director
Shri Anirban Dasgupta: Director in charge (Bhilai Steel Plant)
Shri Amarendu Prakash: Director in charge (Bokaro Steel Plant)
Shri Ashok Kumar Tripathy: Independent Director
Shri Kanhaiya Sarda: Independent Director
Smt. Neelam Sonker: Independent Director
Shri Sagi Kasi Viswanatha Raju: Independent Director
Dr. Gopal Singh Bhati: Independent Director
Shri Vijendla Srinivasa Chakravarthy: Director (Commercial)
Shri Atanu Bhowmick: Director in charge (Rourkela Steel Plant)
Shri Brijendra Pratap Singh: Director in charge (Burnpur and Durgapur Steel Plant)
Prof (Dr.) K. Jayaprasad: Independent Director
Shri Anil Kumar Tulsiani: Director (Finance)

Presence


SAIL Integrated Steel Plants:
  1. Rourkela Steel Plant, Odisha
  2. Bhilai Steel Plant, Chattisgarh
  3. Durgapur Steel Plant, West Bengal
  4. Bokaro Steel Plant, Jharkhand
  5. IISCO Steel Plant, West Bengal
Special Steel Plants:
  1. Alloy Steel Plant, West Bengal
  2. Salem Steel Plant, Tamil Nadu
  3. Visvesvaraya Iron and Steel Limited, Karnataka
Main Offices:
  1. Scope Minar, Core - 1, 17th Floor, Laxmi Nagar District Centre, New Delhi - 110092
  2. Ispat Bhavan, 40 Jawaharlal Nehru Road, Kolkata, 700071

Strengths:


A renowned and respected world-class corporation, SAIL is a leader in the Indian steel business, especially when it comes to quality, productivity, and customer satisfaction. The key aspects of the business gives it a competitive advantage in the market, becoming one of its greatest strengths. Key factors in this include an experienced workforce, financial position, product uniqueness, and intangible assets such as brand value. The ‘Strengths’ in the SWOT Analysis of the Steel Authority of India Limited is as follows: 
  1. Strong employee workforce with over experienced 130,000 employees
  2. Strong financial resources, given that it is a Govt enterprise
  3. High technical & managerial expertise in the industry
  4. Strong raw material supply chain management
  5. Partnerships with NTPC, Bokaro Steel, and more, which have strengthened its market position
  6. Annual production of over 13 million tonnes

CSR and Sustainability


Since its inception in 1973, the Steel Authority of India Limited has taken various steps to give back to its country. Long before the term ‘Corporate Social Responsibility’ became popular, SAIL had already been working on socio-economic development of the neighbourhoods and communities amidst which they had set up their plants and units. The aim was to use its profits and growth for the welfare of the community that was the core reason for its prosperity in the first place, and to minimise inequalities amongst the people by providing healthcare, education, infrastructure, and employment.The contributions made by SAIL as a responsible corporate citizen in nation-building has not gone unnoticed. Their activities and CSR Projects have won several prestigious awards, honours and accolades. Some of the notable ones are:
  • SCOPE Meritorious Award for Corporate Social Responsibility & Responsiveness, 2008-09, which was presented by the then President of India, Smt Pratibha Devi Singh Patil.
  • Annual FICCI Awards 2008-09 for 'The Vision Corporate Triple Impact - Business Performance: Social & Environmental Action and Globalisation Award“, presented by the then Finance Minister of India, Sh. Pranab Mukherjee
  • Businessworld-FICCI-SEDF CSR Award, 2006 presented by the honorable President of India, Dr A.P.J. Abdul Kalam
  • FICCI Award for Rural & Community Development, 2006-07
  • CSR Award of the Ministry of Rural Development, Government of India
  • Golden Peacock Award - for CSR to Bhilai Steel Plant of SAIL
  • CSR Award of Tamil Nadu Government, 2007-08 and 2008-09
  • Finalist of the Stevie Award for Best CSR Programme in Asia (Subcontinent, Australia & New Zealand).

Criticism


Based on the extensive SWOT analysis undertaken from SAIL, there have been a few weaknesses and criticisms mapped for the corporation. These can be defined as the areas where the company may be lacking or its competitors are doing better in. They are as follows:
  1. Govt and political intervention often affect the operational efficiency of the company.
  2. The company limits its profit margins, making it impossible to increase beyond a certain point.

COVID-19 Impact


The covid lockdowns in India and around the world negatively impacted both the demand and supply of various materials. This fall in demand for steel, as well as inability to run plants at full capacity, caused a slowdown in cash flow, resulting in a loss of Rs. 771.76 crore in FY2020 and an increase in borrowings by Rs. 500 crore in the first quarter of FY21However, the company took several cash conservation measures, which has limited the impact of the pandemic to a great extent.

Future Prospects


For the coming years, SAIL has mapped a journey that focuses heavily into modernisation and expansion, aiming to increase the hot metal production to 23 million tones, 60% higher than existing numbers. Additionally, these plans will also focus on all round improvement in the productivity levels across all stages of production. Current issues in technological gaps, energy savings, pollution control, and infrastructural facilities will also be looked into. In the IT side of things, SAIL intends to move towards integrating the existing business systems. They aim to introduce Enterprise Resource Planning, currently implemented only at the Bhilai and Bokaro Steel Plants, across all their plants and units. Apart from this, SAIL already has projects worth Rs.18,500 crore in various stages of implementation. The major projects that have already been cleared in recent months include modernisation-cum-expansion of IISCO Steel Plant (ISP), costing approximately Rs. 9,500 crore, steel melting and additional cold rolling facility at Salem Steel Plant at an approximate cost of Rs.1,550 crore, and a bar & rod mill at Durgapur Steel Plant (DSP) at around Rs. 740 crore.

Did You Know!


With over 93,350 employees, SAIL produced a total of 13.9 million tonnes of crude steel by operating at 103% of its installed capacity, an increase of 1% over the previous year. It also singlehandedly generated approximately 710 MW of electricity during FY 2014-15. Did you know that the entire requirement of iron ore is met with the captive mines owned by SAIL. The capacities are now being expanded so more can be mined and new ones will start showing up soon.

Initial Public Offering


The IPO of SAIL was released on the National Stock Exchange (NSE) in October, 2019, as well as listed on BSE, where the base SAIL share price was set at Rs. 63 per share. The face value per SAIL stock price was Rs. 10. The issue size of shares of Rs. 10 was 24,03,96,572 shares and these were all offered for sale. This IPO was promoted by the Government of India. Overall, the IPO was performed weakly due to the inability to maintain or raise the sales volumes as the demand for their products was low at this point in time. Another reason was higher fixed costs and delayed expansion projects.

Equity Shares


The steel sector seems to have taken a hit in the last few weeks. Not only SAIL, but equally large corporations such as Tata Steel have also faced turmoil in their stock prices. So far, SAIL’s share value has fallen about 53% from its peak value. Buyers who had purchased the shares at its peak are stuck in the market as of now. However, the market has begun rising again, especially demand for basic materials such as steel. SAIL, whose share prices seem to be undervalued, is expeted to rise over the next 5 years. The company is expected to perform well in the long term, especially the next 5.

Annual Financial Summary


Mar 2021 (Cr.)Mar 2020 (Cr.)Mar 2019 (Cr.)Mar 2018 (Cr.)Mar 2017 (Cr.)
EQUITY4,130.534,130.534,130.534,130.534,130.53
RESERVE SURPLUS39,364.3535,646.8534,021.0431,583.1431,878.53
TOT DEBTS37,676.5854,127.0545,170.0445,408.7241,395.65
GROSS BLOCK1,15,093.811,12,711.501,01,456.6395,519.4484,565.79
CAPITAL WORK IN PROGRESS8,878.488,751.5616,013.5018,395.4323,275.39
CASH LIQUID INVESTMENT680.52363.25219.42254.06289.09
NET WORKING CAPITAL2,167.8417,585.427,906.105,936.495,523.08
CURRENT ASSETS37,884.9354,754.2845,540.9643,062.3637,258.05
CURRENT LIABILITIES35,717.0937,168.8637,634.8637,125.8731,734.97
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