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Krushi Parekh, CA; Parth Pahuja, CA

Steel’s Recent Capital Allocation Decisions - An Analysis

Recent Capital Allocation Decisions by an Indian Steel Major – An Analysis | Multi-Act

By | Capital Allocation | No Comments

One of India’s largest steelmakers recently acquired the assets of a competitor, an insolvent domestic steelmaker under Insolvency & Bankruptcy Code proceedings (“IBC company”). The acquisition comes at a time when the steel company is restructuring its operations in Europe, which it acquired 10 years ago, supposedly at the peak of the business and valuation cycle. However, the company has suffered since 2007 due to this debt-funded venture in Europe and yet continues to use significant leverage, as its recent buyout indicates.

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