Institute of Integrated management Studies

Corporate Finance
Marks: 100
Q 1) Steel Authority of India Limited (SAIL), one of the world’s largest government-owned steel making
companies and India’s largest, was incorporated on January 24, 1973. The Government of India held
75% of the stake in SAIL.

The working capital management at SAIL was vital to ensure the firm’s liquidity and profitability as a large
part of the assets was attached to its current assets. This case is designed to analyze the working capital
management at SAIL in order to understand the current assets and current liabilities of a manufacturing
firm vis-a-vis a non-manufacturing firm. The computation of the operating cycle and analysis of liquidity
ratios provide an important basis for decision making.

a. Analyze how the global market situation may impact a firm’s working capital.  (10)

b. Identify the areas where business can take strategic decisions for optimizing the operating
cycle.  (10)

Q2) Set in the backdrop of one of the best stated IndianCFOs, the primary objective of the case is
to analyze the emerging roles of a Chief Financial Officer (CFO) in the changing business
environment of the 21st century.CFOs, previously known for maintaining accurate financial
details of the company, have now become the strategic decision-makers in the company. The case
mainly focuses on various roles played by Praveen Kadle, the CFO of Tata Motors, in turning
around the company and the crucial role played by him in implementing the management's
decisions effectively in times of crisis.

a. Comment on the core function of a CFO and his/her changing roles with the increasing
business demands (10)
b.Analyze the factors that made Praveen Kadle,CFO of Tata Motors, the Best Indian CFO of
2006. (10)

Q 3) Essar Steel Ltd. (Essar Steel) is the largest integrated producer of steel in Western India with
a capacity of 4.6 million tonnes per annum (mtpa). Essar diversified its business by expanding
into various sectors. The simultaneous launch of several projects during the 1990s pushed the
group towards a liquidity crunch. To tide over the financial crisis, Essar Steel decided to avail the
option of CDR to get out of the debt trap and strengthen its balance sheet. The case discusses
Essar Steel’s financial crises and its reengineering. It also discusses how financial problems
affected the liquidity of Essar Steel and the several financial strategies formulated by Essar Steel
to tide over the problems. It also helps to evaluate the reengineering strategy undertaken by Essar
Steel to repay the debt and expansion of related projects.

a. Comment on the factors lead the Essar Steel towards financial crises. (10)

b. To evaluate the re-engineering Strategy adopted by Essar Steel to overcome its

problems. (10)
Q4) The primary objective of the case is to deal with the problems encountered by Suzlon Energy
Ltd., due to the liquidity crisis that surfaced in the company in the year 2008. Suzlon started as a
very small company to provide alternate source of energy to the textile company of the
founder,Tulsi R.Tanti.With in no time, it evolved as the world's fifth largest manufacturer of wind
turbines. However, the company faced several problems in the year 2008 due to over leveraging,
increased costs involved in replacing the faulty blades that it supplied to its US and Portugal
clients and slow down in sales due to the global financial downturn. The liquidity crisis was
further compounded by the acquisition commitments for stake in REpower. Suzlonis looking at
various financing options to meet its commitments. Given these pressures, what are the different
alternative finance sources, which Suzlon can tap in order to come out of the liquidity crisis?

a. Evaluate the reasons for the current crisis in Suzlon (10)

b. Suggest the various options available for Suzlon to come out of the liquidity crisis.
(10)
Q5) Kingfisher Airlines, which redefined air travel in India, hit financial turbulence in late 2011
due to mounting debt and a shortfall in expected revenue. Despite restructuring the debt with the
help of creditors, the airline found it difficult to extricate itself out of its troubles. The case tracks
the transformation in the Indian aviation sector as well as the ups and downs of Kingfisher
Airlines. It provides information on the complex debt restructuring exercise at Kingfisher
Airlines.

a. Analyze the changing regulatory environment, tax structure, and tariff with regard to the
airline industry in Emerging Indian economies  (10)

b. Comment on the debt restructuring process and the challenges of making it successful
(10)