You are on page 1of 47

ICICI BANK

Karnataka University Dharwad
Global College of Business Management & IT Akshay colony, Hubli.

An empirical study on

“TAX-PLANNING OF SALARIED PERSONS”
HUBLI Guide Prof. Jayshree K. Submitted by Mr. Pandurang K.Hanamasagar URN: 09B11822 BBA VI SEMESTER 2011-2012
GLOBAL COLLEGE OF MANAGEMENT & IT, HUBLI Page 1

ICICI BANK
GLOBAL COLLEGE OF BUSINESS MANAGEMENT & IT Akshay colony, Hubli. (Affiliated to Karnataka University, Dharwad and recognized by Govt. of Karnataka)

CERTIFICATE This is to certify that Mr. Pandurang K.Hanamasagar URN:09b11822 has satisfactorily completed his project entitled “TAX-PLANNING OF SALARIED PERSONS”, HUBLI. In the partial fulfillment of the requirement of bachelor of business administration, during the academic year 2011-12.

Internal Guide Prof. Jayshree K.M.com

External Guide Mr. Anand.Shenoy

GLOBAL COLLEGE OF MANAGEMENT & IT, HUBLI

Page 2

ICICI BANK

DECLARATION

I hereby affirm that this project report “ A Project on ““A Study on the Customer relationship Management Adopted By ICICI Prudential Insurance Company Ltd” HUBLI has been under taken by me during the period 1st December 2011 to 30th December 2011 as a part of my academic curriculum.

I further declare that, this project report is the result of my own efforts and has not been submitted earlier to any other college/university for award of any other degree.

DATE:

_________

Bhramkumar.S.K

Reg.no: 08b14803

PLACE: HUBLI

GLOBAL COLLEGE OF MANAGEMENT & IT, HUBLI

Page 3

ICICI BANK

ACKNOWLEDGEMENT
The successful accomplishment of any task is incomplete without acknowledging the personalities who have contributed, assisted and inspired me. I would like to thank my parents for supporting me in doing this project. I would like to thank KARNATAK UNIVERSITY DHARWAD for giving an opportunity to work on a valuable project. At the outset I would like to acknowledge my sincere gratitude to ICICI life insurance pvt ltd for allowing me to take my implant training at their in the same. I express my sincere thanks to Prof.Ravikumar.Kabbinad for rendering her kind cooperation and help without which my project would have been incomplete. At the same time I would like to take this opportunity to thank our beloved Principal Prof.Ravikumar.Kabbinad and BBA Co-ordinator Dr.Mahesh.Deshpande who supported me and for their guidance of this project. I would like to express my gratitude to all those who directly and indirectly assisted me in completing the project report.

Bhramkumar.S.K Reg.no: 08b14803

GLOBAL COLLEGE OF MANAGEMENT & IT, HUBLI

Page 4

HUBLI Page 5 . management executives and the bankers all analyze these statements. significant conclusions may be arrived regarding thechanges in the financial position. it is very necessary for every organization whether it is a financial or manufacturing etc. the two important financial statements are the Balance sheet & Profit and loss account of the business. Balance sheet is a statement of the financial position of an enterprise at a particular point of time. Profit and loss account shows the net profit or net loss of a company for a specified period of time. to make financial statement and to analyze it. A b a n k e r i n t e r p r e t s t h e financial statement so as to evaluate the financial soundness and stability. Analysis and interpretation of the financial statement has now become an important technique of credit appraisal. financial experts.ICICI BANK EXECUTIVESUMMARY In any organization. Company Profile GLOBAL COLLEGE OF MANAGEMENT & IT.A n a l y s i s o f f i n a n c i a l s t a t e m e n t h e l p s i n m a k i n g t h e f u t u r e d e c i s i o n a n d s trategies. the important policies followed and trends in profit and loss etc. Though the basic technique of appraisal remains the same in all the cases butt h e a p p r o a c h a n d t h e e m p h a s i s i n a n a l y s i s v a r y . A n a l y s i s o f f i n a n c i a l s t a t e m e n t i s n e c e s s a r y b e c a u s e i t h e l p i n depi c t i n g t he f i n an ci al po si t i o n o n t h e b a si s o f p a st an d cu r r ent r e co r ds . The investors. INTRODUCTION  Objective of Study The main objectives of this project are the following:  To Study About Fundamental Analysis of ICICI Bank. Therefore. When these statements of the last few year of any organization are studied and analyzed. the liquidity position and the profitability or the earning capacity of borrowingc o n c e r n .

ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998. Malaysia and Indonesia. venture capital and asset management.83 Crores at March 31. 41. United Arab Emirates. life and non-life insurance. ICICI Bank is the most valuable bank in India in terms of market capitalization and is ranked second Amongst all the companies listed on the Indian stock exchanges. HUBLI Page 6 . and was its wholly owned subsidiary. ICICI Bank's acquisition of Bank of Madura Limited in an all Stock amalgamation i n f i s c a l 2 0 0 1 .and profit after tax of Rs. South Africa.ICICI BANK ICICI BANK: ICICI Bank is India‟s second-largest bank with total assets of 363866. an equity offering in the form of ADRs listed on the NYSE in fiscal 2000. China. Bangladesh. branches in Singapore. In terms of free float market capitalization*.ICICI Bank's Equity shares are listed in India on Bombay Stock Exchange ( B S E ) an d th e Na ti on al S t oc k E x c h an g e ( NS E ) of In d i a L i mi t ed an d i ts American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).950 ATMs in India and presence in 18 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customer through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking. 2010. Bahrain. The Bank currently has subsidiaries in the United Kingdom. 2010 . Sri Lanka and Dubai International Finance Center and representative offices in the UnitedStates. an In di an financial institution.58 billion for the year ended March 31.The Bank has a network of about 1308 Branches and 3. Hong Kong. HISTORY: ICICI Bank was originally promoted in 199 4 b y I CI CI L i mi t ed . UK subsidiary has established a branch in Belgium. Russia and Canada. Thailand. a n d s e c o n d a r y m a r k e t s a l e s b y I C I C I t o institutional investors in fiscal 2001 GLOBAL COLLEGE OF MANAGEMENT & IT.

The merger was approved by shareholders of ICICI and ICICI Bank in January 2002. The merger would enhance value for ICICI shareholders through the merged entity's access to low-cost deposits. both directly and through a number of subsidiaries and affiliates like ICICI Bank. In t h e 1 99 0s . HUBLI Page 7 . an d wo ul d cr e at e t h e o pt i m a l l e gal str ucture for the ICICI group's universal banking strategy. IC IC I t ra ns fo rm ed i t s bu si n e s s f ro m a d evelopment financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services. In October 2001. T h e p r i n c i p a l o b j e c t i v e w a s t o c r e a t e a d e v e l o p m e n t fina ncial institution for providing medium-term and long-term project financingt o In di an bu s i ne ss es . Consequent to the merger. and access to the vast talent pool of ICICI and its subsidiaries. the Government of India and representatives of I n d i a n i n d u s t r y . the Boards of Directors of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries. the managements of ICICI and ICICI Bank formed the view that the merger of ICICI with ICICI Bank would be the optimals t rat e gi c a l t er nat i v e fo r bo t h e nt i t i es . with ICICI Bank. The merger would enhance value for ICICI Bank shareholders through a large capital base and scale of operations.h i gh e r m a r ket s ha r e i n v ar i ou s bu si n es s s e gm ent s. ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. In1999. by the High Citst of Gujarat at Ahmedabad in March2002. ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees GLOBAL COLLEGE OF MANAGEMENT & IT. have been integrated in a single entity.After consideration of various corporate structuring alternatives in the context of the emerging competitive scenario in the Indian banking industry. and by the High Cost of Judicature at Mumbai and the Reserve Bank of India in April 2002. ICICI was formed in 1955at the initiative of the World Bank. both wholesale and retail. the ICICI group's financing and banking operations. pa rt i c ul ar l y f e eba s e d services.ICICI BANK and fiscal 2002. seamless access to ICICI's strong corporate relationships built up over five decades. ICICI Personal Financial Services Limited and ICICI Capital Services Limited. entry into new business segments. greater opportunities for earning feebased income and the ability to participate in the payments system and provide transaction-banking services. and the move towards universal banking.

1% to 3. If the economy grows rapidly. The analysis of macroeconomic environment is essential to understand the behavior of the stock prices . gross private domestic investment and government expenditure on goods and services and net export of goods and services. 1949 can be broadly classified into two major categories.3%. stock prices are low. The GDP growth in 2001-02 accelerated to 4. The estimates of GDP are available on an annual basis. GDP consists of personal consumption expenditure. GDP represents the aggregate value of the goods and services produced in the economy. commercial banks can be further grouped into nationalized banks. The rate of growth of GDP is around 6% in the nineties. PSBs. the industry can also be expected to show rapid growth and vice versa.3% to 3.4% compared to 4% of the previous year despite of drought in the country. which currently account for more than 78 percent of total banking industry assets are saddled GLOBAL COLLEGE OF MANAGEMENT & IT. which are the mainstay of the Indian Banking system are in the process of shedding their flab in terms of excessive manpower. non-scheduled banks and scheduled banks.000 branches spread across the country. which is governed by the Banking Regulation Act of India.7% whereas Industrial growth has been increased to 6.The commonly analyzed Macro economic factors are as follows A) Gross Domestic product ( GDP ) GDP indicates the rates of growth of the economy. and when the level of economic activity is high. HUBLI Page 8 . the PSBs. excessive non Performing Assets (Npas) and excessive governmental equity. These banks have over 67. Scheduled banks comprise commercial banks and the co-operative banks.ICICI BANK Economic Analysis The Level of economic Activity has an impact on investment in many ways. Introduction to Banking Sector The Indian Banking industry. while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. regional rural banks and private sector banks (the old/ new domestic and foreign). the State Bank of India and its group banks. stock prices are high reflecting the prosperous outlook for sales and profits of the firms. The industry is currently in a transition phase. On the one hand. In the fiscal year Agricultural growth has been reduced from 5. When the level of economic activity is low. In terms of ownership.

The growth in aggregate deposits of the scheduled commercial banks at 15.0 percent as against the previous year‟s 6. IndusInd Bank. the industry has witnessed several such instances. money supply (M3) grew by around 16. while bank credit expanded at a Cagr of 16. Therefore one of the means for them to combat the PSBs has been through the merger and acquisition (M& A) route. HDFC Bank‟s merger with Times Bank ICICI Bank‟s acquisition of ITC Classic. For instance.8 percent per annum during the same period. The private players however cannot match the PSB‟s great reach. GLOBAL COLLEGE OF MANAGEMENT & IT.4 percent. Vysya Bank are said to be on the lookout.8 percent during 1969-99. Aggregate Performance of the Banking Industry Aggregate deposits of scheduled commercial banks increased at a compounded annual average growth rate (Cagr) of 17. HUBLI Page 9 .4 percent in FY01 percent was lower than that of 19. Bank of Punjab.ICICI BANK with NPAs (a mind-boggling Rs 830 billion in 2000). lack of modern technology and a massive workforce while the new private sector banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service.3 percent per annum. The UTI bank. while the growth in credit by SCBs slowed down to 15. Banks‟ investments in government and other approved securities recorded a Cagr of 18. In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth of only 6.3 percent in the previous year.6 percent in FY01 against 23 percent a year ago. The WPI Index (a measure of inflation) increased by 7.2 percent as against 14. falling revenues from traditional sources.1 percent as against 3. Over the last two years. Anagram Finance and Bank of Madura.3 percent in FY00. Similarly. The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes.6 percent a year ago.Global Trust Bank merger however opened a Pandora‟s box and brought about the realization that all was not well in the functioning of many of the private sector banks. Centurion Bank. great size and access to low cost deposits.

Governmental Policy After the first phase and second phase of financial reforms. post the East Asian crises in 1997-98 saw a climb in the global interest rates. The steady fall in the interest rates resulted in squeezed margins for the banks in general. quantitative restrictions on credit flows. HUBLI Page 10 . India has however remained more or less insulated.43 percent in the quarter ended March 2001. The only exception was in July 2000 when the RBI increased the Cash Reserve Ratio (CRR) to stem the fall in the rupee against the dollar. The resultant financial sector reforms called for interest GLOBAL COLLEGE OF MANAGEMENT & IT. The net profits of 20 listed banks dropped by 34. with administered interest rate structure.56 percent in the fourth quarter of 2000-2001. The resultant „financial repression‟ led to decline in productivity and efficiency and erosion of profitability of the banking sector in general. Narasimham). high reserve requirements and reservation of a significant proportion of lendable resources for the priority and the government sectors.ICICI BANK The industrial slowdown also affected the earnings of listed banks. The RBI has been affecting bank rate and CRR cuts at regular intervals to improve liquidity and reduce rates. but dropped to 4. Interest Rate Scene The two years. 1991. This was worked out mainly with the help of the recommendations of the Committee on the Financial System (Chairman: Shri M.75 percent in the first quarter of 2000-2001. This was when the need to develop a sound commercial banking system was felt. Net profits grew by 40. It was only in the later half of FY01 that the US Fed cut interest rates. The restrictive regulatory norms led to the credit rationing for the private sector and the interest rate controls led to the unproductive use of credit and low levels of investment and growth. in the 1980s commercial banks began to function in a highly regulated environment. The past 2 years in our country was characterized by a mounting intention of the Reserve Bank Of India (RBI) to steadily reduce interest rates resulting in a narrowing differential between global and domestic rates.

changes in the credit delivery system and integration of functional roles of diverse players. as on March 2005. such as. provides extensive research and objective analysis on the growing banking industry. N.04. -Retail loan to drive the growth of retail banking in future.ICICI BANK rate flexibility for banks. Detailed data and analysis helps an investor. Indian Banking Sector Analysis (2006-2007).199 crore in March 2005 to Rs 8. reduction in reserve requirements. Sridar Iyengar GLOBAL COLLEGE OF MANAGEMENT & IT.43. and a number of structural measures. banks. financial institutions and nonbanking financial companies (Nbfcs). their product quality.627 Branches in India. financial service providers. Credit market reforms included introduction of new instruments of credit. -Investments of scheduled commercial banks (SCBs) also saw an increase from Rs 8. Now there are about 33. -India's retail-banking assets are expected to grow at the rate of 18% a year over the next four years (2006-2010). and their services in India. HUBLI Page 11 . -Housing loan account for major chunk of retail loan BOARD OF DIRECTORS  MR. Key Findings: -The nationalized banks have more branches than any other types of banks in India.Vaghul (CHAIRMAN)  MR. and global banking players navigate the evolving market of banks in India. Interest rates have thus been steadily deregulated in the past few years with banks being free to fix their Prime Lending Rates(PLRs) and deposit rates for most banking products.081 crore in the same month of 2006. PSBs were allowed to access the markets to shore up their Cars. Domestic Private Sector Banks were allowed to be set up. This report helps clients to analyze the leading-edge opportunities critical to the success of the banking Industry in India.

ICICI BANK  MR. Sinha  Prof. Marti G. V. M. P. Prem Wasta  MR. Madhabi Puri-Buch. HUBLI . Anupam Puri  Mr. Chanda Kochhar (JOINT MANAGING DIRECTOR)  MR. Mittal  MR. Narendra Murkumbi  MR.M. Sonjoy Chatterjee (EXECUTIVE DIRECTOR) Board Committees Audit Committee Board Governance. Subrahmanyam  MR. Sharma  MR. K. Kamath (MANAGING DIRECTOR & CEO)  MR. K. V. T. Executive Director  MR. Lakshmi N. S. (EXECUTIVE DIRECTOR)  Ms. Arun Ramanathan  MR. Vaidyanathan. Remuneration & Nomination Committee Page 12 GLOBAL COLLEGE OF MANAGEMENT & IT. V. Vijaya  MR.

HUBLI Page 13 . Ramachandran Mr. Sridar Iyengar. Ramachandran. Kamath Mr. K. Chairman Mr. M.V. Kamath. Chanda Kochhar Credit Committee Mr. Tushaar Shah Ms. V. Sridar Corporate Social Responsibility Committee Customer Service Committee Mr. Ramachandran Mr. Chanda Kochhar Mr. Chairman GLOBAL COLLEGE OF MANAGEMENT & IT. Kamath.S. Sridar Iyengar. Homi Khusrokhan. Rajiv Sabharwal Information Technology (IT) Strategy Committee Mr.V. K.S. M. Chairman Risk Committee Mr. Chairman Mr. Chairman Mr. Sridar. K. Chairman Mr. K. M.V. M.ICICI BANK Mr. Homi Khusrokhan Mr. Arvind Kumar Ms.V. Chairman Mr. Kamath. Homi Khusrokhan Ms. V.S. Sridar Ms. Chanda Kochhar Fraud Monitoring Committee Mr. Chairman Mr. Ramachandran Mr. V. Mr. Arvind Kumar Dr. Kamath Mr.V. K. Chanda Kochhar Mr. Homi Khusrokhan Mr.S. Homi Khusrokhan.

N. Rajiv Sabharwal VISION AND MISSION GLOBAL COLLEGE OF MANAGEMENT & IT. Kannan Mr. Chairman Mr. Chanda Kochhar Mr. N. Sridar Mr. Kamath Mr.S. Ramkumar Mr. Sridar Ms. Arvind Kumar Mr. Homi Khusrokhan. K. Chanda Kochhar.S.ICICI BANK Mr. Chanda Kochhar Share Transfer & Shareholders'/ Investors' Grievance Committee Mr. K. V. Sridar Iyengar Ms. Chairperson Mr. Sridar Iyengar Mr. HUBLI Page 14 . V.V. Kannan Committee of Executive Directors Ms.

 Expand the frontiers of our business globally.  Create value for our stakeholders. Mission We will leverage our people.  Maintain a healthy financial profile and diversify our earnings across businesses and geographies. HUBLI Page 15 .  Play a proactive role in the full realization of India‟s potential. worldclass products and services. technology. RISK ASPECTS OF ICICI BANK RISK MANAGEMENT GLOBAL COLLEGE OF MANAGEMENT & IT. speed and financial capital to:  B e t h e ba nk e r of f i r st ch oi ce fo r ou r cu st om e rs b y d el i v eri n g high quality.  C ont ri but e po si t i ve l y t o t he v a ri o us c ou nt r i e s an d m a rk et s i n which we operate.  Maintain high standards of governance and ethics.ICICI BANK Vision  To be the leading provider of financial services in India and major global bank.

RBI Inspection & Anti-Money Laundering Group and the Internal Audit Group. regulatory bodies and industry experts. In retail credit operations. the Board or a Board Committee approves all products. disciplined risk assessment and measurement procedures and continuous monitoring. Bank is exposed to various risks. Bank has standardized credit-approval processes. The rating factors in quantitative. M a r k e t R i s k M a n a g e m e n t g r o u p . ICICI Bank has well developed internal credit rating methodologies for rating obligors. Bank has two dedicated groups. including credit risk. RMG is further organized into the Credit Risk Management group. HUBLI Page 16 . The policies and procedures established for this purpose are continuously benchmarked with international best practices.ICICI BANK Risk is an integral part of the banking business and bank aim at delivering superior shareholder value by achieving an appropriate trade-off between risk and returns. qualitative issues and credit enhancement features specific to the transaction. CREDIT RISK Credit risk is the risk that a borrower is unable to meet its financial obligations to the lender. The rating serves as a key input in the approval as well as post-approval credit processes. Bank measure. monitor and manage credit risk for each borrower and also at the portfolio level. CAG is further organized into the Credit Policies. market risk an d op er at i o na l ri s k . which include a well-established procedure for comprehensive credit appraisal and rating. a n d R e t a i l R i s k M a n a g e m e n t g r o u p a n d Operational Risk Management group. policies and authorizations Credit approval authority lies only with the credit officers who are distinct from GLOBAL COLLEGE OF MANAGEMENT & IT. These groups from parts of the corporate center are completely independent of all business operations and are accountable to the Risk and Audit committees of the Board of directors. Ba nk ‟s r i sk m a na ge m e nt st r at e g y i s b as e d o n a cl e a r un derstanding of various risks. management and mitigation of risk in ICICI Bank. Industryk n o wl ed ge i s con st ant l y up da t e d t h r ou gh fi el d v i si t s and i n t e r a ct i ons wi t h clients. the RISK MANAGEMENT GROUP (RMG) a n d C O M P L I A N C E & A U D I T G R O U P ( C A G ) w h i c h i s r e s p o n s i b l e f o r ass essment.

foreign currency exchange rates. monitors adherence to limits. The policies are approved by the Board of Directors. equity prices and commodity prices. MARKET RISK Market risk is the risk of loss resulting from changes in interest rates. The treasury Middle Office Group monitors the asset-liability position underthe supervisionof t he A LC O.ICICI BANK the sales team. HUBLI Page 17 . Li q ui d i t y r i s k i s m e as u r ed t h r ou gh ga p a na l ys i s. External agencies such as field investigation agenciesand c re di t p ro c essi n g a gen ci es ar e us ed t o fa ci l i t at e a com p re h ens i v e du e diligence process including visits to offices and homes in the case of loans to individual borrowers. Credit scoring models are used in the case of certain products like credit cards. articulates the organisation‟si nt e r e s t ra t e v i e w a nd d et e rm i n es t he st r at e g y i n l i ght of t he cu rr ent and ex p e ct ed e nv i ro nm ent . GLOBAL COLLEGE OF MANAGEMENT & IT. ICICI Bank limit exposure to exchange rate risk by stipulating position limits. Th es e pol i ci es a nd p ro c ess e s a r e ar t i cul at e d i n t he ALPM policy. RMG exercises independent control over the processo f m a r k e t r i s k m a n a g e m e n t a n d r e c o m m e n d s c h a n g e s i n p r o c e s s a n d methodologies for measuring market risk Interest rate risk is measured throught h e u s e o f r ep ri ci n g ga p an al ys i s an d d u ra t i o n an al ys i s. t r a c k i n g t h e d a i l y f u n d s p o s i t i o n a n d complying wi t h al l t r e as ur y r e l at e d m an a ge m e nt a nd r e gul at o r y r e po rt i n g requirements. The investment policy addresses issues related to investment in various trading products. B an ks e ns u r e a de qu at e l i q ui d i t y at al l t i m ethrough systematic funds planning and maintenance of liquid investment as well as focusing on more stable funding sitsces such as retail deposits. The Asset Liability Management Committee (ALCO) of the Board of Directors stipulate liquidity and interestrate risk limits. The objective of market risk management is to minimize the impact of losses on earnings and equity capital due to market risk. Market risk policies include the Investment Policy and the Asset-Liability Management (ALM) Policy. Th e T r ea sur y M i d dl e Of fi c e Gr ou p i s al s o r es p o n s i bl e f or p r o c e s s i n g t r e a s u r y t r a n s a c t i o n s .

com put e r s ys t e m s. developing mitigants to minimize the impact and developing plans to m e et ex t er n al sho c k s t h at ca n ad v er s el y i m p a ct c ont i nu i t y i n t h e b an k‟ s operations. f ai l ur e o f o p er at i on al an d i n fo rm at i o n s e cu ri t y p r o ce du r es . or other risk responses. focusing on flaws in products and their design that can expose the bank to losses due to fraud.ICICI BANK OPREATIONAL RISK Operational risk is the risk of loss that can result from a variety of factors . i m p r o p e r l ydoc um e nt ed t ra ns a ct i on s. e s t a b l i s h i n g s y s t e m s a n d p r o c e d u r e s t o m o n i t o r transactions. Effective operational risk management system would ensure that bank has sufficient information to make appropriate decisions about additional controls. maintaining key back-up procedures and undertaking regular contingency planning. i n ad eq u a t e training and employee errors. Operational risk management policy aims at minimizing losses and customer dissatisfaction due to failure in processes. HUBLI Page 18 . Bank‟s approach to operational risk managements designed to mitigate operational risk by maintaining comprehensive systemof internal controls. i n c l u d i n g f a i l u r e t o o b t a i n p r o p e r i n t e r n a l a u t h o r i z a t i o n s . f r aud . analyzing the impact of failures in systems. SUBSIDIARY COMPANIES DOMESTIC SUBSIDIARIES  ICICI Home Finance Company Limited GLOBAL COLLEGE OF MANAGEMENT & IT. so ft w ar e o r eq ui p m ent . adjustments to controls.

ICICI BANK  ICICI Investment Management Company Limited  ICICI Lombard General Insurance Company Limited  ICICI Prudential Life Insurance Company Limited  ICICI Securities Limited  ICICI Trusteeship Services Limited  ICICI Venture Funds Management Company Limited  ICICI Securities Primary Dealership Limited  ICICI Prudential Asset Management Company Limited  ICICI Prudential Trust Limited INTERNATIONAL SUSIDIARIES  ICICI Bank Canada  ICICI Bank Eurasia Limited Liability Company GLOBAL COLLEGE OF MANAGEMENT & IT. HUBLI Page 19 .

71% on the basis of weighted received premium. in view of business set-up and customer GLOBAL COLLEGE OF MANAGEMENT & IT.ICICI BANK  ICICI International Limited  ICICI Securities Holding Inc  ICICI Securities Inc  ICICI Bank Uk Limited ICICI PRUDENTIAL INSURANCE COMPANY ICICI Life continued to maintain its market leadership among private sector life insurance companies with a market share of 12. HUBLI Page 20 . Life insurance companies worldwide make losses in the initial years.

ICICI General is required to expense upfront.ICICI BANK acquisition costs in the i ni t i al ye a r s as w el l a s r es er vi n g fo r a ct ua ri al l i abi l i t y.5% over fiscal 2007. 543.3 1 b i l l i o n o n t h e Bank‟s consolidated profit after tax in FY2008 on account of the above reasons. on origination of a policy. 10 .9% during fiscal 2008. ICICI AMC achieved a profit after tax of Rs.54 billion as compared to Rs.7% over fiscal2007. a growth of 50. HUBLI Page 21 . 33. 8.The combined ratio is the sum of n et cl ai m s a nd ex pe ns es a s a pe r c ent a ge o f pr em i um s a nd i nd i ca t e s t he surplus generated on an annualized basis from the business written during a period (excluding investment income). GLOBAL COLLEGE OF MANAGEMENT & IT.82 billion in fiscal 2008. 0. all sitscing expenses related to the policy. ICICI General‟s gross written premium grew by 11.4% from Rs. 1.55 billion for March 2008. W hi l e t h e gr ow i n gop e r a t i ons o f IC IC I Li fe h ad a n e ga t i v e i m p a c t o f R s. a growth of 69.81 billion in fiscal 2007.30.45 billion in fiscal 2008. ICICI LOMBARD GENERAL INSURANCE COMPANY ICICI Lombard General Insurance Company (ICICI General) enhanced itsleadership position with a market share of about 29.03 billion in fiscal 2007 to Rs. While ICICI General‟s profit after tax for Rs. ICICI PRUDENTIAL AMC & TRUST ICICI Prudential Asset Management Company (ICICI AMC) was the secondl a r g e s t a s s e t m a n a g e m e n t c o m p a n y i n I n d i a w i t h a v e r a g e a s s e t s u n d e r management of Rs. the company‟s unaudited New Business Achieved Profit (NBAP) for FY2008was Rs.8% among private sector general insurance companies and an overall market share of about 11.03 billion in fiscal 2008. 12.

ICICI Securities achieved a profit after tax of Rs. ICICI Venture achieved a profit after tax of Rs. 0.70 billion in fiscal 2007 GLOBAL COLLEGE OF MANAGEMENT & IT. HUBLI Page 22 .50 billion and ICICI Securities Primary Dealership achieved a profit after tax of Rs.50 billion at year-end fiscal 2008. 1. 95.40 billion. in fiscal 2008. 1. ICICI VENTURE FUNDS MANAGEMENT COMPANY LIMITED IC IC I V e nt u r e F un d s M an a ge m e nt C om pa n y Li m i t ed ( IC IC I V e nt ur e ) s t re n gt h e n ed i t s l e a de rs hi p p os i t i on i n p ri va t e eq ui t y i n In di a. 0. wi t h f un ds und e r m an a ge m e nt o f ab o ut R s. IC IC I B r o ke r a ge S e r vi c es Li m i t e d h as b ee n renamed as ICICI Securities Limited and has become a direct subsidiary of ICICI Bank.ICICI BANK ICICI SECURITIES LIMITED The securities and primary dealership business of the ICICI group have been reorganised.90 billion in fiscal 2008 compared to Rs. ICICI Securities Limited has been renamed as ICICI SecuritiesP ri m ar y D e al e rshi p Li m i t e d.

ICICI BANK Awards in the Year 2011:  ICICI Bank was ranked 12th in the list of 500 largest companies by Fortune India. HUBLI Page 23 . The Bank was also ranked 18th in Twitter and 17th in Linked in list of India's top 25 companies leveraging social media by Fortune India  Ms. at the 10th Asia Business Leaders Awards (ABLA) by CNBC GLOBAL COLLEGE OF MANAGEMENT & IT. received the "Corporate Social Responsibility Award". Managing Director & CEO. Chanda Kochhar.

HUBLI Page 24 .ICICI BANK  ICICI Bank awarded "House Of The Year (India)". Former Chairman. Vaghul. by Business world TOOLS & ANALYSIS Ratio Analysis 1) Liquidity Ratio  Current Ratio = Current Asset Current Liability 2) Turn Over Ratio  Fixed Asset Turn Over Ratio = Net Sale F. for eighth time in a row since 2004  For second year in a row.A  Total Asset Turn Over Ratio = Net Sales Total Assets GLOBAL COLLEGE OF MANAGEMENT & IT. ICICI Bank. by Asia Risk magazine. received the "Lifetime Achievement Award". N. ICICI Bank was awarded the "Most Tech-Friendly Bank". by Business world  Mr.

HUBLI Page 25 .ICICI BANK 3) Leverage Ratio  Debt to Asset Ratio = Total Debt Total Assets  Debt to Equity = Total Debt Net Worth  Interest Coverage ratio = EBIT Interest 4) Profitability Ratio  Net Profit Ratio = PAT X 100 Sales  Returns on Assets = Net Income X 100 Total Assets  Return on Equity = Net Income Net worth GLOBAL COLLEGE OF MANAGEMENT & IT.

48 42.347.00 50.53 0.658.419.37 202.in Rs.00 24.35 406. Cr.03 281.68 1.114.43 379.016.18 363.33 29.00 0.883.00 48.463.746.00 350.29 0.43 310.88 GLOBAL COLLEGE OF MANAGEMENT & IT.12 Mar '07 12 mths 20.820.17 15.69 285.48 0.34 0.151.82 67.554.29 1.02 218.51 43.114.795.82 0.113.510.60 94.938.648.39 399.00 51.89 0.663.671.64 344.11 109.67 Mar '11 12 mths Assets Cash & Balances with RBI ------------------.462.00 350.413.82 0.399.19 51.431.00 53.89 1.151.986.156.28 335.300.895.34 899.96 Mar '09 12 mths Mar '08 12 mths 1.29 17.906.00 55.706.57 296.00 49.00 23.00 46.514.357.92 0.53 18.228.280.00 350.21 244.ICICI BANK 5) Valuation Ratio  Book Value of share = Net worth No.618.29 0.72 Mar '10 12 mths Mar '09 12 mths 1.68 0.323.256.112.08 Mar '08 12 mths Mar '07 12 mths 1. HUBLI Page 26 . of Equity Share 6) Intrinsic Value of Share = P/E ratio over the Years X EPS Balance Sheet Balance Sheet of ICICI Bank Mar '11 12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 1.090.82 1.377.39 15.97 27.22 38.503.263.501.079.536.249.26 230.05 65.766. ------------------Mar '10 12 mths 1.93 225.00 45.602.73 0.233.

63 399.443.90 134.71 694.75 4.597.09 3.70 5.114.84 6.60 120.663.05 7.11 371.795.925.66 16.55 8.452.170.93 0.21 4.62 0.377.18 29.16 2.210.962.34 7.92 36.03 0.864.36 17.974.14 3.31 22.50 1.774.931.159.57 1.00 2.901.00 8.12 3.71 444.744.43 3.082.205.157.15 2.737.685.758.108.14 1.533.60 225.363.31 7.359.19 23.801.96 803.300.375.03 0.594.865.13 -0.834.00 10.00 8.93 363.098.658.574.414.957.151.974.07 18.44 3. Cr.957.05 35.00 10.45 195.40 181.42 189.95 29.31 11.725.44 ------------------.18 1.426.24 2.22 0.399.00 20.23 417.86 1.430.93 7.999.971.50 2.09 2.484.02 Mar '07 12 mths 3.878.024. ------------------Mar '10 12 mths Mar '09 12 mths Mar '08 12 mths Mar '07 12 mths GLOBAL COLLEGE OF MANAGEMENT & IT. HUBLI Page 27 .183.27 22.00 293.117.300.214.36 177.58 2.27 27.809.80 7.11 4.380.078.678.93 3.054.67 883.23 218.347.780.221.84 38.48 619.00 10.365.32 0.616.849.78 3.17 3.00 998.72 678.592.717.900.35 3.110.436.47 406.73 0.76 39.788.931.26 344.056.08 111.96 16.01 12.00 16.32 30.ICICI BANK Balance with Banks.358.00 24.706.991.212.37 Mar '10 12 mths 4.06 478.34 8.47 Mar '08 12 mths 4.948.977.22 0.00 19.66 26.85 39.69 0.667.107.43 32.37 Profit & Loss A/c Profit & Loss account of ICICI Bank Mar '11 12 mths Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses 25.98 -0.11 216.108.13 562.90 5.642.24 16.292.81 28.79 6.816.58 Mar '11 12 mths Net Profit for the Year Extraordionary Items Profit brought forward 5.96 9.47 4.60 4.509.927.855.65 31.55 22.36 463.616.10 35.923.036.64 270.809.310.62 379.795.638.85 103.99 1.464.71 3.892.163.994.847.058.29 6.95 578.56 2.233. Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 13.94 8.26 0.38 25.89 0.93 1.60 91.67 544.785.298.in Rs.91 33.17 Mar '09 12 mths 3.257.38 -2.77 47.454.092.

867.57 --------28.018.403.34 4.647.01 3.603.34 8.ICICI BANK Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 8.27 998.116. ------------------- Mar '11 Sales Turnover Other Income Total Income Total Expenses Operating Profit Profit On Sale Of Assets Profit On Sale Of Investments Gain/Loss On Foreign Exchange VRS Adjustment Other Extraordinary Income/Expenses Total Extraordinary Income/Expenses Tax On Extraordinary Items Net Extra Ordinary Income/Expenses Gross Profit Interest PBDT Depreciation Depreciation On Revaluation Of Assets PBT Tax Net Profit Prior Years Income/Expenses Depreciation for Previous Years Written Back/ Provided 25.94 2.224.193.110.33 5.27 3.77 39.612.93 7.725.73 140.97 --5.729.696.54 16.32 5.28 44.501.923.24 --------22.592.04 36.613.in Rs.29 0.66 0.351.58 202.90 32.86 5.621.184.403.810.76 110.05 6.00 1.10 898.077.814.37 --------20.04 --3.42 0.11 11.66 Yearly Results Yearly Results of ICICI Bank ------------------.32 1.86 164.18 --------27.50 3.436.96 --------23.10 120.00 270.87 0.37 110.71 --6.21 33.31 0.788.24 5. HUBLI Page 28 .648.024.67 37.834.377.994.358.98 --- Mar '09 31.65 6.38 --- Mar '10 25.17 153.929.760.358.59 0.17 28.04 1.90 22.054.86 16.31 1.058.227.37 1.58 10.65 33.008.540.18 8.937.95 8.069.00 1.26 1.157.758.69 15.156.092.006.156.375.46 8.29 5.337.809.599.01 1.00 901.92 14.71 1.97 1.22 --- GLOBAL COLLEGE OF MANAGEMENT & IT.27 10.00 444.345.706.116.01 1.193.00 463.93 5.15 6.87 5.239.70 149.345.59 6.37 2.246.717.90 3.32 --5.834.613.64 1.55 7.342.37 4.13 --- Mar '08 30.57 5.58 151.10 --5.760.609.04 537.00 1.37 20.460.842.54 6.974.59 100.853.151.780. Cr.00 1.056.38 6.484.10 34.79 2.056.00 478.73 --- Mar '07 22.22 1.648.904.82 3.464.320.00 0.477.957.72 38.54 0.00 1.84 3.916.34 23.09 17.77 19.89 17.00 417.01 1.12 0.

579 2009 29966.56 67323.68 45.89 50.43 0.419.72 -1.69 0.29 48.08 109554.33 51256.53 10.73 10.13 65648.ICICI BANK Dividend Dividend Tax Dividend (%) Earnings Per Share Book Value Equity Reserves Face Value ---44.445 Year Ratio 0.34 23.48 10.00 ---37.82 53.37 -1.76 -1.28 0.503.03 0.00 Liquidity Ratio  Current Ratio = Table Particulars/Year Current Assets Current Liabilities Ratio 2007 37121.724 2008 38041.10 -1.114.00 ---33.311 0.58 -899. HUBLI Page 29 .113.412 2011 34090.579 0.413.311 Current Asset Current Liability Table No: 5 4 3 2 1 2004 2011 2010 2009 2008 2007 2006 0.412 0.357.112.938.57 0.151.724 2008 2010 2012 GLOBAL COLLEGE OF MANAGEMENT & IT.92 10.00 ---34.00 ---36.83 10.69 94263.445 2010 38873.

225 1.42 0. The above graph shows that the company‟s ability to payback has come down gradually.7 0.083 2009 31092.303 1.ICICI BANK Interpretation: Current Ratio shows the ability of the company‟s payback ability.076 2011 25974.34 370417.29 325951.085 2010 25706.  Turn Over Ratio  Fixed Asset Turn Over Ratio = Net Sale F.398 1.93 335885.215 1.54 0.070 2008 30788.55 361764.23 0.067 5 4 3 2 1 0 1.05 385326.A Particulars/Year Net Sales Fixed Assets Ratio 2007 22994.223 500 1000 1500 2011 2010 2009 2008 2007 2000 2500 Ratio Year GLOBAL COLLEGE OF MANAGEMENT & IT.63 0. the higher the current ratio more capable is the company to payback its short term liabilities. HUBLI Page 30 .

From the above graph it can be observed that the company has a fluctuating ratio which means its efficiency is varying.05 406233.ICICI BANK Interpretation: This ratio helps to measure the ability to generate the net sales by investing in fixed asset.07 0.077 2009 31092.223 1000 2011 2010 2009 2008 2007 2000 3000 Ratio Year GLOBAL COLLEGE OF MANAGEMENT & IT.063 5 4 3 2 1 0 1.71 0.215 1.93 363399.070 2011 25974.303 1.34 399795.066 2008 30788. higher the ratio more capable is the company to generate the net sales.398 1.081 2010 25706.29 344658.  Total Asset Turn Over Ratio = Net Sales Total Assets Particulars/Year Net Sales Total Assets Ratio 2007 22994.96 0.67 0.225 1.55 379300. HUBLI Page 31 .11 0.

companies with low profit margins tend to have high asset turnover. while those with high profit margins have low asset turnover from the above graph it can be observed that the company has performed well in the year 2009 and rest of the years its fluctuating.ICICI BANK Interpretation: This ratio measures the firm‟s efficiency to use the assets in generating sales. HUBLI Page 32 .39 406233.753 2010 296280.67 0.22 344658.71 0.48 399795.815 2011 335156.817 2008 310079.825 GLOBAL COLLEGE OF MANAGEMENT & IT.775 2009 285671.51 379300.11 0.17 363399.07 0.96 0.  Leverage Ratio  Debt to Asset Ratio = Total Debt Total Assets Particulars/Year Total Debt Total Assets Ratio 2007 281766.

225 1.22 24663.21 6.083 GLOBAL COLLEGE OF MANAGEMENT & IT.424 2008 310079.26 11.215 1.726 2010 296280.  Debt to Equity = Total Debt Net Worth Particulars/Year Total Debt Net Worth Ratio 2007 281766.48 46820.17 51618.93 6.303 1.398 1.51 49883. higher the ratio more is the company having debt.ICICI BANK 5 4 3 2 1 0 1. HUBLI Page 33 . By the above calculation it can be noted that the ratio is fluctuating.02 5.39 55090.223 500 1000 1500 2011 2010 2009 2008 2007 2000 2500 Ratio Year Interpretation: This ratio is used to measure a company's financial risk by determining how much of the company's assets have been financed by debt.622 2009 285671. The company was good enough in the year 2008 and 2009.37 5.739 2011 335156.

398 1.24 1.223 2008 2010 2012 2014 Year Ratio Interpretation: It indicates what proportion of equity and debt the company is using to finance its assets. but in the year 2011 its in a uptrend.54 16358.15 1.  Interest Coverage ratio = EBIT Interest Particulars/Year EBIT Interest Ratio 2007 20006.57 1.93 1. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt.89 17592. HUBLI Page 34 .215 1.215 2009 27842.225 2010 22937.86 16957. from the above observation it can be noted that the company had a good result in the year 2007 and it gradually went on decreasing.ICICI BANK 5 4 3 2 1 2004 2011 2010 2009 2008 2007 2006 1.303 2011 23717.50 1.225 1.90 22785.303 1.398 GLOBAL COLLEGE OF MANAGEMENT & IT.34 23484.223 2008 28540. The ideal ratio for this is more than 5.

The lower the ratio.34 2009 3758.29 2008 4157.215 1.398 1. When a company's interest coverage ratio is below 1 the company is not generating sufficient revenues to satisfy interest expenses.93 2011 5151.55 2010 4024. the more the company is burdened by debt expense.ICICI BANK 5 4 3 2 1 2004 2011 2010 2009 2008 2007 2006 1.13 31092. From the graph it can be noted that the company is generating sufficient revenues and it is improving year on year.05 Page 35 GLOBAL COLLEGE OF MANAGEMENT & IT.303 1.225 Year Ratio 1.98 25706.38 25974. HUBLI .  Profitability Ratio  Net Profit Ratio = PAT X 100 Sales Particulars/Year PAT Sales 2007 3110.22 22994.73 30788.223 2008 2010 2012 2014 Interpretation: This ratio is used to determine how easily a company can pay interest on outstanding debt.

11 399795. Higher the net profit margin.787 274. adequate is the return to the owners.46 344658.71 2011 32621.237 500 1000 1500 2011 2010 2009 2008 2007 2000 2500 Ratio Year Interpretation: This ratio measures the management‟s ability to operate the business with sufficient success and to leave a margin of reasonable compensation to the owners.504 12.96 2010 33184.99 448.11 2008 39599.832 5 4 3 2 1 0 478.07 2009 38696.  Returns on Assets = Net Income X 100 Total Assets Particulars/Year Net Income Total Assets 2007 28923. from the above graph it can be seen that it has a gradual increase in all the years except in the year 2009.526 13.657 19. HUBLI .086 15.294 462.27 379300.ICICI BANK Ratio 13.95 406233.068 420.67 Page 36 GLOBAL COLLEGE OF MANAGEMENT & IT.58 363399.

95 Page 37 GLOBAL COLLEGE OF MANAGEMENT & IT.030 5 4 3 2 1 0 2011 2010 2009 2008 2007 1000 478.068 420.ICICI BANK Ratio 8. the more cash the company has available for reintegration into the company.201 9.237 2000 3000 Year Ratio Interpretation: This ratio used to compare a business‟s performance among other industry members.131 8.294 462.11 2009 38696.391 9. The study reveals that the company had a good returns on asset ratio in the year 2009 but in general its fluctuating.787 274.99 448. HUBLI .46 2008 39599. whether it be in upgrades.58 2011 32621.27 2010 33184. the higher the ratio.  Return on Equity = Net Income Net worth Particulars/Year Net Income 2007 28923.904 10. replacements or other areas.

26 1.ICICI BANK Net Worth Ratio 24663.02 0. of Equity Shares Particulars/Year Net Worth 2007 24663.845 49883. 7) Valuation Ratio  Book Value of share = Net worth No.93 0.93 Page 38 GLOBAL COLLEGE OF MANAGEMENT & IT.37 0. The graph shows that the company was much profitable in the year 2007 and less in the year 2011 with the shareholders money.26 2008 46820.37 2011 55090.642 55090.237 2000 2500 Year Ratio Interpretation: Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. HUBLI .787 274.21 0.775 51618.294 462.592 5 4 3 2 1 0 500 2011 2010 2009 2008 2007 1000 1500 478.99 448.068 420.02 2010 51618.21 2009 49883.172 46820.

237 111.329 448. HUBLI .182 478.237 500 1000 1500 2011 2010 2009 2008 2007 2000 2500 Ratio Year Interpretation: By the above graph we can understand that the ratio has increased year on year and a positive sign to the company.990 115.068 420.294 5 4 3 2 1 0 478.489 462.934 No.ICICI BANK 89.787 274.99 448.37 417.268 420.294 462.787 111.94 Page 39 GLOBAL COLLEGE OF MANAGEMENT & IT.64 444. of Equity Shares Ratio 274. 8) Intrinsic Value of Share = P/E ratio over the Years X EPS Year 2007 2008 2009 P/E Ratio 270.068 111.

While steel continues to have a stronghold in traditional sectors such as construction.31 463.01 478. HUBLI Page 40 . special GLOBAL COLLEGE OF MANAGEMENT & IT.94 417. Consumption of steel is taken to be an indicator of economic development.31 5 4 3 2 1 0 478.01 444.37 500 1000 1500 2011 2010 2009 2008 2007 2000 2500 P/E Ratio Year Interpretation: By the above graph it can be noted that the ratio has gradually increased every year and a positive sign to the company. Industry Analysis INTRODUCTION TO THE STEEL INDUSTRY India‟s economic growth is contingent upon the growth of the Indian steel industry.64 270. housing and ground transportation.ICICI BANK 2010 2011 463.

Given the strong demand scenario. Therefore. at around 46 kg. Therefore. is well below the world average (150 kg) and that of developed countries (400 kg). either through brownfield or greenfield route. Further. growth in India is projected to be higher than the world average.5 million tonnes to the existing capacity of 55 million tonnes. as the per capita consumption of steel in India. most global steel players are into a massive capacity expansion mode. with the establishment of new state-of-the-art steel mills. etc. GLOBAL COLLEGE OF MANAGEMENT & IT. one may not expect complex competition issues as those witnessed in industries like telecom. Even the government policy restrictions have been negligible worldwide and even if there are any the same to respond to specific conditions in the market and have always been temporary. Steel production in India has increased by a compounded annual growth rate (CAGR) of 8 percent over the period 2002-03 to 2006-07.7 million tonnes. acquisition of global scale capacities by players. HUBLI Page 41 . While greenfield projects are slated to add 28. India occupies a central position on the global steel map. brownfield expansions are estimated to add 40. the industry in general and at a global level is unlikely to throw up substantive competition issues in any national policy framework. electricity. the steel production capacity in India is expected to touch 124 million tonnes and 275 million tonnes by 2020. continuous modernisation and upgradation of older plants. improving energy efficiency and backward integration into global raw material sources. Steel is manufactured as a globally tradable product with no major trade barriers across national boundaries to be seen currently. Indian demand is projected to rise to 200 million tonnes by 2015. oil.ICICI BANK steels are increasingly used in engineering industries such as power generation. petrochemicals and fertilisers. Going forward. By 2012. natural gas. there are no natural monopoly characteristics in steel. There is also no inherent resource related constraints which may significantly affect production of the same or its capacity creation to respond to demand increases in the global market.

Section 4 of the report examines issues of competition of steel industry in India. Given the heterogeneous nature of the product this analysis is done for the various segments of steel that constitute the “relevant market”. The fact that internationally steel has always been an oligopolistic industry. GLOBAL COLLEGE OF MANAGEMENT & IT. On the other hand the set of large firms that characterize the industry has been changing over time. by identifying the structurally inherent and the market determined positions of various steel firms specifically to see their market power. The growing consolidation in the steel industry worldwide through mergers and acquisitions has already thrown up several significant concerns. does not mean that there is no relevant or serious competition issue in the steel industry. HUBLI Page 42 . Trade and other government policies have significant bearing on competition issues. share of public and private players in the total production/sales.ICICI BANK This. production capacity of major players. Matters of subsidies. may bring in significant distortions in the domestic market and in the process alter the competitive positioning of individual players in the market. Market structure is analyzed using indicators such as number of players and their respective shares in total production. discriminatory customs duty (on exports and imports) etc. however. This analysis is a precursor in identifying segments where competition may be an issue of concern to allow for a pointed analysis. The specific role of the state in creating market distortion and thereby the competitive conditions in the market is a well-known issue in this country. This report proceeds as follows. non-tariff barriers to trade. sometimes has raised concerns about the anticompetitive behavious of large firms that dominate this industry. Section 3 of the report documents policy and institutional structure governing the steel industry in India and the role played by the Government in the development of this industry. vis-à-vis both their final consumers as also those within the steel industry. Section 2 of the report provides a brief over view of the performance and structure of the Indian steel industry by analysing published secondary time series data on certain key indicators. etc.

to support growth of a particular industry. thus leading to a slowdown in the demand for steel. III and IV provide data on the sector. These preferential policies and their impact on competition are also analysed in this section. have witnessed a significant decline in activity. The other issue of significant importance in the context of competition is the command over natural resources that a few players possess and 2 that enable a significant cost advantage over the rest in the market. which in turn leads to action by the incumbents that look like. and briefly discuss international conditions. Section 5 concludes with a discussion on state of the competition in the Indian steel sector pointing to a few key recommendations for the Competition Commission of India. but is not. and provide an historical overview.ICICI BANK The issues emerging out of the size and market shares. Appendix I. HUBLI Page 43 . These are the result of government policies of the past. anti-competitive behaviour. and slow responsiveness to changing conditions has contributed to shortages in the past. II. as well as export/import curbs. are the key issues affecting the creation of a level playing field. With the advanced economies going into a GLOBAL COLLEGE OF MANAGEMENT & IT. The construction and automobile sectors. It finds that government intervention. International steel HRC prices have plunged 40–50% from their highs to USD 600–700 per ton. It is the last two as well as ready availability of information on costs and prices across the value Chain that could warrant some action by the regulator. infrastructure development activities and consumer spending have been adversely affected. Unequal access to raw material. This study finds little evidence of any cartelization or joint pricing behaviour on the part of the incumbents. Economic Analysis Steel prices expected to decline further: Due to the downturn in the global economy and the slowdown in credit growth. which are major consumers of steel. specifically taking into consideration the investment aspects are also discussed in this section.

we believe the decline in realizations will be restricted for JSPL as it stays focused on value-added products. It is proposing to invest Rs 50-60 crore in a phased manner for establishing the reserve position before making any commitments towards production of the precious stone. It is carrying out a survey. In this connection.  Investment in Orissa: In order to maintain leadership in the field of sponge iron. and renewed thrust to clear the 12. With an annual turnover of over US $2. the company will take up mining of diamonds and enter into JV agreement. However. As a result. HUBLI Page 44 .50. power and steel. Power Generation and Infrastructure. the company plans to invest in the State of Orissa. JSPL is a part of the about US $ 15 billion diversified O. Company Profile Jindal Steel and Power Limited (JSPL) is one of India‟s major steel producers with a significant presence in sectors like Mining.9 billion.500 kms (3000 kms p. This steep rise in demand would be driven by setting up the Rs 170 bn Railway Safety Fund. Future Plans:  As a forward integration.a) backlog of track renewal. which has adequate reserves of iron ore and coal. The project should translate into significant gains for JSPL as demand for rails is expected to rise by 2. and only after detailed investigation whether the deposits are commercially viable. Foreign giants De Beers and BHP has shown keen interest in joining hands with the company for a JV deal. it plans to sign MOU with Government of Orissa.P Jindal Group and is consistently tapping new opportunities by increasing GLOBAL COLLEGE OF MANAGEMENT & IT. Jindal Steel and Power Ltd. JSP is setting up a Railway and Universal Beam Mill (RUBM) to produce the world‟s longest (120 mtrs) rails. Diamond Exploration:  JSPL has applied for reconnaissance permit for undertaking exploration for diamonds in the state of Chhattisgarh.000 tpa for next 5 years. demand for steel is not expected to improve in the near term.ICICI BANK Recession and the emerging economies slowing down. we expect steel prices to fall further in the coming months.

he started Pipe Unit Jindal India Limited. diversifying investments. much of his assets were transferred to his wife. Chhattisgarh. His elder brother.000 strong. From the widest flat products to a whole range of long products. one of the earlier incarnations of his business empire. Jharkhand and a one million tone capacity bar mill. The company is also involved in power generation. HUBLI Page 45 . Sajjan Jindal. Savitri Jindal. Jindal Group. JSPL today sports a product portfolio that caters to varied needs in the steel market. The company has scaled new heights with the combined force of innovation. part of O. Jindal Group's management was then split among his four sons with Naveen Jindal as the Managing Director of Jindal Steel and Power Limited. In 1969. hot rolled plates and coils and coal based sponge iron plant.iron ore. an influential body of the chambers of commerce. mild steel.P. And the recognition it has received only further GLOBAL COLLEGE OF MANAGEMENT & IT. The company manufactures and sells sponge iron. committed workforce. mild steel slabs. Jindal (1930–2005). JSPL operates the largest coal . P. and leveraging its core capabilities to venture into new businesses. The company produces economical and efficient steel and power through backward integration from its captive coal and iron-ore mines. Jharkhand and a medium and light structural mill at Raigarh. adaptation of new technology and the collective skills of its 15. Jindal Steel and Power is a part of the Jindal Group.based sponge iron plant in the world and has an installed capacity of 3 MTPA of steel at Raigarh in Chhattisgarh. The company also has the distinction of producing the world‟s longest 121 metre rails and introducing large size parallel flange beams in India.6 MTPA wire rod mill and a one million tone capacity bar mill at Patratu.ICICI BANK production capacity. and the head of JSW Group. After Jindal's death in 2005. ferro chrome. With a 0. Jindal Steel and Power Limited is the third largest steel producer in India. is currently the head of ASSOCHAM. founded by O. structural. The enterprising spirit and the ability to discern future trends have been the driving force behind the company‟s remarkable growth story.

through sustainable development approaches and inclusive growth. JSPL endeavors to strengthen India‟s industrial base by aiding infrastructural development. 2009 and 2010. With the development rights for 20 billion tonne of El Mutun Iron Ore Reserves in Bolivia. Bolivia granted development rights for one of the world's largest iron ore reserves in the El Mutún region to Jindal Steel. The company continues to capitalize on opportunities in high growth markets. 11th fastest growing company in India by Business World. HUBLI Page 46 . sanitation.ICICI BANK lends credence to this. 2006. 6 MTPA Sponge Iron plant. 10 MTPA Iron Ore Pellet Plant and 450 MW power plant in the South American nation. expanding its core areas and diversifying into new businesses. The company deploys its resources to improve infrastructure. As JSPL contributes to India‟s growth. JSPL plans to invest US$ 2. P. JSPL has recently been rated as the second highest value creator in the world by Boston Consulting Group. education. included in one of the Fab 50 Companies by Forbes Asia. water. GLOBAL COLLEGE OF MANAGEMENT & IT. MISSION AND VALUES VISION To be globally admired organization that enhances the quality of life of all stakeholders through sustainable industrial and business development. Savitri Jindal.7 MTPA Steel Plant. in the areas it operates in. The future is studded with challenges and JSPL is taking them on with vigor and courage. it has also set in place a global expansion plan in order to become one of the most prestigious and dynamic business groups in the World. is ranked as the 19th richest Indian person according to Forbes. On June 3. the widow of O. VISION. environment etc.1 billion in the next few years on mining and on setting up an integrated 1. health. The company has won several awards for its innovative business practices. Jindal.

Business excellence Integrity. Positive impact on the communities we touch.9% quarter-on-quarter to Rs9.9bn. HUBLI Page 47 . developing and retaining the best people. EBIT margins for the steel business increased from 31. GLOBAL COLLEGE OF MANAGEMENT & IT. Hiring.4%. marginally lower than our estimate of Rs9.ICICI BANK MISSION        The spirit of entrepreneurship and innovation Optimum utilization of resources.4% to 36. VALUES     Passion for people. Maximization returns to stakeholders. Sustainable environment friendly procedures and practices The highest ethics and standards.6bn. On a segmental basis.8% in first quarter of financial year 2012 and that of the power division declined sharply from 46. Operating Profit Margin decreased 86bps quarter-on-quarter to 38% in first quarter of financial year 2011 on account of higher coal cost and subdued long steel prices. ownership and sense of belonging Sustainable development PRESENT MARKET POSITION OF JINDAL STEEL AND POWER LIMITED Jindal Steel and Power Limited is the third largest steel producer in India. Operating profit decreased 9.1% in fourth quarter of financial year 2011 to 31.The underperformance in operating profit was on account of lower than expected steel sales volume.