While dealing with all the problems, they failed to realize the main reason of their downfall.

The labourers being the backbone of the plant and the Ramlal industries ignored all their
demands. As a result, labours went on strike and started bad mouthing about the company
in the market which harmed the goodwill of the ramlal. By the time Ramlal industries
realized that it wasn’t a casual strike, the case was already lodged against manager in labour
court and Mr. Amarnath, workers’ leader presented the case and the petition was filled and
delivered to organization’s head office in lower parel. Adding to the long list of mistakes,
company sent their lowermost employee Mr. Shyam to deal with the case. Shyam, in
Ramla’s defence denied the accusations alleged on Ramlal, further adding that the labours
were lying because they wanted hike in wages. This added as the fuel in the fire, as the
lawyer who was favouring labourers asked for the value sheet which incorporates the
labour welfare costs which wasn’t entered in their cost sheet. Not having anything to
defend ramlal forfeited the case because the report generated were monthly and will not be
tempered. This all has affect the Ramlal’s image in the market in a very negative way.

The company having already faced an honest setback further ruined its workflow by
investing in areas without prepartions and less knowledge. The company set their foot in
real estate sector by acquirring a poster property in lower parel which costs them fortune.
They also entered retail market with the name of “HULU” stores in india and “Happy” stores
in UK, but due to train of losses, operation inefficiency led to the closure of half if them.

The pile of problems kept on increasing for Ramlal industries as the loans they have
borrowed to support all their investments kept on growing and by 2013 they’re paying 13
percent as interest on borrowed loans from 7.5 percent.
Ramlal industries had debts of about 30000 crores and this put them in the radar of RBI.

Ramlal industries was declared insolvent and NCLT requested plans, and Urgunil and LA
financial asset reconstruction company placed a bid for the same.
NCLT rejected the claims as very less percentage of creditors backed it, as they wanted
minimum 75 percent return. As a result company got liquidated.

To get back on track the very first step they took is to compensate the workers with 50
percent of the actaual wages they used to pay and also make company sing the petition that
no matter the financial status of the company, labour’s wages should be the primary
concern.

Urgunil moved the NCLT to reconsider the decision and at last the threshold was reduced to
66 percent. The Ahmedabad bench in 2019 finally gave the bid to urgunil and LA, which
submitted a plan of 5000 crores and this was the twist in the fortunes of ramlal industries.

As per the plan Urgunil infused the amount and acquired the 37.7 percent stake of the
company. By early 2020, the company generated a very high return of 822 percent.
During the period of reconstructing the prices were less than 14 rupees which rise upto 36
rupees now.
CONCLUSION

This instance of ramlal industries allowed us to see how vital communication is in times of
crisis and how lack of communication can lead to an organization’s demise.

We may also deduce from the scenario that how vital it is to conduct market research and
get adequate knowledge before making investments, and how poor investments can result
into massive debts.

However, Urgunil’s acquisition of ramlal industries resulted into a fortune for them, as the
firm has successfully completed the reconstruction and doing well in the market, indicating
that it would be soon placed on the ladder of prosperity and success.