Showing posts with label Indian. Show all posts
Showing posts with label Indian. Show all posts

Tuesday, December 04, 2012

Investors are the first among equals

His mantra is that through strategic CSR, companies can create win-win situations for one and all. However, L.N.Mittal reiterates that the company’s main responsibility is towards its shareholders; as told to B&E’s Ruchika Chawla

Lakshmi Niwas Mittal, aka one of the “100 Most Influential People” (Time magazine 2007) and the richest Indian in the world, according to Forbes in March 2008, is known as the man behind ArcelorMittal, the world’s largest steel company; which he has built step by step, acquisition after acquisition, with an exceptional entrepreneurial zeal.

The pinnacle of Mittal’s achievements thus far has been the merger of Mittal Steel with Arcelor S.A. to form ArcelorMittal, which, besides enhancing steel production capacities, enabled the two companies to leverage on their largely complementary strengths in terms of steel products. Yet this is not another chronicle on the way ArcelorMittal dominates the global steel industry. In this exclusive one on one with B&E, Mittal discusses a more delicate issue, which should ideally be on the agenda of every billionaire in the world. Corporate Social Responsibility seemed to be a ‘fad’ in its earlier times, but has begun to mature and take precedence, as more prominent and world renowned figures play a major role in it; and not just for the “tax-break” but also for the betterment of the world we live in.

For Mittal, good CSR is always strategic, and he believes that a business has to create a win-win situation for all its stakeholders. A few excerpts... B&E: What is your opinion on the concept of Creative Capitalism, which is being mooted by Bill Gates? Do you agree that CSR only makes sense when it is strategic in nature? LNM: I like Bill Gates’ concept of Creative Capitalism. The reality is that capitalism has positively impacted the lives of hundreds of millions of people. But many more have not been included. We should look at ways in which we can take the benefits of capitalism and extend them to the benefit of those who have missed out. Good corporate responsibility is always strategic. For me it is implicit in the phrase. As opposed to charitable contributions which are not necessarily strategic. There is a place for both in modern society.


Source : IIPM Editorial, 2012.An Initiative of IIPM, Malay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.

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Saturday, August 25, 2012

THEORY ‘I’ OF M&AS

The how, when, why, wherefrom of what all we undertook in this mammoth M&A analysis of Indian cases ranging from the year 2000-2006
Now the tough read! The methodology adopted during the study was empirical, with broad usage of deductive and cognitive reasoning. The study tests the hypothesis on a factor-by-factor analysis. The study was divided into three phases. In phase I, the analysis of shareholder value change using market capitalisation values was undertaken. In Phase II, analysis of shareholders’ value change using the Tobin’s q factor value was conducted [Tobin’s q is the ratio of the market value to book value of a firm’s assets (also known as replacement cost) where market value is the sum of the book value of long term debt and the market value of equity (m-cap)]. In phase III, analysis on the basis of revenue and profit was performed. Within the overall analysis, we’ve considered different deal sizes (three in case of Indian firms acquiring Indian firms: less than $10 million deal value, between $10-50 million deal value, greater than $50 million deal value) (three again in the case of Indian firms acquiring foreign firms: less than $50 million, between $50-250 million, and greater than $250 million).

If T is year in which the acquisition took place, then the results in each of the scenarios and levels have been analysed for four time periods, or event windows (EWs) – the first (EW1) being the period T-1 to T+1 (where T+1 and T-1 represent one year durations, plus and minus) the second (EW2) being in the period T-2 to T+2, the third (EW3) being in the period T to T+1 and finally the fourth (EW4) one corresponding to the period T to T+2. And finally, to make it more complicated for the finance-nerds, we’ve thrown in a few summary tables. Where will you find the comprehensive research? Our website of course (www.businessandeconomy.org). As the saying goes, more of that later. Enjoy the experience...


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