Tata Steel Complete Financial Model

Tata Steel Limited-FPOOpen Source Financial Model

ContactAnil Bains

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Anirudh Gandhi

+91 9870083227

Paramdeep Singh

+91 9892980608

Pawan Prabhat

+91 9867625422

Special Thanks to:Kushal Bhagat

+91 9717483505 © Neev Knowledge Management - Pristine

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Pristine is India's largest authorized training provider for CFA®, FRM®, PRM and Financial Modeling. It has conducted more than 300,000+ man-hours of finance trainings for individuals and corporates in all the major Indian cities and outside India.

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, PRM and Financial Modeling. It has conducted more than 300,000+ man-hours of finance trainings for individuals and corporates in all the major


Tata Steel, the seventh-largest player in the global steel industry,is attempting to take advantage of strong domestic demand from user industries by expanding its capacities here.In India, the total steel output grew 7.4% year-on-year during the first 11 months of the calendar year 2010,which is the fastest in BRIC countries, according to the global industry body. This pace of growth is expected to continue over the next few years. To part finance the expansion plan, Tata Steel is coming out with its FPO aggregating nearly 3,385 crore, which has generated enormous interest in the investor community (both retail and institutional). Many potential investors want a financial model in MS Excel© which can help them in a thorough analysis of the company. Creating such models have always been a time-taking and daunting exercise.

Pristine has created an integrated valuation model based on publically available information. It is available as an open-source model for any user. Kindly note that this model is meant for information purpose only.

The complete structure of the model and formulas, linkages etc. have been kept open to allow for any modification on the part of the user.

Pristine conducts extensive trainings for financial modeling in MS Excel©. These trainings are targeted towards investors/ professionals who are looking for a career in finance (Investment Banking, PE, Broking, Equity Research, etc.). At the completion of the trainings, the participants should be able to create models like these.

For more information you can contact the authors or Pristine.

[email protected]





Tata Steel, the seventh-largest player in the global steel industry,is attempting to take advantage of strong

In India, the total steel output grew 7.4% year-on-year during the first 11 months of the calendar year 2010,which is the fastest in BRIC countries, according to the global industry body. This pace of growth is expected to continue

To part finance the expansion plan, Tata Steel is coming out with its FPO aggregating nearly 3,385 crore, which has generated enormous interest in the investor community (both retail and institutional). Many potential investors

which can help them in a thorough analysis of the company. Creating such

Pristine has created an integrated valuation model based on publically available information. It is available as an open-source model for any user. Kindly note that this model is meant for information purpose only.

The complete structure of the model and formulas, linkages etc. have been kept open to allow for any modification

. These trainings are targeted towards investors/ professionals who are looking for a career in finance (Investment Banking, PE, Broking, Equity Research, etc.). At the completion of the trainings, the participants should be able to create models like these.

Pristine is India's largest authorized training provider for CFA®, FRM®, PRM and Financial Modeling. It has conducted more than 300,000+ man-hours of finance trainings for individuals and corporates in all the major

INDEX1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Summary SheetDuPont AnalysisAssumption SheetProfit & Loss AccountBalance SheetCash FlowReserves & SurplusDebt ScheduleAsset ScheduleValuation

Year FY 07A FY 08A FY 09A FY 10A FY 11E FY 12E

Asset 166,307 200,838 962,294 994,587 972,890 1,014,890

Cash Flow From OperationsCash Flow From Investing (185,401) (832,957) (36,174) 32,817 (117,567) (69,242)

Cash Flow From Financing 217,574 408,364 (41,123) (89,072) 27,632 (30,323)

Net Income 41,390 74,845 35,042 (20,147) 71,717 71,797

FY 06A FY 07A FY 08A FY 09A FY 10A FY 11A FY 12A FY 13A FY 14A FY 15A FY 16A

(1,000,000)

(500,000)

-

500,000

1,000,000

1,500,000 Tata Steel Limited

Asset Cash Flow From InvestingCash Flow From Financ-ingNet IncomeCash Flow From Opera-tions

Year

INR

Mill

ions

FY 13E FY 14E FY 15E

1,040,640 1,040,640 1,040,640 1

0

(52,929) (7,909) (37,335) 1

(19,423) (19,423) (19,423) 1

85,683 94,380 117,577 1


(1,000,000)

(500,000)

-

500,000

1,000,000



Year

INR

Mill

ions


(1,000,000)

(500,000)

-

500,000

1,000,000



Year

INR

Mill

ions

Assets

CFF

CFI

CFO

Net Income

DuPont Analysis

Sales 1,050,259

-

Inc

om

e S

tate

me

nt

Cost of Sales

440,163 68,625

-

divided by

477,361

-

Interest Expense Sales

31,365 1,050,259

-

Tax Expense

30,304 -

Exceptional Items

-

Others

2,441

Sales 1,050,259

divided by

Current Assets

515,036 Total Assets

+ 1,245,487

Ba

lan

ce

Sh

ee

t

730,451

Earnings Available

Operating Expense

Net Fixed Assets (PPE)

Ba

lan

ce

Sh

ee

tTotal Liabilities 950,867

Current Liabilities

384,863 +

+

Long Term Debt

566,004

294,620

Stockholder Equity (SE)

DuPont Analysis

Net Profit Margin

6.5%

multiplied by

5.5%

0.84

multiplied by

23.3%

Return on Total Assets (ROA)

Total Asset Turnover

Return on Common Equity

(ROE)

1,245,487

divided by

4.23

294,620

Total Liab + SE = Total Assets

Financial Leverage multiplier

Common stock equity

Assumptions

(Unless otherwise specified, all financials are in INR Million) FY 06A FY 07A

P&L Assumptions

Sales and Other Operating Income Growth Rate Scroll Bar 23%

Excise Duty as % of Sales CAGR 8%

Other Income Growth Rate Scroll Bar 53%

Cost of Material as % of Sales Scroll Bar 33%

Provisions for Employees as % of Revenue CAGR 7%

Manufacturing, Selling and Other Expenses as % of Sales CAGR 26%

Restructuring Cost as % of Sales Scroll Bar 0%

Contribution for Sports Infrastructure as % of Sales Scroll Bar 0%

Exchange Gain as % of Sales Scroll Bar 0%

Acturial Gain as % of Sales Scroll Bar 0%

Current Tax as % of Profit Before Tax Scroll Bar 34%

Changes in Accounting Policies as % of Sales Scroll Bar 0%

Prior Period Adjustments As % of Sales Scroll Bar 0%

Tax Impact of Adjustments as % of Sales Scroll Bar 0%

Minority Interest as % of Sales CAGR 0%

Share of Profit of Associates as % of Sales CAGR 0%

Balance Sheet

CWIP as % of Sales Scroll Bar 12%

Inventory No. of days Scroll Bar 132

Debtor No. of Days CAGR 19

Loans and Advances as % of Sales CAGR 7%

Minority Interest as % of Gross Block CAGR 3%

Creditor No of days Scroll Bar 160

Advances as % of Sales CAGR 1%

Investments Growth Rate Scroll Bar 374%

FY 08A FY 09A FY 10A FY 11E FY 12E FY 13E FY 14E

FY 03A FY 06E FY 08E FY 08E389% 12% -31% 3% 6% 8% 8%

FY 06A2% 2% 2% 3% 2% 2% 2%

FY 10A FY 10E FY 10E FY 10E122% -44% 346% 10% 10% 10% 10%

FY 41A FY 41E FY 41E FY 40E45% 49% 42% 41% 41% 41% 40%

FY 10A FY 15E FY 15E FY 15E13% 12% 16% 12% 13% 13% 14%

29% 24% 32% 28% 28% 28% 29%

0% 0% 3% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

0% 4% 0% 0% 0% 0% 0%

3000% 3000% 3000% 3000%33% 18% 126% 30% 30% 30% 30%

-4% -1% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

0% 0% 0% 0%

0% 0% 0% 0% 0% 0% 0%

12 14 16 14 7% 6% 9% 12% 14% 16% 14%

16 16 16 16 82 112 167 160 160 160 160

35 34 35 3528 38 43 32 35 37 37

3812% 9% 7% 9% 9% 8% 8%

391% 1% 1% 1% 1% 1% 1%

20 20 20 2093 119 181 200 200 200 200

38 0 0 00% 0% 1% 1% 0% 0% 1%

20 20 20 20-80% 90% -15% 20% 20% 20% 20%

FY 15E

FY 08E8%

3%

FY 10E10%

FY 40E40%

FY 15E13%

28%

0%

0%

0%

0%

3000%30%

0%

0%

0%

0%

0%

0%

14 14%

16 160

3535

8%

1%

20200

01%

2020%

Income Statement


IncomeSales and Other Operating Income 222,682 274,421Less: Excise Duty 19,500 22,249Net Income from Operations 203,182 252,172Other Income 1,402 2,146

Total Income 204,584 254,317

Expenditure 81,776 97,541Cost of Material 67,107 91,769Accreation/(Reduction) in Stocks (470) (5,402)Payment to and Provisions for Employees 17,267 20,380Manufacturing, Selling and Other Expenses 56,376 72,454Finance Charges 551 1,877Depreciation 8,604 10,110

Total 149,434 191,187

Net Profit Before Tax & Exceptional Items 55,150 63,130Exceptional Items

Restructuring Cost - -Contribution for Sports Infrastructure - -Exchange Gain - -Acturial Gain - -

Total - -

Provision of TaxCurrent Tax 16,200 21,455Deferred Tax 1,450 (155)Fringe Benefit Tax 290 174

Total 17,939 21,474

Net Profit After Tax (Before Adjustments) 37,211 41,656Adjustments

Changes in Accounting Policies - -Prior Period Adjustments (428) (582)Tax Impact of Adjustments 144 196

Total (284) (386)

Net Profit/(Loss) After Adjustments 36,927 41,270

Less: Minority Interest 191 672Add: Share of Profit of Associates 322 792

Profit / (Loss) as Restated 37,057 41,39037,057 41,390

Balance Brought Forward from Previous Year 19,861 33,349

Balance Available for Appropriation 56,918 74,739

AppropriationProposed Dividends on Prefernce Shares - -Proposed Dividends on Ordinary Shares 7,186 9,429Tax on Dividends 1,034 1,634General Reserve 15,287 15,247Special Reserve 62 40Debenture Redemption Reserve - -Statutory Reserve - -

Total Appropriation 23,569 26,349

Balance Carried to Balance Sheet 33,349 48,390


1,340,868 1,499,849 1,042,298 1,073,567 1,137,981 1,229,020 1,327,34125,531 26,557 18,367 36,352 25,101 28,036 31,973

1,315,336 1,473,293 1,023,931 1,037,215 1,112,880 1,200,984 1,295,3684,759 2,657 11,859 13,044 14,349 15,784 17,362

1,320,095 1,475,949 1,035,790 1,050,259 1,127,229 1,216,767 1,312,730

576,595 605,293 547,506 477,361 521,087 559,088 615,557602,287 729,377 440,915 440,163 466,572 503,898 530,937(16,492) 19,762 6,600 6,600 6,600 6,600 6,600168,996 179,751 164,630 128,317 148,891 162,279 179,307382,721 363,127 331,359 297,773 319,436 343,540 383,438

40,854 32,902 30,221 31,365 38,209 32,862 33,03341,370 42,654 44,917 44,671 46,159 46,670 46,211

1,219,736 1,367,572 1,018,642 948,889 1,025,869 1,095,848 1,179,526

100,359 108,378 17,148 101,370 101,360 120,919 133,204

- (40,945) (16,837) - - - -(1,500) - - - - - -

5,783 - - - - - -59,068 - - - - - -63,351 (40,945) (16,837) - - - -

33,537 19,971 21,625 30,411 30,408 36,276 39,9616,746 (1,219) (107) (107) (107) (107) (107)

210 188 - - - - -40,493 18,940 21,518 30,304 30,301 36,169 39,854

123,218 48,492 (21,208) 71,066 71,059 84,750 93,350

(52,885) (16,560) - - - - -245 (64) (118) - - - -

3,989 2,141 40 - - - -(48,651) (14,483) (78) - - - -

74,567 34,009 (21,286) 71,066 71,059 84,750 93,350

1,403 (425) 130 895 490 340 5531,682 607 1,269 1,546 1,228 1,272 1,583

74,845 35,042 (20,147) 71,717 71,797 85,683 94,38011,494 75,987 (3,310) 71,717 71,797 85,683 94,38048,390 92,740 105,552 65,983 118,277 170,652 236,913

123,235 127,782 85,405 137,700 190,075 256,335 331,293

222 1,095 459 459 459 459 45911,679 11,679 7,092 7,092 7,092 7,092 7,092

2,078 2,176 1,543 1,543 1,543 1,543 1,54315,491 6,722 5,526 5,526 5,526 5,526 5,526

63 42 486 486 486 486 486- - 4,000 4,000 4,000 4,000 4,000

963 515 317 317 317 317 31730,495 22,230 19,423 19,423 19,423 19,423 19,423

92,740 105,552 65,983 118,277 170,652 236,913 311,871

FY 15E

1,433,52936,848

1,396,68019,098

1,415,778

642,113573,411

6,600185,459403,708

33,86946,347

1,249,394

166,385

-----

49,915(107)

-49,809

116,576

----

116,576

7011,702

117,577117,577311,871

429,447

4597,0921,5435,526

4864,000

31719,423

410,025

Balance Sheet


AssetsFixed Assets

Gross Block 166,307 200,838Less: Acculated Depreciation 71,058 90,892Less: Impairment 942 1,004Net Block 94,307 108,942

Capital Work in Progress 13,574 33,264

Total Fixed Assets 107,881 142,205

Goodwill 1,140 2,197

Investments 34,789 164,975

Current Assets, Loans and AdvancesInventories 27,733 38,881Sundry Debtors 12,187 16,865Cash and Bank Balances 7,768 108,880Deferred Tax Assets 16 69Interest Accrued on Investments 11 12Loans and Advances 11,372 19,633

Total Current Assets 59,087 184,341

Total Assets 202,897 493,717

LiabilitiesLoans Fund

Secured Loans 25,034 49,612Unsecured Loans 8,740 199,643

Current Liabilities & ProvisionsDeferred Tax Liabilities 9,938 7,929Minority Interest 1,277 6,021Waarants Issued by Subsidiary Company - 175Provision for Employee Separation Compensation 14,026 11,183Current Liabilities 32,309 54,408Provisions 10,947 20,637

Total Current Liabilities & Provisions 68,496 100,352

Total Liabilities 102,270 349,607

Net Worth represented by Share Capital 5,530 5,800Share Warrants - 1,471Reserves & Surplus 97,657 138,938Add/(Less) Foreign Currency Monetary Item - -Less: Miscellaneous Expenditure (2,560) (2,098)Net Worth 100,627 144,110

Total Libialities & Equity Capital 202,897 493,717

Check 1 1


962,294 994,587 972,890 1,014,890 1,040,640 1,040,640 1,040,640599,389 598,581 579,029 623,699 669,858 716,528 762,739

31,717 31,830 28,610 - - - -331,187 364,175 365,252 391,191 370,782 324,112 277,901

88,476 88,883 92,706 128,828 159,317 196,643 185,828

419,663 453,059 457,958 520,019 530,099 520,755 463,729

180,500 153,649 145,418 145,418 145,418 145,418 145,418

33,674 64,111 54,178 65,013 78,016 93,619 112,343

230,643 216,684 186,866 199,030 210,020 231,754 233,725185,583 129,535 115,124 73,202 146,211 103,606 163,929

42,319 61,484 68,151 149,820 56,867 193,727 215,073297 1,074 1,488 1,488 1,488 1,488 1,488

90 68 76 76 76 76 76155,823 130,768 68,460 91,421 100,778 100,345 106,533614,755 539,614 440,166 515,036 515,441 630,995 720,825

1,248,592 1,210,432 1,097,721 1,245,487 1,268,975 1,390,788 1,442,315

354,150 342,439 280,593 290,593 279,693 279,693 279,693182,098 256,566 250,410 275,410 275,410 275,410 275,410

24,841 18,168 18,029 18,029 18,029 18,029 18,0298,368 8,974 8,843 14,409 10,668 11,073 11,494

175 175 175 175 175 175 17510,801 10,424 9,637 9,637 9,637 9,637 9,637

263,328 230,717 233,788 276,640 262,393 317,542 293,69064,504 71,480 65,974 65,974 65,974 65,974 65,974

372,017 339,938 336,446 384,863 366,876 422,429 398,998

908,264 938,943 867,450 950,867 921,980 977,533 954,102

62,026 62,028 8,867 9,437 9,437 9,437 9,437- - - - - - -

279,858 215,233 219,334 285,183 337,557 403,818 478,776- (4,717) 2,070 - - - -

(1,556) (1,055) - - - - -340,328 271,489 230,271 294,620 346,995 413,256 488,213

1,248,592 1,210,432 1,097,721 1,245,487 1,268,975 1,390,788 1,442,315

1 1 1 1 1 1 1

FY 15E

1,040,640809,086

-231,554

200,694

432,248

145,418

134,812

268,992113,119396,087

1,48876

120,281900,044

1,612,523

279,693275,410

18,02912,002

1759,637

365,23565,974

471,052

1,026,155

9,437-

576,930--

586,367

1,612,523

1

Reserves


Reserves & Surplus Securities Premium Account 8,292 22,594Amalgamation Reserve 11 11Debenture Redemption Reserve 646 646Capital Redemption Reserve 208 208Capital Reserve 160 160Capital Reserve (Arising on Consolidation) 110 159General Reserve 47,375 59,316Investment Allowance (Utilised) Reserve 2 2Export Profit Reserve 13 13Foreign Exchange Fluctuation Reserve - (52)Foreign Currency Translation Reserve 110 15Contributions for Capital Expenditure 371 427Contingency Reserve 100 100Debenture Forfeiture Reserve 0 0Special Reserve 196 236Statutory Reserve - -Acturial Gain/(Loss) - -Cash Flow Hedge Reserve - -Impact of Restaments 6,714 6,714

Total Reserves & surplus (Before P&L) 64,308 90,548

Profit & Loss Account 33,349 48,390

Total Reserves & surplus 97,657 138,937


63,921 61,128 140,315 140,315 140,315 140,315 140,31511 11 4 4 4 4 4

646 646 1,046 1,046 1,046 1,046 1,046208 208 208 208 208 208 208165 193 216 216 216 216 216162 165 202 202 202 202 202

76,972 78,394 83,919 83,919 83,919 83,919 83,9192 2 2 2 2 2 2

13 13 13 13 13 13 13397 14 14 14 14 14 14

(12,733) (48,712) (59,970) (59,970) (59,970) (59,970) (59,970)465 572 729 729 729 729 729100 100 100 100 100 100 100

0 0 0 0 0 0 0299 341 827 827 827 827 827963 1,478 1,795 1,795 1,795 1,795 1,795

59,068 4,103 (3,131) (3,131) (3,131) (3,131) (3,131)- - 615 615 615 615 615

(3,542) 11,025 (13,554) - - - -187,117 109,680 153,352 166,905 166,905 166,905 166,905

92,740 105,552 65,983 118,277 170,652 236,913 311,871

279,858 215,233 219,334 285,183 337,557 403,818 478,776

FY 15E

140,3154

1,046208216202

83,9192

1314

(59,970)729100

0827

1,795(3,131)

615-

166,905

410,025

576,930

Revenue

(Unless otherwise specified, all financials are in $ Million) FY 06A FY 07A

Revenue ExtractedExternal Sales

Steel 171,089 213,430Others 32,093 38,742Unallocable - -Elimainations - -

Total External Sales 203,182 252,172


1,177,332 1,334,818 937,062133,860 131,755 82,972

4,144 6,719 3,898- - -

1,315,336 1,473,293 1,023,931

FY 15E

Cash Flow Statement


Cashflow from OperationsPAT 41,390Less: Depreciation 19,834Less: Increase in Inventories (11,148)Less: Increase in Sundry Debtors (4,678)Less: Increase in Deferred Tax Asstes (53)Less: Increase in Loans and Advances (8,262)Less: Increase in Interest Accrued on Investments (1)Add: Increase in Current Liabilities 22,099Add: Increase in Minority Interest 4,745Add: Increase in Waarants Issued by Subsidiary Company 175Add: Increase in Provision for Employee Separation Compensation (2,843)Add: Increase in Deferred Tax Liabilities (2,009)Add: Increase in Provisions 9,690

Net Cashflow from Operations 68,939

Cashflow from Investment ActivitiesLess: Increase in Gross Block(Fixed Asstes) (34,531)Less: Imapairement 62Less: Increase in CWIP (19,690)Less: Increase in Goodwill (1,057)Less: Increase in Investments (130,186)

Net Cashflow from Investment Activities (185,401)

Cashflow from Financing ActivitiesLess: Increse in Reserves 26,240Less: Appropriations (26,349)Add: Increase in Secured Loans 24,578Add: Increase in Unsecured Loans 190,903Add: Increase in Share Warrants 1,471Less: Miscelleaneous Expensiture 462Less; Foreign Currency Monetary Item -Add: Increase in Share Capital 270

Net Cashflow from Financing Activities 217,574

Net Change in Cash 101,112

Cash BalanceOpening Cash Balance 7,768Net Cashflow 101,112Closing Cash Balance 108,880

Cash Balance in Balance Sheet 7,768 108,880

Check ###


74,845 35,042 (20,147) 71,717 71,797 85,683 94,380508,497 (808) (19,552) 44,671 46,159 46,670 46,211

(191,762) 13,959 29,818 (12,163) (10,991) (21,733) (1,972)(168,718) 56,048 14,411 41,923 (73,010) 42,606 (60,323)

(228) (777) (414) - - - -(136,190) 25,055 62,309 (22,961) (9,358) 434 (6,189)

(78) 22 (8) - - - -208,920 (32,611) 3,070 42,852 (14,246) 55,148 (23,852)

2,347 606 (131) 5,565 (3,740) 405 421- - - - - - -

(383) (376) (787) - - - -16,913 (6,673) (139) - - - -43,868 6,975 (5,506) - - - -

358,032 96,461 62,923 171,604 6,612 209,212 48,678

(761,456) (32,293) 21,697 (42,000) (25,750) - -30,713 113 (3,221) (28,610) - - -

(55,212) (408) (3,823) (36,122) (30,489) (37,326) 10,815(178,303) 26,850 8,231 - - - -

131,301 (30,437) 9,933 (10,836) (13,003) (15,603) (18,724)(832,957) (36,174) 32,817 (117,567) (69,242) (52,929) (7,909)

96,570 (77,437) 43,671 13,554 - - -(30,495) (22,230) (19,423) (19,423) (19,423) (19,423) (19,423)304,538 (11,711) (61,846) 10,000 (10,900) - -(17,546) 74,469 (6,156) 25,000 - - -

(1,471) - - - - - -541 502 1,055 - - - -

- (4,717) 6,786 (2,070) - - -56,226 2 (53,160) 570 - - -

408,364 (41,123) (89,072) 27,632 (30,323) (19,423) (19,423)

(66,561) 19,165 6,668 81,669 (92,953) 136,860 21,347

108,880 42,319 61,484 68,151 149,820 56,867 193,727(66,561) 19,165 6,668 81,669 (92,953) 136,860 21,347

42,319 61,484 68,151 149,820 56,867 193,727 215,073

42,319 61,484 68,151 149,820 56,867 193,727 215,073

### ### ### ### ### ### ###

FY 15E

117,57746,347

(35,267)50,809

-(13,748)

-71,545

509----

237,771

--

(14,866)-

(22,469)(37,335)

-(19,423)

------

(19,423)

181,014

215,073181,014396,087

396,087

###

Debt Schedule


Unsecured LoansOpening Balance 8,740Add: New Issued 190,903Less: RepaymentsClosing Balance 8,740 199,643

Secured LoansOpening Balance 25,034Add: New Issued 24,578Less: Repayments -Closing Balance 25,034 49,612

Average Loan Outstanding 70,757Interest Rate % 3%Interest Expense 1,877

Historical Debt SourcesSecured Loans Extracted

Banks and Financial Institutions 635 27,357Joint Plant Committee Steel Development Fund 16,093 16,502Privately Placed Non Convertible Debentures 4,625 1,750Working Capital Demand Loans / Term Loans from Banks 2,953 1,221Cash Credit / Packing Credits from Banks 722 2,738Government of India 0 0Assets Under Lease 7 44

Total Secured Loans 25,034 49,6121 1

Unsecured Loans ExtractedBanks and Financial Institutions 8,102 198,813Fixed Deposits (including interest accrued and due) 369 241Privately placed non–convertible debentures - -Housing Development Finance Corporation Ltd 124 87Convertible Alternate Account Securities - -Foreign Currency Convertible Bonds - -Assets under lease - -Interest free loans under Sales Tax Deferral Scheme 6 5Others 140 497

Total Unsecured Loans 8,740 199,6431 1


199,643 182,098 256,566 250,410 275,410 275,410 275,410- 74,469 - 25,000 - - -

17,546 - 6,156 - - - -182,098 256,566 250,410 275,410 275,410 275,410 275,410

49,612 354,150 342,439 280,593 290,593 279,693 279,693304,538 - - 10,000 - - -

- 11,711 61,846 - 10,900 - -354,150 342,439 280,593 290,593 279,693 279,693 279,693

196,376 283,813 282,502 274,252 280,277 277,552 277,55221% 12% 11% 11.44% 13.63% 11.84% 11.90%

40,854 32,902 30,221 31,365 38,209 32,862 33,033

327,261 317,512 256,72917,006 17,524 18,055

834 868 4501,200 500 9003,687 2,352 1,146

0 0 04,161 3,682 3,312

354,150 342,439 280,5931 1 1

130,088 162,421 145,462144 68 64

- 32,500 54,00955 30 12

43,299 54,739 21,168- - 24,572

7,931 6,339 4,4965 5 38

576 464 588182,098 256,566 250,410

1 1 1

FY 15E

275,410--

275,410

279,693--

279,693

277,55212.20%33,869

Sundry Debtors

(Unless otherwise specified, all financials are in $ Million) FY 06A FY 07A

Sundry Debtors ExtractedDue for a period exceeding six months 1,573 2,927Others 11,355 15,818Less: Provision for doubtful debts 741 1,880

Total Sundry Debtors 12,187 16,865


7,523 8,043 7,819182,815 126,362 112,467

4,754 4,870 5,162185,583 129,535 115,124

FY 15E

Current Liabilities


Current LiabilitesSundry Creditors 29,662 50,766Interest Accrued but not Due 289 498Advances Received from customers 2,056 2,910Unpaid Dividens etc. 302 234Total Current Liabilities 32,309 54,408


256,300 217,933 220,102 262,268 249,044 303,173 278,6753,186 5,502 7,712 7,712 7,712 7,712 7,7123,368 6,783 5,453 6,138 5,116 6,135 6,782

475 499 521 521 521 521 521263,328 230,717 233,788 276,640 262,393 317,542 293,690

FY 15E

349,7217,7127,281

521365,235

Assets Schedule


Opening Gross Block 166,307Addition of Asset 34,531Removal of Asset -

Closing Gross Block 166,307 200,838

Depreciation Expense 8,604 10,110Accumulated Depreciation 71,058 90,892Imapirment 942 1,004Net Block 94,307 108,942


200,838 962,294 994,587 972,890 1,014,890 1,040,640 1,040,640761,456 32,293 - 42,000 25,750 - -

- - 21,697 - - - -962,294 994,587 972,890 1,014,890 1,040,640 1,040,640 1,040,640

41,370 42,654 44,917 44,671 46,159 46,670 46,211599,389 598,581 579,029 623,699 669,858 716,528 762,739

31,717 31,830 28,610 - - - -331,187 364,175 365,252 391,191 370,782 324,112 277,901

FY 15E

1,040,640--

1,040,640

46,347809,086

-231,554

Valuation

Risk Free Rate 6.38%Market Risk Premium 9%Beta 1.54Cost of Equity 20%Tax Rate 34%Terminal Growth Rate 2%No of shares Outstanding Millions 943.74Tax Rate 34%


Net Income 41,390Add: Depreciation 10,110Add: Interest*(1-Tax Rate) 1,239Less: Fixed Capital Investment 34,531Less: Increase in Work in Progress 19,690Working Capital Investment

Inventories 11,148Sundry Debtors 4,678Deferred Tax Assets 53Interest Accrued on Investments 1Loans and Advances 8,262Deferred Tax Liabilities 2,009Minority Interest (4,745)Waarants Issued by Subsidiary Company (175)Provision for Employee Separation Compensation 2,843Current Liabilities (22,099)Provisions (9,690)Less:Total Working Capital Investment (7,715)

Free Cash Flow to firm 3,755Less: Interest*(1-Tax Rate) (1,239)Add: Net Borrowing 215,481

Free Cash Flow to Equity 220,475

Present Value of FCFE 337,896Terminal Value of FCFE 263,359Total Free Cash Flow to Equity 601,255Value Per share Rs. 637


74,845 35,042 (20,147) 71,717 71,797 85,683 94,38041,370 42,654 44,917 44,671 46,159 46,670 46,21126,964 21,715 19,946 20,701 25,218 21,689 21,802

761,456 32,293 (21,697) 42,000 25,750 - -55,212 408 3,823 36,122 30,489 37,326 (10,815)

191,762 (13,959) (29,818) 12,163 10,991 21,733 1,972168,718 (56,048) (14,411) (41,923) 73,010 (42,606) 60,323

228 777 414 - - - -78 (22) 8 - - - -

136,190 (25,055) (62,309) 22,961 9,358 (434) 6,189(16,913) 6,673 139 - - - -

(2,347) (606) 131 (5,565) 3,740 (405) (421)- - - - - - -

383 376 787 - - - -(208,920) 32,611 (3,070) (42,852) 14,246 (55,148) 23,852

(43,868) (6,975) 5,506 - - - -225,310 (62,228) (102,623) (55,216) 111,345 (76,859) 91,914

(952,727) 85,507 125,321 72,781 (74,846) 150,197 37,691(26,964) (21,715) (19,946) (20,701) (25,218) (21,689) (21,802)286,992 62,758 (68,002) 35,000 (10,900) - -

(638,771) 169,980 77,265 128,482 (60,528) 171,886 59,493

FY 15E

117,57746,34722,354

-14,866

35,267(50,809)

--

13,748-

(509)--

(71,545)-

(73,848)200,552(22,354)

-222,905


This open source financial model is for information purposes only. Due efforts have been taken by Pristine and its employees in preparation of this model to ensure that the information is accurate to the best of their knowledge and belief. The primary source of information contained in the report has been the DRHP filing of the company with SEBI. Pristine, makes no representations or warranties regarding the accuracy or completeness of such information and expressly disclaims any and all liabilities based on such information or on omissions there from.

The analysts who compiled this open source financial model hereby state that the contents in the document reflect his/her/their views and opinions on the subject matter. Pristine, and its employees/ analysts do conduct trainings and from time to time to seek establish business or financial relationships with companies covered in the open research models. As a result, investors should be aware that Pristine and/or such individuals may have conflicts of interests that could affect the objectivity of this report.

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This open source financial model is for information purposes only. Due efforts have been taken by Pristine and its employees in preparation of this model to ensure that the information is accurate to the best of their knowledge and belief. The primary source of information contained in the report has been the DRHP filing of the company with SEBI. Pristine, makes no representations or warranties regarding the accuracy or completeness of such information and expressly disclaims any and all liabilities based on such information or on omissions there from.

The analysts who compiled this open source financial model hereby state that the contents in the document reflect his/her/their views and opinions on the subject matter. Pristine, and its employees/ analysts do conduct trainings and from time to time to seek establish business or financial relationships with companies covered in the open research models. As a result, investors should be aware that Pristine and/or such individuals may have conflicts of

Pristine is India's largest authorized training provider for CFA®, FRM®, PRM and Financial Modeling. It has conducted more than 300,000+ man-hours of finance trainings for individuals and corporates in all the major

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