It may be due to acquisition but the simple fact is that Tata Steel, the hundred year old Indian steel giant, is now closing on India’s new generation oil and petrochemical giant Reliance Industries Ltd. Tata Steel is just Rs 7000 crore behind RIL in terms of revenue at the end of the financial year 2007-08.
The unabated rise in commodity prices has helped both the steel and oil giants from India. Globally, steel prices surged around 10-12 per cent in the last one year on voracious appetite in developing countries for infrastructure development. During the financial year 2007-08, the steel major announced that Tata Metaliks has become a subsidiary of the company with Tata Steel and its subsidiaries holding 50.05 per cent equity share capital of Tata Metaliks. In February 2008, the company acquired 70 per cent equity shares in Al Rimal Mining LLC, a group company of the Al Bahja Group of Oman for the development of the Uyun Limestone deposits at Salalah in the Sultanate of Oman. Consequently Al Rimal Mining LLC has become a subsidiary of the company during the period. But the most critical has been the integration of European steelmaker Corus which helped Tata Steel to emerge as India’s second-largest private company, with consolidated revenues of over Rs 1,32,110 crore for the year ended March 31, 2008. The steel major has also reduced the gap with Reliance Industries, which continues to top India Inc’s revenue league table with 2007-08 consolidated revenues of Rs 1,37,147 crore. Tata Steel has also emerged as India’s second-most profitable company, with consolidated net profit of over Rs 12,350 crore during FY08. RIL continues to lead this chart, too, with a PAT of nearly Rs 20,000 crore for FY08. But this included a one-time profit of around Rs 4,800 crore from the sale of a minority stake in Reliance Petroleum. Also the crude prices jumped more than 100 per cent when steel prices increased by 10-12 per cent. In short, looking at the business fundamentals the Tata Steel performance is more attention grabbing than that of RIL.
The other interesting point for corporate watchers is the possible pecking order in the next financial year. Tata’s automobile company Tata Motors is now fifth in the order. The company reported consolidated revenues of Rs 36,121 crore during FY08. But next financial will see consolidation of balance sheet with the finances of Jaguar and Land Rover, which Tata acquired earlier this year, with Tata Motors.
The other point to note from Tata and RIL result is the role of the commodity boom in adding to the wealth of India’s super rich. Riding on the boom both Tata Steel and RIL made record profit. So did India’s third largest company Hindalco Industries. The Aditya Birla group’s flagship, which is India’s largest aluminium producer, moved into the list of country’s top three private sector companies following its acquisition of US-based Novelis. The US acquisition nearly tripled Hindalco’s consolidated FY08 revenues to Rs 60,668 crore.
The unabated rise in commodity prices has helped both the steel and oil giants from India. Globally, steel prices surged around 10-12 per cent in the last one year on voracious appetite in developing countries for infrastructure development. During the financial year 2007-08, the steel major announced that Tata Metaliks has become a subsidiary of the company with Tata Steel and its subsidiaries holding 50.05 per cent equity share capital of Tata Metaliks. In February 2008, the company acquired 70 per cent equity shares in Al Rimal Mining LLC, a group company of the Al Bahja Group of Oman for the development of the Uyun Limestone deposits at Salalah in the Sultanate of Oman. Consequently Al Rimal Mining LLC has become a subsidiary of the company during the period. But the most critical has been the integration of European steelmaker Corus which helped Tata Steel to emerge as India’s second-largest private company, with consolidated revenues of over Rs 1,32,110 crore for the year ended March 31, 2008. The steel major has also reduced the gap with Reliance Industries, which continues to top India Inc’s revenue league table with 2007-08 consolidated revenues of Rs 1,37,147 crore. Tata Steel has also emerged as India’s second-most profitable company, with consolidated net profit of over Rs 12,350 crore during FY08. RIL continues to lead this chart, too, with a PAT of nearly Rs 20,000 crore for FY08. But this included a one-time profit of around Rs 4,800 crore from the sale of a minority stake in Reliance Petroleum. Also the crude prices jumped more than 100 per cent when steel prices increased by 10-12 per cent. In short, looking at the business fundamentals the Tata Steel performance is more attention grabbing than that of RIL.
The other interesting point for corporate watchers is the possible pecking order in the next financial year. Tata’s automobile company Tata Motors is now fifth in the order. The company reported consolidated revenues of Rs 36,121 crore during FY08. But next financial will see consolidation of balance sheet with the finances of Jaguar and Land Rover, which Tata acquired earlier this year, with Tata Motors.
The other point to note from Tata and RIL result is the role of the commodity boom in adding to the wealth of India’s super rich. Riding on the boom both Tata Steel and RIL made record profit. So did India’s third largest company Hindalco Industries. The Aditya Birla group’s flagship, which is India’s largest aluminium producer, moved into the list of country’s top three private sector companies following its acquisition of US-based Novelis. The US acquisition nearly tripled Hindalco’s consolidated FY08 revenues to Rs 60,668 crore.
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