Working Capital Management: A Critical

Study of Industry
Of

An In-house Project Proposal for

Graduate Diploma in Management

By

Surbhi Gupta
PGFC1941

Under the guidance of

Prof. Ravi Agarwal

Adjutant Professor
JIM, Noida

18th April, 2020

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 INDEX

S. No Topics Page No.

Brief background of
1. 3
company
2. Industry background 4

3. Major Players 4
4. Project description 6
5. Learning outcomes 6

BRIEF BACKGROUND OF VEDANTA LTD.

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Vedanta Limited is one of the world’s leading diversified natural resources
companies. It is headquartered in Mumbai, India, which operates primarily at
the iron, gold or aluminum mines at
the Goa, Karnataka, Rajasthan and
Odisha mines. It was founded in
1979 and formerly known as Sesa
Sterlite / Sesa Goa Limited. It is
50% owned by Vedanta Resources
which is a UK based company
controlled by the Anil Agarwal
family and 50% owned by other
entities including the public, mutual
funds and foreign investors. Its product portfolio consists of Zinc, Lead Oil and
Gas, Iron ore, Steel, Aluminium, Copper, Gold and Silver.

In the 1980s, Vedanta had modest beginnings when D. P. Agarwal, founder of

the Sterlite Industries (India) Limited, established in Bombay and began to
purchase concession mines in various India states. His two sons, Navin Agarwal
and Sunil Agarwal, who currently manage the business, quickly joined him. In
1992, the main holding company for their mines, the Volcan investment was set
up in Nassau (Bahamas). In Patna D. P. Agarwal owned a small business of
aluminum drivers. His son Anil Agarwal had come to grow his company in
Mumbai. In 2007, the diversified metals & mining group Vedanta Resources
Plc, founded by Anil Agarwal, acquired 51 % controlling stake in Sesa Goa Ltd.
from Mitsui & Company Ltd.

Vedanta Limited owns, leases and operates through following firms in India:
 Bharat Aluminium Company Ltd 
 Hindustan Zinc Ltd, Rajasthan 
 Sterlite copper
 Twinstar Industries Ltd.
 Cairn India and Cairn energy India 
 Mines in Goa (currently frozen statewide) and Karnataka
 Electro steel Steels limited, Jharkhand
 Talwandi Sabo power Ltd
 Vedanta alumina Ltd
Though operating mainly in Goa and Karnataka, its operations have been
extended slowly to Odisha, Rajasthan, Chhattisgarh, Tamil Nadu, Punjab
Gujarat and Andhra Pradesh in recent years.

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METAL & MINING INDUSTRY IN INDIA
The Indian mining industry is a significant industrial sector that makes a
significant contribution to the Indian economy. The mining industry's GDP
share ranges between 2.2 and 2.5 percent, but it contributes about 10 percent to
11 percent of overall manufacturing sector's GDP.
India has a good edge in steel and alumina production and conversion costs. The
strategic position allows for the development of convenient exports and the
rapidly expanding Asian markets.
India produces 95 minerals– Four minerals linked to iron, ten minerals linked to
coal, 23 non-metallic minerals, three atomic minerals and 55 minor minerals
(includes construction and other minerals).
The growth of the industry is driving accelerated infrastructure construction and
automobile production. In the metals and mining business, power and cement
industries also support production. Demand for steel and iron will rise as the
residential and industry market continues to grow rapidly.

MAJOR PLAYERS
 Hindalco Industries Ltd
It is the metal flagship company of the Aditya
Birla Group and the industry leader in
aluminium and copper. Hindalco is the largest
aluminum rolling company in the world and a
leading primary aluminum producer in Asia. A
world-class copper smelter as well as a fertilizer
plant and a captive jetty are part of his state-of-art copper factory. The
copper

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 ssmelter is one of the largest single-location custom smelters in the
world. As an integrated manufacturer with a distribution footprint in 11
countries outside India, Hindalco is one of the largest aluminum majors.

 Vedanta Ltd.
Vedanta Limited is a leading globally
diversified company in natural resources. The
key businesses of the company concentrate
on zinc, plum, silver, aluminum, coal, iron
ore, petroleum & gas and industrial energy and its operations include
India, South Africa, Namibia, Ireland and Australia. In its main divisions,
the company holds industry leading market shares. Vedanta Limited is a
company of the Vedanta Group.

 NMDC Ltd.
It was incorporated as a wholly owned public
corporation in 1958 as a government of India. The
Ministry of Steel, Government of India, is under
administrative authority of NMDC. Ever since it was
formed, a wide range of minerals, including iron ore,
copper, rock phosphate, Cale stone, dolomite,
gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, beach
sands, etc. were explored. NMDC is the top producer of iron ore in India
producing approximately 30 million metric tons of iron ore from three
fully mechanized mining plants.

 The National Aluminium Company Ltd.

The National Aluminum Company Ltd (Nalco) was
founded as a government company of India in 1981.
It is a complementary aluminum complex that
involves mining of bauxites, rail and port operations,
aluminum processing and casting. Initially
commissioned in 1985–87, Nalco was the protagonist
in the development, exportation and self-sustaining growth of alumina
and aluminum. Its product range includes aluminum alloy, aluminum and
hydrate, zeolite A, and specialized and rolled products, such as ingots,
billets, sows, cast strips, etc. It is located in Koraput with its aluminum
refinery and its Orissa melting factory.

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  Hindustan Copper Ltd.
It is a government enterprise under the Ministry of
Mines (India), Government of India, under the
Central Public Sector Enterprise. In India, HCL is
the only integrated copper producer to carry out a
wide variety of activities including mining, benefit,
smelting, refining and continuous casting rod. HCL
shares shall be listed on exchanges of Ahmedabad, Calcutta, Mumbai,
Delhi, Chennai. On 31 July 2015, India's government has declared that it
will sell 15% of the shares in Hindustan Copper Limited, from 89.5% to
74.5%.

PROJECT DESCRIPTION
Working capital is the measure of short-term financial strength of a company. It
gives a user an idea of the company's underlying operational efficiency.
Working capital management will help build an organization to improve cash
management, inventory management, and debtor’s management. It also helps in
managing short-term financing and to frame appropriate credit policies.
Inefficient management of working capital may lead to severe financial
problems and then to insolvency.
A critical study of metal and mining industry and Vedanta Ltd will be done in
this project. It will include relevant facts about the company, different business
verticals, general information, Financial, Marketing, HR functions. A brief
review of traditional ratio analysis as a technique for investigating corporate
performance- study of sector specific ratios and the working capital analysis and
management models will be done.

LEARNING OUTCOMES
The project aims to enable me to:
1. Describe the linkage between academic theories / models and practice
2. Critically analyze the relevant management functions and their role in a
given organization
3. Perform SWOT analysis of the assigned organization
4. Conduct a working capital management study for the assigned
organization and the sector
5. Demonstrate intermediate spreadsheet and research skills

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