Assessing Level of Significance of Financial

Management Decisions and Protecting

Small Shareholder’s Interest of
Tata Steel and JSW Steel

Assignment 2
Submitted in the partial fulfilment of
the requirement for the course of
ECON F315 Financial Management
Group 10

2022B3PS0872P Varun V
2021B3AA1056P Anmol Aggarwal
2021B3AA1060P Harsh Bhatia
2021B3A71285P Aviral Agarwal

Under the Supervision of

Prof. Niranjan Swain

BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE PILANI

15 June 2024

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 Abstract

This document conducts a comparative analysis of the financial management

decisions of TATA Steel and JSW Steel, two major players in India's steel
industry. The assessment focuses on several key financial metrics to determine
the impact of these decisions on their overall performance and strategic
positioning. The study examines capital structure, investment decisions, dividend
policies, working capital management, profitability, risk management, and
corporate governance. Detailed analyses of these areas reveal significant insights
into how each company's approach aligns with its strategic goals and market
dynamics. TATA Steel's strategy is characterized by a commitment to reducing
financial risk and enhancing stability, while JSW Steel adopts a more dynamic
approach, balancing aggressive growth initiatives with risk management. The
findings highlight the strengths and weaknesses of both companies in navigating
financial challenges and opportunities within the steel industry.

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Contents

Abstract ................................................................................................................................................... 2
1. Capital Structure and Financing Decisions: ......................................................................................... 5
1.1. Debt-Equity Ratio: ........................................................................................................................ 5
1.2. Interest Coverage Ratio: .............................................................................................................. 5
2. Investment Decisions: ......................................................................................................................... 5
2.1. Capital Expenditures (CapEx): ...................................................................................................... 5
2.2. *Return on Investment (ROI): ...................................................................................................... 5
3. Dividend Policy: ................................................................................................................................... 5
3.1. Dividend Payout Ratio:................................................................................................................. 5
3.2. Retention Ratio: ........................................................................................................................... 5
4. Working Capital Management: ........................................................................................................... 6
4.1. Current Ratio: ............................................................................................................................... 6
4.2. Inventory Turnover Ratio: ............................................................................................................ 6
5. Profitability Analysis:........................................................................................................................... 6
5.1. Net Profit Margin: ........................................................................................................................ 6
5.2. Return on Equity (ROE): ............................................................................................................... 6
6. Risk Management: .............................................................................................................................. 6
6.1. Hedging Strategies: ...................................................................................................................... 6
6.2. Credit Ratings: .............................................................................................................................. 6
7. Corporate Governance and Strategic Decisions: ................................................................................ 6
7.1. Board Composition and Independence: ...................................................................................... 6
7.2. Strategic Alliances and Acquisitions: ........................................................................................... 6
Comparative Analysis .............................................................................................................................. 7
1. Debt-Equity Ratio: ........................................................................................................................... 7
2. Interest Coverage Ratio: ................................................................................................................. 8
3. Dividend Payout Ratio:.................................................................................................................... 9
4. Current Ratio: ................................................................................................................................ 10
5. Inventory Turnover Ratio: ............................................................................................................. 12
6. Net Profit Margin: ............................................................................................................................. 13
7. Return on Equity (ROE): .................................................................................................................... 14
PART B: .................................................................................................................................................. 16
1. Promoters' Shareholding .................................................................................................................. 17
2. Foreign Institutional Investors (FIIs) ................................................................................................. 17

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3. Domestic Institutional Investors (DIIs) .............................................................................................. 17
4. Government Shareholding ................................................................................................................ 17
5. Public Shareholding........................................................................................................................... 18
6. Number of Shareholders ................................................................................................................... 18
Implications for Small Shareholders' Protection .................................................................................. 18
1. Dilution of Promoter Control: ................................................................................................... 18
2. Institutional Influence: .............................................................................................................. 18
3. Fluctuations in Public Shareholding: ......................................................................................... 18
4. Collective Voice: ........................................................................................................................ 19
Promoters' Shareholding Analysis ........................................................................................................ 19
1. Tata Sons Private Limited:............................................................................................................. 19
2. Other Tata Entities: ....................................................................................................................... 19
Overall Promoter Shareholding Trend .................................................................................................. 19
Stability with Slight Decrease:........................................................................................................... 19
Implications for Small Shareholders: ................................................................................................ 19
Impact on Small Shareholders .............................................................................................................. 20
Voting Power:.................................................................................................................................... 20
Market Perception: ........................................................................................................................... 20
Investment Confidence: .................................................................................................................... 20
Conclusion ............................................................................................................................................. 20
1. Promoters' Shareholding .................................................................................................................. 22
2. Foreign Institutional Investors (FIIs) ................................................................................................. 22
3. Domestic Institutional Investors (DIIs) .............................................................................................. 23
4. Government Shareholding ................................................................................................................ 23
5. Public Shareholding........................................................................................................................... 23
6. Other Shareholding ........................................................................................................................... 23
7. Number of Shareholders ................................................................................................................... 23
Overall Analysis ..................................................................................................................................... 24
Recommendations for Protecting Small Shareholders' Interests ......................................................... 24
Overall Promoter Shareholding Trend .................................................................................................. 25
Impact on Small Shareholders .............................................................................................................. 25
Conclusion ........................................................................................................................................... 271

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Assessing the level of significance of financial management decisions for TATA
Steel and JSW Steel involves analysing several financial aspects and decisions
that impact their performance and strategic direction. Here are key areas to
consider:

1. Capital Structure and Financing Decisions:

1.1. Debt-Equity Ratio:

Examine how both companies balance their use of debt and equity in their capital
structure. Higher debt levels can indicate aggressive expansion but also higher financial risk.

1.2. Interest Coverage Ratio:

This indicates the company's ability to meet its interest obligations, which is crucial for
assessing the sustainability of their financing decisions.

2. Investment Decisions:

2.1. Capital Expenditures (CapEx):

Review their investments in new projects, expansions, and technology upgrades.
Significant CapEx can reflect growth strategies.

2.2. *Return on Investment (ROI):

Measure how effectively the companies are generating returns from their investments.

3. Dividend Policy:

3.1. Dividend Payout Ratio:

This shows the proportion of earnings paid out as dividends to shareholders. A higher
ratio may indicate a focus on returning value to shareholders.

3.2. Retention Ratio:

The percentage of profits reinvested in the business can signal long-term growth plans.

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4. Working Capital Management:

4.1. Current Ratio:

This indicates liquidity and the ability to cover short-term obligations.

4.2. Inventory Turnover Ratio:

Higher ratios can suggest efficient inventory management.

5. Profitability Analysis:

5.1. Net Profit Margin:

Indicates overall profitability and efficiency.

5.2. Return on Equity (ROE):

Shows how well the company is generating profit from shareholders' equity.

6. Risk Management:

6.1. Hedging Strategies:

Analyse how both companies manage risks associated with commodity prices,
exchange rates, and interest rates.

6.2. Credit Ratings:

Assessments by rating agencies can provide insights into the perceived risk of the
company’s financial management strategies.

7. Corporate Governance and Strategic Decisions:

7.1. Board Composition and Independence:

Strong governance can significantly impact financial management decisions.

7.2. Strategic Alliances and Acquisitions:

Review major strategic moves that impact financial performance and market position.

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Comparative Analysis

1. Debt-Equity Ratio:

Debt-Equity Ratio
TATA Steel JSW Steel Industry Average
FY 2015 2.6 1.7 2.15
FY 2016 1.9 2.2 2.05
FY 2017 2.2 1.9 2.05
FY 2018 1.5 1.4 1.45
FY 2019 1.5 1.4 1.45
FY 2020 1.6 1.7 1.65
FY 2021 1.2 1.3 1.25
FY 2022 0.7 1.1 0.9
FY 2023 0.8 1.2 1
FY 2024 0.9 1.1 1

Debt-Equity Ratio
3
2.5
2
1.5
1
0.5
0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Debt-Equity Ratio TATA Steel Debt-Equity Ratio JSW Steel

Debt-Equity Ratio Industry Average

Over the observed fiscal years, in comparison to the industry average, both companies
displayed deviations, with TATA Steel often trending lower than the benchmark and JSW Steel
exhibiting periods of both over and under-leverage.

Determining which approach is superior depends on various factors, including industry

dynamics, business strategies, and risk tolerance. TATA Steel's downward trajectory suggests
a commitment to reducing financial risk, potentially enhancing stability and resilience during
economic downturns. Conversely, JSW Steel's fluctuating pattern indicates a more dynamic
approach, possibly leveraging debt strategically to fund growth initiatives during opportune

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times while also managing risk exposure. Ultimately, the "better" strategy hinges on aligning
debt levels with corporate objectives and market conditions. TATA Steel's consistent reduction
may be favoured for risk-averse investors seeking stability, whereas JSW Steel's flexibility
could be advantageous for those willing to tolerate higher risk for potentially higher returns
during growth phases.

2. Interest Coverage Ratio:

Interest Coverage Ratio

TATA Steel JSW Steel Industry Average
FY 2015 0.7 1.7 1.2
FY 2016 1 0.3 0.65
FY 2017 0.7 2.4 1.55
FY 2018 4.9 3.1 4
FY 2019 3.1 3.9 3.5
FY 2020 0.8 1.7 1.25
FY 2021 2.8 4 3.4
FY 2022 10.2 7 8.6
FY 2023 3.9 1.8 2.85
FY 2024 0.8 2.7 1.75

Interest Coverage Ratio

12
10
8
6
4
2
0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Interest Coverage Ratio TATA Steel Interest Coverage Ratio JSW Steel
Interest Coverage Ratio Industry Average

The Interest Coverage Ratios of TATA Steel and JSW Steel, alongside the industry average,
display dynamic trends over the fiscal years, reflecting their ability to meet interest obligations.
TATA Steel's ratio fluctuated considerably, with peaks and troughs indicating varying levels
of financial stability. In contrast, JSW Steel's ratios portrayed a more erratic pattern,

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showcasing periods of both robust and strained interest coverages. Notably, TATA Steel
demonstrated a remarkable surge in FY 2022, indicating a significant improvement in its ability
to cover interest expenses.

Assessing which company exhibits the best performance depends on the investor's risk appetite
and financial objectives. TATA Steel's consistency in maintaining moderate to high interest
coverage ratios, particularly evidenced by the substantial leap in FY 2022, may appeal to risk-
averse investors seeking stability and reliability in dividend payments. Conversely, JSW Steel's
dynamic approach, though potentially offering higher returns during periods of growth, poses
greater risk due to fluctuating interest coverage ratios, which may deter conservative investors.
Ultimately, TATA Steel's ability to consistently cover interest payments and its notable
improvement in FY 2022 position it as the preferable choice for investors prioritizing stability
and reliability in their investment portfolios

3. Dividend Payout Ratio:

Dividend Payout Ratio

TATA Steel JSW Steel Industry Average
FY 2015 0.00% 18.50% 9.25%
FY 2016 0.00% 0.00% 0.00%
FY 2017 0.00% 19.20% 9.60%
FY 2018 8.50% 15.60% 12.05%
FY 2019 14.60% 16.20% 15.40%
FY 2020 73.60% 14.90% 44.25%
FY 2021 40.00% 24.80% 32.40%
FY 2022 15.50% 25.30% 20.40%
FY 2023 50.20% 24.70% 37.45%
FY 2024 0.00% 0.00% 0.00%

Dividend Payout Ratio

100.00%

50.00%

0.00%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Dividend Payout Ratio TATA Steel Dividend Payout Ratio JSW Steel
Dividend Payout Ratio Industry Average

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The Dividend Payout Ratios for TATA Steel and JSW Steel, juxtaposed with the industry
average, showcase distinct dividend distribution strategies and financial health over the fiscal
years. TATA Steel notably presented a sporadic pattern, with intermittent years of high payouts
followed by years of no dividends, indicating an irregular commitment to returning profits to
shareholders. Conversely, JSW Steel displayed a more consistent approach, with relatively
stable dividend payouts over the period. Comparatively, TATA Steel's dividend distribution
strategy appears less reliable and predictable due to the absence of dividends in several years
and significant fluctuations in payout percentages when dividends were declared. In contrast,
JSW Steel's steady dividend payouts suggest a more disciplined and shareholder-friendly
approach, providing investors with a consistent stream of income.

Determining which approach is superior depends on investors' preferences and investment

objectives. TATA Steel's sporadic dividend payments may appeal to risk-tolerant investors
seeking potential windfall gains during years of high payouts. However, for investors
prioritizing consistent income streams and stability, JSW Steel's steadfast dividend policy
presents a more attractive option. Overall, JSW Steel's consistent dividend payouts reflect
better financial stability and a more shareholder-centric approach, making it the preferable
choice for investors seeking reliable income and long-term value appreciation.

4. Current Ratio:

Current Ratio
TATA Steel JSW Steel Industry Average
FY 2015 0.72 0.53 0.63
FY 2016 0.74 0.43 0.58
FY 2017 0.53 0.55 0.54
FY 2018 0.89 0.56 0.72
FY 2019 0.83 0.73 0.78
FY 2020 0.97 0.81 0.89
FY 2021 0.56 0.71 0.63
FY 2022 0.7 0.72 0.71
FY 2023 0.46 0.72 0.6
FY 2024 0.37 0.66 0.51

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 Current Ratio
1.2
1
0.8
0.6
0.4
0.2
0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Current Ratio TATA Steel Current Ratio JSW Steel Current Ratio Industry Average

The Current Ratio, which measures a company’s ability to cover short-term liabilities with
short-term assets, provides insights into the liquidity and operational efficiency of TATA Steel,
JSW Steel, and the industry average over the fiscal years. TATA Steel’s Current Ratio
fluctuated between 0.37 and 0.97. Notably, it peaked at 0.97 in FY 2020, suggesting a strong
liquidity position that year. However, the ratio generally hovered below the industry average,
indicating occasional liquidity challenges. The downward trend towards 0.37 in FY 2024 raises
concerns about its declining short-term financial stability.

In contrast, JSW Steel exhibited a more stable Current Ratio, generally aligning closer to or
above the industry average. With a low of 0.43 in FY 2016 and a high of 0.81 in FY 2020, JSW
Steel’s liquidity position appears more consistent and reliable. The stability around the industry
average in most years reflects a more balanced approach to managing short-term liabilities.
Comparing both companies, JSW Steel emerges as the more favourable choice regarding
liquidity. Its more consistent Current Ratio, often near or above the industry average, suggests
better short-term financial health and operational efficiency. Investors and stakeholders might
prefer JSW Steel for its steadier liquidity position, which enhances its ability to meet short-
term obligations reliably.

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5. Inventory Turnover Ratio:

Inventory Turnover Ratio

TATA Steel JSW Steel Industry Average
FY 2015 6 5 5.5
FY 2016 5 5 5
FY 2017 5 5 5
FY 2018 4 6 5
FY 2019 5 6 5.5
FY 2020 5 5 5
FY 2021 5 6 5.5
FY 2022 5 4 4.5
FY 2023 4 5 4.5
FY 2024 5 5 5

Inventory Turnover Ratio

8

0
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Inventory Turnover Ratio TATA Steel Inventory Turnover Ratio JSW Steel
Inventory Turnover Ratio Industry Average

The Inventory Turnover Ratio, reflecting how effectively a company manages its inventory,
provides key insights into operational efficiency. Comparing TATA Steel, JSW Steel, and the
industry average from FY 2015 to FY 2024 reveals distinct patterns.

TATA Steel's Inventory Turnover Ratio consistently hovers around 5, with minor dips to 4 in
FY 2018 and FY 2023. This steady performance indicates stable and reliable inventory
management, closely aligning with the industry average. However, the lack of significant
improvement suggests a static approach to inventory efficiency. JSW Steel, on the other hand,
shows greater variability with ratios ranging from 4 to 6. Peaks of 6 in FY 2018 and FY 2019
highlight periods of superior efficiency, surpassing both TATA Steel and the industry average.

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Despite a dip to 4 in FY 2022, JSW Steel's higher peaks demonstrate its potential for more
effective inventory management during certain years.

Overall, JSW Steel stands out for its higher efficiency during peak years, indicating better
inventory turnover management at times. However, TATA Steel's consistent performance
offers reliability and stability. Thus, JSW Steel might be preferred for its efficiency peaks,
while TATA Steel remains a strong choice for consistent operational performance.

6. Net Profit Margin:

Net Profit Margin
TATA Steel JSW Steel Industry Average
FY 2015 -3% 3% 0%
FY 2016 0% -1% -1%
FY 2017 -4% 6% 1%
FY 2018 14% 8% 11%
FY 2019 6% 9% 8%
FY 2020 1% 5% 3%
FY 2021 5% 10% 8%
FY 2022 17% 14% 16%
FY 2023 3% 2% 3%
FY 2024 -2% 5% 2%

Net Profit Margin

20%
15%
10%
5%
0%
-5%
-10%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Net Profit Margin TATA Steel Net Profit Margin JSW Steel Net Profit Margin Industry Average

The Net Profit Margin, which measures a company's profitability as a percentage of its revenue,
provides a clear picture of financial health and efficiency. Analyzing TATA Steel, JSW Steel,
and the industry average from FY 2015 to FY 2024 reveals distinct trends and performance
levels. TATA Steel experienced notable volatility in its Net Profit Margin, with negative

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margins in FY 2015, FY 2017, and FY 2024. However, it achieved significant peaks of 14%
in FY 2018 and 17% in FY 2022, surpassing the industry average. This indicates periods of
strong profitability despite occasional losses, showcasing TATA Steel's capability to capitalize
on favorable market conditions effectively. In contrast, JSW Steel displayed more consistent
profitability, maintaining positive margins throughout the majority of the period, except for a
minor dip to -1% in FY 2016.

JSW Steel's margins ranged from a low of -1% to a high of 14%, with notable stability around
the industry average. This consistency, coupled with significant peaks, reflects a steady and
reliable performance. Comparing the two, JSW Steel emerges as the better performer in terms
of consistent profitability, maintaining positive margins more reliably than TATA Steel. While
TATA Steel demonstrates potential for higher peaks, its occasional negative margins indicate
greater volatility. Investors seeking stable and predictable returns may prefer JSW Steel,
whereas those willing to accept higher risk for potentially higher rewards might consider TATA
Steel. Overall, JSW Steel's consistent performance and fewer negative years make it the
preferable choice for sustained profitability.

7. Return on Equity (ROE):

Return on Equity (ROE)

TATA Steel JSW Steel Industry Average
FY 2015 -12.60% 7.70% -2.45%
FY 2016 -1.10% -2.60% -1.85%
FY 2017 -11.00% 15.30% 2.15%
FY 2018 29.10% 21.80% 25.45%
FY 2019 13.20% 21.60% 17.40%
FY 2020 1.60% 10.70% 6.15%
FY 2021 11.00% 16.80% 13.90%
FY 2022 36.50% 31.10% 33.80%
FY 2023 7.80% 6.30% 7.05%
FY 2024 -5.30% 11.60% 3.15%

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 Return on Equity (ROE)
40.00%

20.00%

0.00%

-20.00%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024

Return on Equity (ROE) TATA Steel Return on Equity (ROE) JSW Steel
Return on Equity (ROE) Industry Average

The Return on Equity (ROE) reveals how effectively companies use shareholders' equity to
generate profits. Comparing TATA Steel and JSW Steel against the industry average from FY
2015 to FY 2024 highlights significant differences.

TATA Steel showed substantial volatility, with negative ROE in FY 2015, FY 2016, FY 2017,
and FY 2024. However, it achieved impressive highs in FY 2018 (29.10%) and FY 2022
(36.50%), outperforming the industry average. This indicates TATA Steel’s potential for strong
profitability during favorable conditions despite periods of underperformance. JSW Steel,
conversely, displayed more consistent and positive ROE, with only one negative year in FY
2016. It maintained strong returns, peaking at 31.10% in FY 2022, and often exceeded the
industry average, reflecting stable and effective equity utilization.

Between the two, JSW Steel is the more reliable performer, with fewer negative years and a
generally stable upward trend. TATA Steel’s higher peaks suggest potential for significant
profitability but come with greater volatility and risk. For investors seeking steady returns, JSW
Steel’s consistent performance is preferable. However, those willing to accept higher risk for
potentially higher rewards might consider TATA Steel. Overall, JSW Steel’s stability and
consistent ROE make it the better choice for sustained profitability.

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 PART B:

TATA STEEL

Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024

Promoters 34.41% 34.41% 33.92% 33.92% 33.92% 33.92% 33.90% 33.90% 33.90% 33.90% 33.70% 33.19%

FIIs 21.94% 22.38% 21.36% 22.87% 21.95% 21.52% 21.87% 20.62% 20.28% 20.31% 20.01% 19.61%

DIIs 19.28% 18.28% 18.11% 20.41% 19.01% 18.17% 19.62% 20.68% 20.96% 22.20% 23.15% 23.51%

Government 0.10% 0.10% 0.10% 0.10% 0.10% 0.16% 0.16% 0.16% 0.16% 0.16% 0.16% 0.16%

Public 24.27% 24.83% 26.51% 22.70% 25.02% 26.23% 24.45% 24.63% 24.70% 23.43% 22.99% 23.52%

No. of 10,22,4 12,30,3 16,91,2 15,87,3 20,47,6 33,71,4 33,35,2 36,44,0 36,92,7 38,04,7 39,92,6 47,17,4
Shareholders 82 67 78 15 61 17 65 90 50 28 09 42

Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024

Tata Sons Private

32.93 32.93 32.46 32.46 32.46 32.46 32.44 32.44 32.44 32.44 32.24 31.76
Limited

Tata Motors Limited 0.46 0.46 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.45 0.44

Tata Investment
0.35 0.35 0.34 0.34 0.34 0.34 0.34 0.34 0.34 0.34 0.34 0.34
Corporation Limited

Tata Chemicals Ltd 0.26 0.26 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25

Ewart Investments
0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18
Limited

Rujuvalika
0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.09
Investments Limited

Tata Industries Limited 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.08 0.08

Tata Motors Finance

0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
Limited

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The provided data spans from June 2021 to March 2024 and reflects the
distribution of shareholding among various categories (Promoters, FIIs, DIIs,
Government, and Public) along with the number of shareholders. Let's analyze
the protection of small shareholders' interests based on this data:

1. Promoters' Shareholding

Promoters' shareholding has gradually decreased from 34.41% in June 2021 to 33.19% in
March 2024. This steady decline, although small, might suggest a slight dilution of control by
promoters, potentially giving more voice to smaller shareholders.

2. Foreign Institutional Investors (FIIs)

FIIs' shareholding has fluctuated, initially increasing from 21.94% in June 2021 to 22.87% in
March 2022, then decreasing to 19.61% by March 2024. The decrease in FII holding might
reduce foreign influence over company decisions, which could align more closely with the
interests of domestic small shareholders.

3. Domestic Institutional Investors (DIIs)

DIIs' shareholding has generally increased from 19.28% in June 2021 to 23.51% in March
2024. This rise suggests a stronger influence of domestic institutions, which could be more in
tune with local market conditions and small shareholders' interests. DIIs often have a fiduciary
duty to their clients, who may include small shareholders, aligning their interests.

4. Government Shareholding

Government shareholding remains negligible and stable at around 0.10% to 0.16%. This
minimal stake indicates limited direct government influence over company decisions.

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5. Public Shareholding

Public shareholding has seen fluctuations, peaking at 26.51% in December 2021 and then
reducing to 23.52% by March 2024. Despite the variations, the public's significant stake
indicates that small shareholders still have a considerable portion of ownership, giving them a
substantial collective voice.

6. Number of Shareholders

The number of shareholders has increased dramatically from 10,22,482 in June 2021 to
47,17,442 in March 2024. This significant rise suggests a growing interest among small
shareholders, which could enhance the protection of their interests due to their larger presence
and potential collective influence.

Implications for Small Shareholders' Protection

1. Dilution of Promoter Control:

The slight reduction in promoter shareholding could reduce the concentration of power,
allowing for more balanced decision-making that considers the interests of small
shareholders.

2. Institutional Influence:

The increase in DII shareholding suggests stronger domestic institutional influence,

potentially advocating for better corporate governance and protecting small
shareholders' interests.

3. Fluctuations in Public Shareholding:

Although public shareholding has decreased slightly in recent periods, the significant
increase in the number of shareholders indicates a broader base of small shareholders,
which might lead to enhanced advocacy for their interests.

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 4. Collective Voice:

The dramatic increase in the number of shareholders suggests a democratization of

ownership. A larger number of small shareholders can collectively exert significant
influence on corporate governance and decision-making processes.

Also looking at the promoters share in the company , we observe that the data provided shows
the shareholding percentages of various entities related to Tata Group in a company over
several quarters from June 2021 to March 2024. These entities include Tata Sons Private
Limited, Tata Motors Limited, Tata Investment Corporation Limited, Tata Chemicals Ltd,
Ewart Investments Limited, Rujuvalika Investments Limited, Tata Industries Limited, and Tata
Motors Finance Limited.

Promoters' Shareholding Analysis

1. Tata Sons Private Limited:

The major stakeholder with a consistent shareholding around 32.93% initially, which
slightly decreased to 31.76% by March 2024.

2. Other Tata Entities:

Minor stakeholders with relatively small percentages, such as Tata Motors Limited
(around 0.46%), Tata Investment Corporation Limited (0.34%), Tata Chemicals Ltd
(0.25%), etc.

Overall Promoter Shareholding Trend

Stability with Slight Decrease:

The shareholding percentages of the major promoter, Tata Sons Private Limited, have
slightly decreased over time. Other entities show relatively stable or slightly declining
shares.

Implications for Small Shareholders:

The overall slight decrease in promoter shareholding could imply a marginal dilution
of control, potentially opening more opportunities for small shareholders to influence

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 company decisions. However, the promoter group still holds a significant majority,
ensuring control over key decisions.

Impact on Small Shareholders

Voting Power:

Small shareholders' collective influence might see a marginal increase due to the slight
reduction in promoters' shareholding. However, their overall impact remains limited
given the substantial control retained by Tata Sons and related entities.

Market Perception:

A stable or slightly decreasing promoter shareholding can be perceived positively,

indicating a balanced approach between maintaining control and providing liquidity in
the market.

Investment Confidence:

Consistency in promoter shareholding often assures investors of stability and long-term

commitment, which can be beneficial for small shareholders' confidence.

In conclusion, while there are slight changes in promoter shareholding, the dominant position
of Tata Sons Private Limited and associated entities ensures continued significant control over
the company. Small shareholders may experience a marginal increase in their relative
influence, but the overall control remains firmly with the promoters.

Conclusion

The data indicates a trend towards a more dispersed and potentially balanced shareholding
structure. The reduction in promoter shareholding, along with the increase in DII stake and the
number of shareholders, suggests that small shareholders' interests might be better protected.
This is because a broader and more diverse shareholder base can hold the company accountable
and ensure that their interests are considered in corporate decisions. However, the actual
protection of small shareholders' interests would also depend on the effectiveness of corporate
governance practices and the ability of shareholders to organize and advocate for their rights.

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 JSW STEEL

Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024

Promoters + 44.07% 44.09% 44.72% 45.01% 45.02% 45.20% 45.20% 45.41% 45.41% 44.79% 44.81% 44.81%

FIIs + 12.93% 12.17% 11.21% 11.58% 10.61% 10.75% 26.04% 26.01% 25.98% 26.13% 26.33% 26.06%

DIIs + 7.16% 8.06% 8.38% 7.94% 9.07% 9.25% 9.34% 9.47% 9.59% 9.50% 9.48% 9.81%

Government + 0.51% 0.51% 0.51% 0.51% 0.51% 0.51% 0.51% 0.51% 0.51% 0.51% 0.51% 0.51%

Public + 34.92% 34.80% 34.85% 34.65% 34.14% 33.70% 18.35% 18.07% 17.99% 18.64% 18.47% 18.44%

Others + 0.41% 0.37% 0.33% 0.31% 0.65% 0.60% 0.57% 0.53% 0.51% 0.43% 0.41% 0.37%

No. of 6,57,66 6,86,72 6,79,90 6,59,87 6,94,91 6,67,17 6,08,44 6,05,01 5,86,99 6,63,17 6,41,58 6,71,77
Shareholders 3 4 6 9 6 3 8 9 7 9 2 9

Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar
2021 2021 2021 2022 2022 2022 2022 2023 2023 2023 2023 2024

Jsw Techno Projects

Management Ltd 10.94 10.94 10.95 10.95 10.95 10.95 10.95 10.95 10.95 10.82 10.82 10.82

Jsw Holdings Limited 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.42 7.42 7.42

Vividh Finvest Private

Limited 5.93 5.93 5.93 5.93 5.93 5.93 5.93 5.93 5.93 5.86 5.86 5.86

Sahyog Holdings Private

Limited 4.64 4.64 4.64 4.64 4.64 4.64 4.64 4.64 4.64 4.58 4.58 4.58

Siddeshwari Tradex
Private Limited 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.5 3.46 3.46 3.46

Jsw Energy Limited 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.86 2.86 2.86

Jtpm Metal Traders Private

Limited 1.73 1.74 2.43 2.65 2.65 2.66 2.83 3.04 3.04 2.94 2.94 2.94

Virtuous Tradecorp Private

Limited 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.47 2.47 2.47

Nalwa Sons Investments

Ltd 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.88 1.86 1.86 1.86

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Jsl Overseas Limited 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.87 0.86 0.86 0.86

Karnataka State Industrial

And Infrastructure Deve 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.37 0.37 0.37

Tanvi Shete 0.2 0.2 0.2 0.21 0.21 0.21 0.21 0.21 0.21 0.2 0.2 0.2

Tarini Jindal Handa 0.2 0.2 0.2 0.21 0.21 0.21 0.21 0.21 0.21 0.2 0.2 0.2

Estrela Investment
Company Limited 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17

Mendeza Holdings Limited 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17

Nacho Investments
Limited 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17

1. Promoters' Shareholding

Promoters' shareholding has gradually increased from 44.07% in June 2021 to 44.81% in
March 2024. This steady increase indicates that promoters are consolidating their control over
the company.

● Implication for Small Shareholders: A higher promoter shareholding can lead to

increased control by a concentrated group, potentially reducing the influence of small
shareholders on company decisions.

2. Foreign Institutional Investors (FIIs)

FIIs' shareholding initially decreased from 12.93% in June 2021 to 10.61% in June 2022, but
then dramatically increased to 26.04% by December 2022 and remained around 26% through
March 2024.

● Implication for Small Shareholders: The significant increase in FII shareholding

suggests a greater influence of foreign investors. While this can bring in expertise and
stability, it may also mean that company policies could lean towards the interests of
these large investors over small shareholders.

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3. Domestic Institutional Investors (DIIs)

DIIs' shareholding has increased from 7.16% in June 2021 to 9.81% in March 2024.

● Implication for Small Shareholders: An increase in DII shareholding generally

implies a stronger domestic institutional presence, which can be beneficial for small
shareholders as DIIs often advocate for good corporate governance and transparency.

4. Government Shareholding

Government shareholding has remained constant at 0.51% throughout the period.

● Implication for Small Shareholders: The stable and low government shareholding
indicates minimal direct governmental influence on the company's operations.

5. Public Shareholding

Public shareholding has decreased significantly from 34.92% in June 2021 to 18.44% in March
2024.

● Implication for Small Shareholders: This sharp decline in public shareholding

suggests that small shareholders' influence is waning. As public shareholding represents
the interest of numerous small shareholders, a decrease implies reduced collective
power to impact company decisions.

6. Other Shareholding

Shareholding in the 'Others' category has remained relatively minor, fluctuating between 0.31%
and 0.65%.

7. Number of Shareholders

The number of shareholders has generally decreased from 657,663 in June 2021 to 671,779 in
March 2024, with some fluctuations.

● Implication for Small Shareholders: The decrease in the number of shareholders,

coupled with a reduction in public shareholding, suggests a potential consolidation of

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 shares into fewer hands. This could indicate that smaller shareholders are selling their
shares, potentially reducing their overall influence.

Overall Analysis

The overall trends indicate a shift towards more concentrated ownership, with promoters and
FIIs increasing their stakes while public shareholding significantly decreases. This shift could
lead to a reduction in the influence of small shareholders over corporate governance and
strategic decisions. Small shareholders might face challenges in protecting their interests as the
balance of power tilts towards larger, institutional investors and promoters.

Recommendations for Protecting Small Shareholders' Interests

1. Strengthening Corporate Governance: Ensuring strong corporate governance

practices can help protect the interests of all shareholders, including small ones. This
includes transparent reporting, fair voting practices, and effective communication.
2. Enhancing Shareholder Activism: Small shareholders should organize and engage in
shareholder activism to voice their concerns and influence company policies.
3. Encouraging Diverse Ownership: Companies can consider policies to encourage
diverse ownership and prevent excessive concentration of shares among a few entities.
4. Regulatory Oversight: Regulatory bodies should ensure that the rights of small
shareholders are protected, and there are mechanisms to address any grievances they
might have.

By understanding these trends and taking proactive steps, the interests of small shareholders
can be better safeguarded despite the evolving shareholding dynamics.

Also looking at the major promotors the data outlines the shareholding percentages of various
entities related to the JSW Group in a company over several quarters from June 2021 to March
2024. These entities include:

1. Major Stakeholders:
o JSW Techno Projects Management Ltd: ~10.94%, slightly decreasing to
10.82%.
o JSW Holdings Limited: ~7.50%, slightly decreasing to 7.42%.

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 o Vividh Finvest Private Limited: ~5.93%, slightly decreasing to 5.86%.
o Sahyog Holdings Private Limited: ~4.64%, slightly decreasing to 4.58%.
o Siddeshwari Tradex Private Limited: ~3.50%, slightly decreasing to 3.46%.
o JSW Energy Limited: ~2.90%, slightly decreasing to 2.86%.
2. Minor Stakeholders:
o JTPM Metal Traders Private Limited: Starting around 1.74%, fluctuating
and settling at around 2.94%.
o Virtuous Tradecorp Private Limited: ~2.50%, slightly decreasing to 2.47%.
o Nalwa Sons Investments Ltd: ~1.88%, slightly decreasing to 1.86%.
o Other smaller stakeholders (below 1%).

Overall Promoter Shareholding Trend

● Stability with Minor Decreases: The shareholding percentages of major promoters

have shown slight decreases over time, suggesting a gradual reduction in promoter
control.

Impact on Small Shareholders

1. Voting Power:
o Increased Relative Influence: The slight decrease in promoter shareholding
means the relative influence of small shareholders could increase slightly.
Although their collective influence is still limited, it is slightly enhanced.
o Potential for Collective Action: Small shareholders might find it easier to form
coalitions to influence decisions during shareholder meetings, given the slight
reduction in promoter control.
2. Market Perception:
o Positive Signal of Stability: The generally stable shareholding by major
promoters indicates confidence and long-term commitment to the company,
which can be perceived positively by the market and small shareholders.
o More Liquidity: The slight reduction in promoter holdings may be viewed as
increasing market liquidity, potentially making it easier for small shareholders
to buy or sell shares.
3. Investment Confidence:

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o Assured Stability: Consistent promoter shareholding suggests stability and
confidence in the company's future prospects, which is reassuring for small
shareholders.
o Potential Opportunities: With the slight decrease in promoter shareholding,
there might be opportunities for small shareholders to increase their stakes and
influence in the company.

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 Conclusion

While the overall promoter shareholding remains significant, ensuring continued

substantial control over the company, the slight decreases observed in some
entities' holdings may offer small shareholders marginally greater influence. This
shift indicates a balance between maintaining control and providing more market
liquidity. Small shareholders can view the stability as a positive sign of
confidence from major stakeholders, while also recognizing the potential for a
slightly increased influence in corporate decisions.

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