Dastur

Investment Advisory

"Dastur has the unique blend of business, technology, economic and financial expertise for framing practical operational strategies to improve the competitiveness of the global steel industry. ..."

Peter Marcus
- World Steel Dynamics

  • Abhijit Sarkar

    - Vice President

Challenges

Global steel overcapacity and low demand have squeezed cash flows of steel companies, increasing the amount of bad debt in this sector. Indian steel sector accounts for 30% of the total non-performing assets (NPA). To tackle the NPA's, government introduced measures such as Strategic Debt Restructuring and Insolvency laws. These measures enable the Lender's to sell assets/control of the companies to recover debt.

Though this presents an opportunity to buy steel plants at low cost, the ability to craft good returns depends on selecting the right technology, process and product line.

We assist in investing decisions by answering the right questions such as what is the right plant size and investment value in the steel plant? What will be the go-to technology based on the process economics playout? What is the normalized EBITDA and return projections?

We are a consulting engineers at core with in-depth understanding of finance of process industries. We partner with firms and Lenders to create long-term and sustainable solutions.

Dastur's Viewpoints

Private Equity Investment :Many companies have state of the art manufacturing facilities and their low equity value gives an opportunity to acquire at low price. We work with Investors to identify, assist in acquiring, restructure product basket, and operate the assets for them. For eg: By commissioning 0.6 MT plate mill for a 1.6 MT DR-EAF steel plant, we could increase the exit enterprise value for our investor by 30%.



Merger & Acquisition :As a process company, acquiring/merging with companies which have a complement assets can reduce the production cost and boost cash flows.

Financing Greenfield/ Brownfield projects :Financing the right process type can diversify and reduce the cost escalation risk faced largely by manufacturers who do not have captive mines.

Copyright @ 2018 M. N. Dastur & Company (P) Ltd.