1. Financials of steel firms not trusted today, says SBI chief Arundhati Bhattacharya

Financials of steel firms not trusted today, says SBI chief Arundhati Bhattacharya

Steel utilisation is very low in India and companies in the sector need to start making margins good enough to undertake research and development.

By: | Mumbai | Published: August 24, 2017 5:07 AM
Balance sheets of Indian steel companies lack transparency, and as such, they have lost the trust of banks, State Bank of India (SBI) chairman Arundhati Bhattacharya said at an industry event on Wednesday. (Reuters)

Balance sheets of Indian steel companies lack transparency, and as such, they have lost the trust of banks, State Bank of India (SBI) chairman Arundhati Bhattacharya said at an industry event on Wednesday. “The steel industry needs to create governance standards. Steel companies’ financials are not trusted today,” she said, adding that “lack of corporate governance is leading to lack of transparency”. She said peer pressure should be built to prevent bad practices. Steel utilisation is very low in India and companies in the sector need to start making margins good enough to undertake research and development. Thin margins render steel companies incapable of supporting themselves in the middle of downturns. To change this state of affairs, more equity must come into the industry, Bhattacharya said. The SBI chief observed that the industry is also plagued by a lack of efficiency and ways should be found to increase efficiency. The goods and services tax network (GSTN) offers one means of doing so, she said. Making a case for better collaboration among steel industry players in the domains of advocacy, research and marketing, Bhattacharya said, “It is good to be competitive, but not so much that you kill each other.”

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