Essar Group’s Debt Repayment Is The Largest Ever In India

Summary

Prashant, from the SR group, discusses the company's transformative journey over the past few years at Davos. The group underwent significant deleveraging, monetizing assets to the tune of $25 billion, equivalent to 200,000 crores in rupees, over three to four years. This process has allowed them to repay all debts, setting the stage for a new phase of growth focused on energy, metals, mining, infrastructure, and technology sectors, with an emphasis on ESG-centric and future-ready technologies.

Takeaways

• 📍 Prashant and his team have been busy reinventing the SR group over the last few years.
• 🌐 The SR group has a significant presence in metals, mining, energy, and infrastructure businesses.
• 💹 They underwent a phase of deleveraging, monetizing assets and raising approximately 25 billion dollars.
• 💼 This deleveraging resulted in a reduction of about 200,000 crores in debt, one of the largest in India.
• ⏳ The debt reduction was achieved over a span of three to four years.
• 💼 The monetization included key assets such as SR Steel, SR Oil, and a BPO business.
• 💡 The debt has been fully repaid, with all obligations to the Indian banking system settled.
• 🔄 The company's strategy has three main themes: deleveraging, consolidation, and growth.
• 🛠️ Consolidation involved streamlining the operating companies within the group post-monetization.
• 🌱 The current phase is focused on growth, particularly in energy, metals, mining, infrastructure, technology, and services.
• 🌿 The group is looking to invest in new ESG-centric technologies to build future-ready businesses.

Q & A

What has Prashant been focusing on with the SR group in recent years?

Prashant has been focusing on reinventing the SR group, which includes deleveraging the group, monetizing assets, and preparing for future growth.

Why was the SR group's presence at Davos significant after a few years of absence?

The SR group's presence at Davos after a few years of absence due to the COVID-19 pandemic is significant as it marks their return and highlights their progress and achievements.

What phase did the SR group go through that involved monetizing assets?

The SR group went through a phase of deleveraging, where they monetized some of their key assets to reduce debt.

How much did the SR group monetize their assets for in the last few years?

The SR group monetized their assets for approximately 25 billion US dollars, which is equivalent to 200,000 crores in rupees.

What was the time frame for the SR group's asset monetization?

The asset monetization took place over the last three to four years.

Which companies were part of the SR group's asset monetization?

The companies involved in the asset monetization were SR Steel, SR Oil (the refinery), a BPO business, and a few other assets.

Has the SR group completed the process of repaying their debt?

Yes, the SR group has repaid all their debt, indicating that the debt issue is resolved.

What is the current phase of the SR group's strategy after deleveraging and consolidation?

The current phase is growth, with a focus on investing within the same sectors but with a new emphasis on ESG-centric technologies and future-ready businesses.

What are the four sectors the SR group has been involved with for the past two decades?

The four sectors are energy, metals and mining, infrastructure, and technology and services.

What is the future direction of the SR group's growth strategy?

The future direction involves investing in new technologies that are ESG-centric, aiming to build businesses that are ready for the future.

How does the SR group define 'future-ready businesses'?

Future-ready businesses, in the context of the SR group, are those that are built on new, environmentally and socially conscious technologies, aligning with ESG (Environmental, Social, and Governance) criteria.

Outlines

00:00

📈 De-leveraging and Asset Monetization at SR Group

The speaker, Prashant, discusses the SR group's transformation over the past few years, focusing on the significant de-leveraging process. The group, which was involved in metals, mining, energy, and infrastructure, underwent a phase of asset monetization, raising approximately $25 billion, equivalent to 200,000 crores in rupees, over three to four years. This is considered one of the largest cooperative de-leveragings in India. The monetization involved key assets such as SR Steel, SR Oil, and a BPO business, leading to the complete repayment of debt to the Indian banking system. The speaker emphasizes the completion of this phase and the readiness to move towards growth and investment in new sectors with an ESG-centric approach.

Keywords

💡Reinventing

Reinventing refers to the process of fundamentally rethinking and redesigning an entity or concept to make it more effective, efficient, or relevant. In the context of the video, Prashant discusses the reinvention of the SR group, which has involved strategic changes to their business operations and financial structure.

💡Deleveraging

Deleveraging is a financial term that describes the process of reducing the level of debt within a company or group to improve its financial stability and reduce risk. The script mentions that the SR group went through a phase of deleveraging, monetizing assets and delivering about 25 billion dollars over three to four years.

💡Monetization

Monetization in a business context is the act of converting assets or potential revenue streams into actual cash. The script highlights that the SR group monetized some of their key assets, which was a significant part of their deleveraging strategy, leading to a substantial inflow of capital.

💡Cooperative Leveraging

Cooperative leveraging is not a standard financial term, but in this context, it seems to refer to a collective effort to reduce debt or leverage. The SR group's deleveraging is described as one of the largest in India, amounting to 25 billion dollars, which is a significant cooperative effort to strengthen their financial position.

💡Rupee Value

Rupee value refers to the worth of something when measured in Indian Rupees (INR). The script specifies that the 25 billion dollars monetized is equivalent to about 200,000 crores in rupees, emphasizing the scale of the financial transactions involved in the SR group's strategy.

💡Strategy

Strategy in business refers to a long-term plan designed to achieve a particular goal or set of goals. The script outlines the SR group's strategy, which includes deleveraging, consolidation, and entering a phase of growth with a focus on new technologies and ESG-centric investments.

💡Consolidation

Consolidation in a business context means the process of combining parts of an organization to make it more efficient or profitable. After the monetization phase, the SR group focused on consolidating their operating companies, which is part of their strategic plan.

💡Growth

Growth in a business sense refers to an increase in size, value, or profitability. The script indicates that the SR group is entering a phase of growth again, which involves investing within the same sectors but with a focus on new technologies and future-ready businesses.

💡ESG-Centric

ESG-Centric refers to an approach that prioritizes Environmental, Social, and Governance factors in business decisions. The SR group's growth strategy includes investing in new technologies that are ESG-centric, indicating a commitment to sustainable and responsible business practices.

💡Future Ready

Future Ready describes a state of preparedness for future challenges or opportunities. The SR group aims to build future-ready businesses by investing in new technologies and sectors that align with ESG principles, ensuring they are well-positioned for long-term success.

💡Infrastructure

Infrastructure refers to the basic physical and organizational structures needed for the operation of a society or enterprise. In the script, infrastructure is one of the sectors the SR group has been involved with for decades and will continue to invest in as part of their growth strategy.

💡Technology and Services

Technology and services are sectors that involve the development, creation, and maintenance of systems and processes to facilitate various functions. The SR group's growth strategy includes investing in these sectors, indicating a move towards innovation and service-oriented business models.

Highlights

Prashant discusses the reinvention of the SR group over the past few years.

The SR group has been involved in metals, mining, energy, and infrastructure businesses.

The group underwent a phase of deleveraging, monetizing assets to reduce debt.

They raised approximately $25 billion through asset monetization, one of the largest in India.

The equivalent rupee value of the monetization is about 200,000 crores.

The deleveraging process took place over three to four years.

Key assets that were monetized include SR Steel, SR Oil, and a BPO business.

The debt has been completely repaid, with no remaining obligations to the Indian banking system.

The future strategy involves three main themes: deleveraging, consolidation, and growth.

Deleveraging is now complete, followed by the consolidation of operating companies.

The group is entering a phase of growth, focusing on energy, metals, mining, infrastructure, and technology sectors.

Investments will be made in new ESG-centric technologies to build future-ready businesses.

The SR group aims to invest within the same sectors but with a focus on sustainability and new technologies.

The strategy reflects a shift towards environmentally and socially responsible practices.

The reinvention process has positioned the SR group for sustainable growth and innovation.

Transcripts

Prashant and you've been busy for the

last few years

Reinventing the SR group uh tell us

about uh what that process has been like

and where you stand today

first of all thank you for having us

it's amazing to be back here in in Davos

after a couple of years which was cut

off because of the covet but it's

amazing and it's nice to be here again

and thank you for having us uh from an

Sr perspective it's been an interesting

period last few years

we we as you know we've been involved in

uh in metals and Mining energy

infrastructure businesses but uh we

obviously went through a phase of

deleveraging uh the group we monetized

some of our assets

we delivered about 25 billion dollars

which I do believe is one of the largest

Cooperative leveraging in India if 25

billion dollars over what period of time

over the last uh three to four years and

and what's the rupee value for that it's

about 200 000 crores 200 000 crore I

just want that headline to sink in 200

000 crore in uh less than five years

how did that happen well we uh we we

decided a few years ago that we wanted

to deliver we wanted to want it and the

only way we felt the right way to do

that would be to monetize some of our

key assets uh which we did and uh and

that and that led to that process is now

largely complete and that has led to

this significantly leveraging the

monetization values which we received

which was obviously around 200 000

crores so so what are the companies just

for for the people of the uh who are

watching us Sr steel yeah it's basically

Sr steel Sr oil the refinery

and uh and then we had a BPO business uh

which we also monetized and then a few

other bits so the debt is done and

dusted the debt is not interested I

would say 100 we have repaid all the

back all the debt and 100 we are

repaying all the debt of the Indian

banking system okay and what are the

implications of uh that for for your

future strategy so exactly so that we

decided our strategy around three three

teams the First theme was uh

deleveraging which is largely now

complete uh the second was consolidation

of the operating companies within the

group uh post the monetization

uh that process also we have now largely

complete over the last two years

and and now we are entering the phase of

uh growth once again so that's how we've

we've looked at uh at the group uh and

and when we say growth once again

what we mean is uh investing within the

same sectors so energy metals and Mining

infrastructure and technology and

services those are the four sectors

we've been involved with for the last

two decades I would say but investing in

new ESG

Centric new technologies which would

build Future Ready businesses

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