670fecb4b56dd Corporate Clash Case

ORPORATE
lash CASE STUDY
Overview:
Videocon Industries Ltd., once a major player in India’s consumer electronics market,
faced a severe financial crisis that ultimately led to its insolvency. At its peak, Videocon
was a well-known household name, renowned for its affordable home appliances,
including televisions, washing machines, and refrigerators, which were staples in many
Indian homes. In 2010, Videocon Industries raised ₹1,156.32 crore through a rights issue,
showing its ambition to expand and secure funding for its growing ventures. Videocon d2h
has become the first Indian private company since the year 2000 to list overseas, issuing
ADR worth $ 325 million to the public. It also became the first sizable Indian company listed
on US exchanges and the first Indian media company to be listed at NASDAQ.
Case background:
Starting in 2010, Videocon Industries possessed massive wealth and began diversifying its
business across multiple sectors. Videocon D2H, the company’s direct-to-home service,
became a major success, and by 2010, its subscriber base boasted to 23 million from 1.5
million in 2005, solidifying its position in the market. With such a large customer base and
a diversified portfolio in sectors such as telecommunications, consumer electronics, and
real estate, Videocon appeared to be on a growth trajectory. However, despite these
successes, debt began to accumulate across the company’s ventures.
1st sept 2009: share price was 248.04 rs, total Op income 9361.74 cr and equity share
capital 229.41
1st dec 2011: share price became 174.09 rs, total Op income 12,919.47 cr and equity share
capital 303.01
Management decision:
As a board member of Videocon’s decision making body in 2012 January, using
comprehensive analytical and financial skills, what course of action would you recommend
for the company's future growth?
How could have Videocon restructured its core and side businesses for better
performance and focus, while also implementing management restructuring and
stronger vigilance practices? Propose necessary modifications to improve overall
efficiency and governance.
What alternative business opportunities could Videocon have pursued based on
market data to align better with its strengths and market trends?
What long-term strategies could Videocon have adopted to balance investor interests,
growth prospects, sustainability, and market alignment?
How could Videocon have navigated future legal procedures to ensure compliance
with government regulations and banking policies? What actions could strengthen its
relationship with financial institutions?
SUMMiT’24
ORPORATE
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Financial analysis:
Using Videocon’s financial reports, identify key points where the company should have altered
its financing strategies.
How could different approaches, like equity financing or internal funding, have reduced its
debt burden?
Compare Videocon’s key financial metrics with peer companies. What critical financial
weaknesses contributed to Videocon's decline, and how did its peers manage similar
challenges more effectively?
Analyze Videocon's debt accumulation, debt-equity ratio, and cash flow ratio. What strategies
could have managed or reduced the debt effectively while improving these financial metrics?
Brownie Points:
Show detailed financial comparison with competitors using financial metrics.
Showcase decision based on market supply-demand data both on executing businesses and
expansions.
Considering the current market competition, propose the most efficient way to reduce its
debt.
NOTE: Points will be given based on a unique decision making strategy and their backing data,
participants should use data from relevant resources like financial reports, newspaper articles
and financial firm articles.
Resources/Articles:
https://www.thehindu.com/business/Industry/dth-service-provider-videocon-debuts-in-
nasdaq/article7080370.ece#:~:text=Saurabh%20Dhoot%20said.-,Videocon%20d2h%20has%20b
ecome%20the%20first%20Indian%20private%20company%20since,to%20be%20listed%20at%2
0NASDAQ ,
https://en.wikipedia.org/wiki/Videocon_Telecom
Prepare a 3-Slide Presentation citing your abstract approach on your team’s proposed solution
and Submit.
ALL THE BEST! SEE YOU ON 25th!
SUMMiT’24

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