Abstract:   This case study delves into Tata Steel's remarkable journey in reviving Bhushan Steel Limited (BSL) from bankruptcy to profitability amidst challenging economic conditions. It highlights Tata Steel's strategic restructuring initiative, emphasising the importance of enhancing board diversity. The case examines Tata Steel's strategic decisions and underscores the crucial role of board diversity in fostering effective decision-making and organisational resilience. Furthermore, it explores how Tata Steel's proactive adoption of board diversity facilitated BSL's resurgence and enabled it to weather subsequent challenges, including the COVID-19 pandemic.

Additionally, the case sheds light on the corporate governance failure of BSL and its acquisition by Tata Steel Ltd. (TSL) in 2018 under the Insolvency and Bankruptcy Code (IBC) of 2016. It traces BSL's downfall from being among India's largest steel producers to bankruptcy in 2017 due to aggressive expansion plans, substantial borrowings, and fraudulent practices. Following the Reserve Bank of India's (RBI) directive, BSL's lenders filed for Corporate Insolvency Resolution Process (CIRP) applications. Tata Steel's acquisition of a majority stake in BSL through Bamnipal Steel Limited (BNPL) marked the beginning of BSL's transformation into Tata Steel Bhushan Steel Ltd. (TBSL). Tata Steel orchestrated a swift turnaround post-acquisition, analysing BSL's board composition and performance across pre, during, and post-CIRP phases. The case utilises the FOG index to evaluate the readability of BSL's annual reports and conducts a financial ratio analysis, revealing the looming threat of bankruptcy amidst governance shortcomings.

Learning Objectives

Robust corporate governance is paramount for stakeholders, especially shareholders, amidst the surge in financial scandals and economic turmoil. It encompasses a framework of regulations, policies, and procedures guiding the oversight and management of a company by its board of directors. The structure and composition of the board, comprising individuals with diverse backgrounds and skills such as Executive, Promoter, Independent, Nominee, and Women directors, are pivotal as it serves as the supreme decision-making body representing shareholders. Furthermore, board diversity, encompassing gender, nationality, age, and education, enhances decision-making processes and is essential for effective oversight and strategic planning within the company.
This case delves into the corporate governance failures, financial imprudence, fraudulent practices, and accounting irregularities that led to BSL’s downfall and subsequent bankruptcy.

Through an examination of Tata Steel's turnaround strategy post-acquisition, which propelled BSL's transformation in less than two years, students will gain insights into various aspects:

• Analysing the impact of the board's actions on BSL's trajectory, considering governance failures.
• Recognising the significance of board diversity in driving organisational turnaround strategies.
• Evaluating the effect of enhanced board diversity on BSL's governance practices and performance.
• Assessing the effectiveness of specific actions taken by TSL for BSL's revitalisation.
• Analysing key financial and operational metrics used to assess BSL's performance before and after the acquisition.
• Understanding the FOG Index and its importance in ensuring effective corporate governance through transparent and readable reporting.