Financial Management & Corporate Finance Case Study

Case Title:

Pantaloon Retail (India) Limited: Managing Working Capital for Long-term Capital

Abstract:
The case study primarily deals with the concept of managing Working Capital through long term funds. It captures the transition of Pantaloon Retail (India) Ltd. (PRIL) from its inception to being a leading retailer, in the backdrop of the changing landscape of Indian Retail Industry. The case study also revolves around the PRIL’s aggressive expansion plans that resulted in huge debts and other expenditures that impacted the profits leaving the company with negative cash flow from operations over the past 5 years. It details the company’s operating cycle which has been managed effectively but coming under severe pressure due to negative cash flows. Further the case study focuses on the computation of cash flow statement of PRIL. Towards the end, the case study poses the following question for classroom debate – For how long can PRIL rely on its working capital to raise long term funds?.

Pedagogical Objectives:

• To analyse the growth of Indian Retail Industry and identify its issues and challenges
• To discuss on the operational performance of PRIL
• To analyse the financial performance of PRIL and cash from operations
• To discuss how PRIL is able to raise funds on basis of its existing working capital.

Keywords : Pantaloon Retail India Limited, Working Capital, Operating Cycle, Negative Cash flows, Debt, Interest Payments, Apparel Retail Industry, Largest Retail Space, Long Term Funds, Promoters and Shares, Indian retail Industry, Cash Flow statement