Lakshmi Mittal's Story: Steel Magnate or Reckless Risk Taker

When you look at steel, what comes to mind? Cold and hard, right? Yet, in the hands of Lakshmi Mittal, it became a molten tapestry woven with ambition, risk, and raw brilliance.

With an empire worth ₹1.2 lakh crores, Lakshmi Mittal not only built something for himself but also contributed to reshaping an industry, one furnace at a time.

Today, we will discuss the lows and highs of Mittal's life & success story and take a peek inside his brainchild, ArcelorMittal Group.

So, grab your study glasses and sit tight. Because it's not an ordinary rags-to-riches story, this tale has varying shades of emotions, from perseverance to arrogance, giving us a great idea of what to do and what to avoid.

Lakshmi Mittal's Childhood: Forged in Steel

Lakshmi Niwas Mittal was born in a small town, Sadulpur, near the Haryana- Rajasthan border in 1950. Unlike other second or third-generation richest personalities in India, Mittal wasn't handed a silver ladle. He had a simple childhood with dreams as big as the size of the steel company he manages today.

His playground was his father, Mohan Mittal's steel mill, where the clanging of metal became a lullaby of opportunity. This is the place from where he learnt the basics or, should I say, saw the dim backstage of a shining stage.

This allowed him to hone a strong will to take his small company to the heights of the industry.

Early Years & Establishment of Lakshmi Mittal's First Company

In adulthood, Lakshmi Mittal worked for several companies, among which Larsen & Toubro is also included. In the 1970s, the steel industry in India was heavily regulated. It was during this time that Mittal set his sights on expansion beyond national borders.

He took the bold step of establishing his own steel plant in Indonesia, PT Ispat Indo, marking the genesis of the Mittal Steel empire. This move showcased his foresight and willingness to take calculated risks in pursuit of his goals.

His hunger for growth was insatiable. He scoured the globe for distressed mills, sniffing out potential and acquiring it. Trinidad, Mexico, Romania - each acquisition was meticulously planned, integrating acquired companies into his growing steel giant, Ispat International.

Arcelor-Mittal Merger: Birth of the Largest Steel Firm in India

In 2004, Lakshmi Mittal orchestrated the landmark merger of Ispat International with LNM Holdings and the US-based International Steel Group, forming the world's largest steelmaker, Mittal Steel Company.

This move catapulted Mittal Steel into the top echelons of the global steel industry and became the world's largest steelmaker. In this way, Mittal's reputation as a master dealmaker and game-changer was solidified.

Even after this big achievement, Lakshmi Mittal was far from satisfied. He wished to rule the markets of Europe as well. In 2006, the unthinkable happened. Arcelor, a European titan, agreed to a merger with Mittal Steel. In this way, ArcelorMittal was born, ruling over 10% of global production.

Throughout his career, Mittal has faced criticism for his aggressive tactics and the environmental impact of the steel industry. However, there's no denying his remarkable achievements.

ArcelorMittal Analysis: Latest Financials & Fundamentals

Mittal's success can be attributed not only to his financial acumen but also to his visionary leadership. He invested heavily in technology and innovation, ensuring that ArcelorMittal remained at the forefront of industry advancements.

Product Line: Hot rolled steel, cold rolled steel, colour coated steel, galvanised steel, chequered steel, steel plates, welded pipes, etc.

Mittal's commitment to sustainability and environmental responsibility has set benchmarks for the global steel sector.

Based on the 3rd Quarterly Results released on 9 November 2023, here's how the firm is looking in terms of financial performance:

• ArcelorMittal's official website reported an EBITDA of $1.9 billion (around ₹15,770 crore) and a net income of $1.2 billion (around ₹9,960 crore). Net income saw a decline of 3.7% from the last quarter. 
• Higher Earnings Per Share (EPS) of $1.11, which is somewhere around ₹92.13 and a strong Return On Equity (ROE) OF 9.4%. Improved efficiency thanks to portfolio optimisation and strategic projects.
• Reduced debt and ample liquidity expressed via the net debt of $4.3 billion (around ₹35,690 crore).

ArcelorMittal holds one-third of the market share of the steel industry with a revenue of $6.62 lakh crore. Mittal trained his son Aditya Mittal to be the CEO of the company after recently relieving himself of the responsibilities.

The 2019 acquisition seemed to secure their dominance over Essar Steel.

However, countermoves by competitors caused a temporary dip in their ownership below 10%. Subsequent mergers and reorganisations, including Nippon Steel's involvement the following year, stabilised their stake around 20%.

Responsibilities & Society

Beyond the boardroom, Lakshmi Mittal has also made significant contributions to philanthropy. The Mittal family established the LNM Foundation, focusing on education, healthcare, and community development.
Mittal's commitment to giving back to society underscores his belief in corporate social responsibility.

Apart from steel dominance and philanthropic tendencies, Lakshmi Mittal is also known for his expensive tastes. A $128 million 12-bedroom home in London and the expenditure of $60 million for his daughter's wedding in Paris made headlines and created scrutiny.

The Bottom Line

Lakshmi Mittal redefined the steel landscape, proving that empires can be forged not just from gold, but from molten iron and boundless ambition. His story is an inspiration for aspiring entrepreneurs and a reminder that with vision, hard work, and a touch of calculated risk, even the most ambitious dreams can be achieved.