Financial Distress Diagnosis of M/s ICSA (India) Ltd, by Developing a Mathematical Model with Financial Engineering Approach

Era of industrialization creates a huge economic development in India. Among various types of industrial sectors, Energy & Power sector has its own space in creating huge source of income for India. But the uncertain distress caused by different factors results severe Industrial illness in this sector. This creates restrictive outcomes like loss of production and revenue losses which ultimately generates low GDP and National Income. Hence in this study by using of financial engineering concepts and tools the illness of power industry in Telangana has been diagnosed. It has been tried to investigate level of distress in power industries in Telangana by creating a financial distress model. By using the developed model sickness of M/s ICSA (India) Ltd. has been estimated and compared with the preexistence distress model. For this purpose, among a set of financial ratios, only used and informative ratios have been taken into considerations for Energy & Power Sectors. The predictive distressed model has been developed by discriminant analysis. The outcome of this analysis and research shows that the ratios are quite significant in showing the financial strength of a company of particular industry. And these ratios are different from industry to industry i.e. industry specific. The necessity of building industry specific distressed model for its respective companies is happened due to different impact of industry characteristics on its companies.