FOR THE COIMBATORE-BASED textile machinery manufacturer,- Lakshmi Machine Works, the early '90s (especially 1995-96) was, indeed, a golden period. Order books were full and buyers had to sometimes wait for a year, LMW had no debt on its books--customers actually paid an advance when placing an order. It appeared that nothing could go wrong. So, the cash-rich LMW diversified into steel-making and set up SISCOL., an integrated steel plant. Its share of the investment was 145 crore rupees, part of it funded through borrowings. In 1997, things went horribly wrong. The textiles industry slumped into a recession, the longest in its history. Orders dried up, sales fell and the interest burden (on account of SISCOL investment} pulled down the bottom line, leaving it with marginal profits.
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