Sources of Finances

penredheadManagement

Nov 18, 2013 (3 years and 10 months ago)

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“ The Making of a CFO”






Sources of Finances



October 11th, 2013


Mumbai

2


Primarily

responsible

for

financial

planning,

record

keeping

and

financial

reporting




Ensure

all

financial

reports

are

accurate

and

completed

in

time



Significant

role

in

the

strategic

business

decisions

to

be

taken

by

assisting

the

CEO



Overseeing

operations,

many

times

directly

handling

procurement



Manage

and

materially

support

information

technology,

investor

relations,

lenders

relations

and

joint

venture

managements



Responsible

for

managing

the

financial

risks,

cost

controls,

and

maintaining

liquidity



In

the

Course

of

Financial

Management,

undertakes

a

lead

role

in

resourcing

funds



3


EQUITY



Mezzanine

Debt

/

Q
uasi

E
quity




DEDT


4


EQUITY

(including

quasi)



GRANT



DEDT

(including

mezzanine)


5


DEBT : EQUITY


2 : 1


Period of funds


Cost of funds


Marketability of instruments


Ratings




Rating of the debt


Rating of equity



6


Proprietary

Funds


As

Solitary

investments

or

in

Partnerships



Public

Funds


As

listed

companies

on

SEs,



As

trusts



Charitable

or

Business



Private

Equity

Funds




7


Listing


Could

be

done

at

various

exchanges

like

BSE,

NSE,

AIMS,

International

Stock

Exchanges

in

forms

like

GDRs

/

FCCBs





Charitable



By

building

corpus

by

way

of

donations

and

grants


Business

Trusts




Private

Equity

Funds




8


IPOs

and

FPOs


Appointment

of

Merchant

Bankers


Preparation

of

the

Red

Herring

Prospectus


Identifying

anchor

investors


Issue

opening



Periodical

compliance

with

SEBI

and

the

Exchanges





9


Significantly

gaining

popularity



Presently

destination

is

Singapore


Debt

and

equity

funds

are

replaced

by

Trust

F
unds


Contributors

to

the

fund

are

long

term

investors

with

expectation

of

fixed

yield




10


Business Trust (BT) offers investors an option to invest in
cash
-
generating assets (including infrastructure assets, real
estate, transportation assets, etc.)


The main parties involved in a BT structure are the BT, unit
holders and Trustee
-
manager (TM)


TM is both the trustee and the business manager.


BT is a “pure” cash flow structure


Certainty on distributing cash flows


A yield play valued by cash flows plus growth


Unlike a company, accounting profits are not
required to make distributions to unit holders


Established BT regime
-

There are numerous listed BTs on
SGX in various sectors (including Property Trusts, Shipping
Trusts, & Infrastructure /Port Trusts)

BT

Investors

SPVs

Trustee
Manager

Sponsor

Distributions

Investment in
units of BT

Management
fees

Management
Service

Fees

Asset management

Ownership of assets
(vested in Trustees)

Cash flow repatriation

Dividend/ interest/ etc

Asset

Sponsor

100%

>=26%

<=74%

Revenues
generated from
asset

11


Private

equity

is

a

collective

investment

scheme

which

are

typically

limited

partnership

funds

with

a

general

horizon

of

10

years


Looking

for

a

return

of

15
%

-

22
%


Exit

options



Appointment

of

Merchant

bankers


Process

of

Valuation


Term

Sheet


Appointment

of

Diligence

teams


Appointment

of

Lawyers


Signing

of

Share

Holders

Agreement


Compliances

of

Conditions

precedent



12


Short

Term



Working

Capital

Loans


Commercial

Papers



Long

Term


Term

Loans


Mezzanine

Term

Loans


ECBs

/

FCCBs


Debentures


Bonds


Take

out

finance


Credit

Enhancement

Schemes



13

Promise Less


Deliver More



14

THANK YOU