A Basic Guide to infrastructure business development investment and financing in India by netz capital advisors. Netz Capital provides services such as corporate finance, project finance, real estate finance, manufacturing finance, hospitality finance, ai
This document provides an overview of infrastructure business, investing, and financing in India. It discusses the size and investment needs of India's infrastructure industry, key sectors like transportation and power, contract types such as EPC and BOT, areas of focus for infrastructure companies, and financing options including equity, debt, bank lending guidelines, and policies for international banks. The purpose is to educate businesses and investors on opportunities in infrastructure and how to leverage financing to benefit from India's growth and infrastructure boom.
The presentation is about the Infrastructure sector in India.
It gives the components included in infrastructure sector and their category wise contribution.
The presentation is about the Infrastructure sector in India.
It gives the components included in infrastructure sector and their category wise contribution.
This PPT cover overview of Indian Industrial Infrastructure along with Power sector, coal sector, Aviation Sector, Road Transport, Indian Ports and few success stories.
Energy Infrastructure in India : A Reference BookInfraline Energy
India has a large energy sector which is growing rapidly and is endowed with primary and renewable energy resources. Information on data on India energy sector is widely available from large number of agencies however India does not have any one agency, like EIA USA to issue comprehensive authentic data on the sector. Energy sector professionals generally struggle to get a total picture at one place and it is a cumbersome job to get the essential and authentic information covering coal, oil and gas, power and renewable sectors. Keeping this in mind, InfralineEnergy has come up with a 'Reference Book on Energy Infrastructure in India'. For further details http://www.infraline.com/Reports.aspx?id=276&tlt=Energy-Infrastructure-in-India-A-Reference-Book-&sl=Business%20Report%20Series
It was a pleasure to share my thoughts on India infrastructure trends and placing it in context of changes in global manufacturing competitiveness landscape. The Q&A by the students were very stimulating. All the best to them!!!
This was delivered as a guest lecture for the elective - Infrastructure Development & Financing @ SJMSoM, IIT Bombay. Thank you Trupti Mishra for inviting me.
Recently, the Government has released a report of the task force on National Infrastructure Pipeline for 2019-2025.
Earlier, the Prime Minister in his Independence Day speech 2019 had highlighted that ₹100 lakh crore would be invested on infrastructure over the next 5 years.
o The emphasis would be on ease of living: safe drinking water, access to clean and affordable energy, healthcare for all, modern railway stations, airports, bus terminals and world-class educational institutes.
Task Force was constituted to draw up the National Infrastructure Pipeline (NIP) for each of the years from financial years 2019-20 to 2024-25.
Infrastructure and Economic Development in KenyaMulenge Peter
This is a PowerPoint document prepared by a group of 9 students where we were looking at the infrastructural development in Kenya and the economic value and nature of the infrastructure.
This PPT cover overview of Indian Industrial Infrastructure along with Power sector, coal sector, Aviation Sector, Road Transport, Indian Ports and few success stories.
Energy Infrastructure in India : A Reference BookInfraline Energy
India has a large energy sector which is growing rapidly and is endowed with primary and renewable energy resources. Information on data on India energy sector is widely available from large number of agencies however India does not have any one agency, like EIA USA to issue comprehensive authentic data on the sector. Energy sector professionals generally struggle to get a total picture at one place and it is a cumbersome job to get the essential and authentic information covering coal, oil and gas, power and renewable sectors. Keeping this in mind, InfralineEnergy has come up with a 'Reference Book on Energy Infrastructure in India'. For further details http://www.infraline.com/Reports.aspx?id=276&tlt=Energy-Infrastructure-in-India-A-Reference-Book-&sl=Business%20Report%20Series
It was a pleasure to share my thoughts on India infrastructure trends and placing it in context of changes in global manufacturing competitiveness landscape. The Q&A by the students were very stimulating. All the best to them!!!
This was delivered as a guest lecture for the elective - Infrastructure Development & Financing @ SJMSoM, IIT Bombay. Thank you Trupti Mishra for inviting me.
Recently, the Government has released a report of the task force on National Infrastructure Pipeline for 2019-2025.
Earlier, the Prime Minister in his Independence Day speech 2019 had highlighted that ₹100 lakh crore would be invested on infrastructure over the next 5 years.
o The emphasis would be on ease of living: safe drinking water, access to clean and affordable energy, healthcare for all, modern railway stations, airports, bus terminals and world-class educational institutes.
Task Force was constituted to draw up the National Infrastructure Pipeline (NIP) for each of the years from financial years 2019-20 to 2024-25.
Infrastructure and Economic Development in KenyaMulenge Peter
This is a PowerPoint document prepared by a group of 9 students where we were looking at the infrastructural development in Kenya and the economic value and nature of the infrastructure.
Project on SBI -
I would like to acknowledge a deep sense of gratitude to Mr. Hitesh Rawat, Senior Manager of State Bank of India at Kalbadevi Road, Mumbai for giving me the opportunity & time to work on this project and given me all vital input which has led to completion of this project. Without their guidance this project would have remained in pipe dream.
I am also thankful to State Bank of India employees, who directly & indirectly extended their co-operation and invaluable support to me
A flowchart is an outline or schematic drawing of the process your team is trying to measure or improve. It can also be a picture of an ideal process that you would like to use.
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International Standard for Lean Six Sigma
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How to Change Text to Diagrams (infodiagram visualization)Peter Zvirinsky
Guide how to change text information to visual diagram. Simple method - draw What, Where, How by diagram shapes. Diagram visualization examples. Useful for improving presentation slides, blog illustrations, teaching.
How to Change Text to Diagrams (infodiagram visualization)
Similar to A Basic Guide to infrastructure business development investment and financing in India by netz capital advisors. Netz Capital provides services such as corporate finance, project finance, real estate finance, manufacturing finance, hospitality finance, ai
A Basic guide to Infrastructure Business and Financing in India by Netz Capit...atulpkhekade
A Basic Guide to infrastructure business development investment and financing in India by netz capital advisors. Netz Capital provides services such as corporate finance, project finance, real estate finance, manufacturing finance, hospitality finance, aircraft finance, expansion capital, expansion finance and working capital.
This is the presentation that I made at Cityscape Jeddah in June this year. Some comments are available on several Middle East web sites such as Arab News link attached http://arabnews.com/economy/article453469.ece )
DMIC Summit - Implementation and Institutional Framework - Part - 2Resurgent India
The effective implementation of such large and complex project, involving multiple states and agencies calls for immaculate planning and a robust administrative structure. In order to ensure that the traditional pitfalls of project implementation are overcome, it is proposed that a Project Development approach be adopted, wherein each facet of the project is rigorously developed from an engineering, financial, contractual, environmental and social perspective, along with interlinkages, on prioritization and selective basis and prior to commencement of implementation
Engineering Procurement & Construction Making India Brick by Brickelithomas202
The EPC market in India has evolved over the last few years with increased project size and complexity. This has increased private clients and entry of several foreign players.
Objectives: To study the importance of Public Private Partnership in Indian infrastructure. To study the relevance of BOT model in the Indian Infrastructure sector. To identify the various parameters required for the financial analysis of a BOT project. To study the financial evaluation of a BOT Case study utilizing Net present value (NPV), Internal Rate of Return (IRR), Payback, Discounted Payback and Modified Internal rate of return (MIRR) methods. Methods: India ventured into building and maintenance of road infrastructure to meet its economic needs as inadequate transport infrastructure would be an impediment to the growth of a developing country. However, large scale infrastructure ventures like road projects increased the financial stress on government bodies. Findings: A wide gap existed between the investments required and the available financial sources for road infrastructure. With the perspective of exploiting private funding agencies for implementation of public projects, Build operate transport (BOT) model burgeoned. BOT structure includes the stipend of a concession by a legitimately enabled legislative power (the grantor) to an extraordinary reason organization (the concessionaire). Novelty: A BOT street project has a long start up working years in misfortune because of its long bump up period for the movement level to balance out. Thusly, the recovering of the venture would for the most part take quite a while.
DMIC will be an essential component of India’s future economic development. Implementation of DMIC Project requires huge investment for building up of infrastructure. It is envisaged that there will be primarily two categories of projects under the purview of state and central government agencies as:
Focusing on different type of PPP model and their corresponding suitability
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• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
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Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
NO1 Uk Black Magic Specialist Expert In Sahiwal, Okara, Hafizabad, Mandi Bah...Amil Baba Dawood bangali
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Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
A Basic Guide to infrastructure business development investment and financing in India by netz capital advisors. Netz Capital provides services such as corporate finance, project finance, real estate finance, manufacturing finance, hospitality finance, ai
1. Netz Capital Advisors LLP
2011
A Basic Guide to Infrastructure Business,
Investing and Financing in India
By Atul Khekade &
Ritesh Kakkad
2. About Netz Capital Advisors LLP
Netz Capital Advisors LLP advises companies in industries such as
infrastructure, Aviation, real estate, manufacturing and others in arranging
Finance for business expansion through Banks, NBFCs, Private Equity Funds
and Investment Trusts in India and globally. Netz Capital Advisors has
presence in USA, UK, India and Singapore. Netz Capital has advised transaction
in excess of $200 million and currently has mandates for $1 billion + in
Financing.
netzcapital.com
3. Table of Contents
1. Introduction
2. Indian Infrastructure Industry Facts
3. Sectors in Infrastructure
4. Type of Contracts
a. EPC Contracting
b. Built Operate Transfer (BOT)
5. Focus Areas for Infra Companies
6. Financing in Infrastructure
a. Equity
b. Debt
7. Banking Guidelines on Infrastructure
a. Domestic Banks and Funds
b. International Banks and Funds
8. Summary
netzcapital.com
4. 1. Introduction - Purpose of White Paper
Everyone staying in the India understands that India has always lagged in it's
infrastructure as compared to the growth of its population. With the growth in
Manufacturing, IT and many other industries, India has become a destination for Foreign
Direct Investment. Citing the lag of infrastructure as compared to India's growth, the
Government has given special boost to the infrastructure sector, especially the roads,
bridges and power.
Several business groups are increasingly foraying in to Infrastructure Industry to
catch the boom. Many investors are choosing to invest in infrastructure stocks.
Netz Capital has successfully advised various infrastructure businesses to arrange
expansion capital in various forms through banks, NBFCs, private equity funds and
Investment Trusts. Netz Capital through this white paper intends to make the reader
aware about the basics of Infrastructure business, opportunities in it and its various
financing models. Netz Capital understands that success from an infrastructure project
can only be enjoyed with a good financial management of the project in parallel to
delivering the quality.
Infrastructure is a tricky business and as most of the infrastructure contracts are
allotted by a bidding process, the budgets can get tight. That produces a risk of negative
cash flow and even bad infrastructure quality. It is a well understood fact that a
Successful Infrastructure company develops quality infrastructure within its assigned
budget and manages its finances in the right way and focuses on its core activity. This
White paper should give a basic understanding to an investor looking into infrastructure
stocks and businesses trying to catch the infrastructure boom and are looking into areas
of foray within infrastructure. By reading this document, a reader will be able to
understand the actual point from vast announcements and news that happen in the
infrastructure industry.
netzcapital.com
5. 2. Indian Infrastructure Industry Facts
Just to know the gigantic figures of India's infrastructure industry and its need, here are
some basic facts:
• Investment Required in India's Infrastructure Industry by 2019 - $1 Trillion
o Roads Requiring - $427 Billion
o Power Requiring - $288 Billion
o Railways Requiring - $ 281 Billion
• India's spending on infrastructure in the Year 2011 - $50 Billion
• Target Set by Ministry of Transport and Highways - Developing 20 Kms of Road
Every Day
• India will issue tax-free infrastructure bonds with a minimum tenure of 10 years,
which will have the potential to raise about $6.5 billion in fiscal year 2010/11,
according to government estimates, and the number could rise in 2011/12.
3. Sectors in Infrastructure
• Transport
o Roads and Highways
o Bridges
o Railway Lines
o Metro Rails
o Airports
o sea Ports
• Power
o Electricity Generation
o Electricity Transmission and Distribution
o Oil and Gas Pipelines
netzcapital.com
6. • Urban Infrastructure
o Dam
o Water Supply
o Solid Waste Management
o Sewerage and Storm water Drainage
• Industrial and Commercial Infrastructure
o Special Economic Zones (SEZ)
o Industrial Park
• Mass Market Housing
o Townships
o Cluster Development
4. Type of Contracts
a. EPC Contracting (Engineering, Procurement and Construction)
Most of the work in the infrastructure segment is typically handed out to
contractors on EPC Contracting basis after a bidding process. Government initiates a
project such as Highway, bridge, metro, airport or a sea port and it floats a tender
which details about subcontractor deliverables, time frames and Budget. Estimating
Government's budget, several eligible contractors then bid for the project.
Contractors and their bids are evaluated based on various factors such as past
experience, financial strength, management team and the project is handed over to
the eligible contractor. In EPC Contracting, Government is assumed to have taken
care of the land acquisition part on which the project is to be developed. The project
may well be on the Government land itself.
EPC Contracting has been a cash cow for various infrastructure firms which
were in existence even before India's recent growth and infrastructure boom.
netzcapital.com
7. b. Public Private Partnerships (PPP) and Built Operate Transfer (BOT)
India has so much infrastructure deficit that the Government has recently
chosen to give greater boost to infrastructure development by inviting private
parties to join hands with the Government. This frees up Government budget
and gives private parties the flexibility to fetch return from project over a longer
period of time such as 5-60 years in return of the equity infusion required up
front.
A Public Private partnership is called for when the economic benefits of
the infrastructure project go beyond its development value and time frame.
Public Private Partnerships may be required from raw stages of the project such
as land acquisition. Infrastructure projects under Public Private Partnerships get
required Government approvals and development rights. In return, the private
party acquires necessary land, develops the project, recovers it's investment
from the project's economic value and then hands over the project to the
Government after certain time frame which can go up to 100 years.
5. Focus Areas for Infra Companies
Ideally, an infrastructure company that wins a bid develops the project itself, however
due to the growth, competition and opportunities in the space, there is a clear cut focus
that infra companies have to develop while outsourcing rest of the activities to a
specialist.
• Sourcing of Contracts and Outsourcing:
Companies that focus on Contract sourcing have a strong management team with
infra expertise, quality development portfolio and strong financials. Many such
companies (prime contractors) are listed in the stock market and many will continue to.
These companies leverage their strengths to win contracts from the Government and
grow their order book on year on year basis. Job of these companies is to manage their
cash flows and outsource the work to quality subcontractors. Personnel working in
these companies have their expertise on Management, Financing, Government
Liaisoning and Project Planning, Architecture etc.
netzcapital.com
8. • Contract Execution Development - Subcontractors
The most common job of a Subcontractor is building works and civil engineering.
Subcontractor expertise lies in recruiting mass construction worker manpower.
Subcontractors have to manage Raw Material supply required for the project, earth
moving and construction equipment.
• Equipment Operator
Equipment Operator companies come in with some equity infusion in the business to
make the down payment for the equipments they are required to buy to provide on a
contractual basis to the subcontractor or the prime contractor. Equipment Operator or
leasing companies get their equipments financed from the bank and carry the risk of
monthly lease rentals which have to be met in addition to generating profit from
supplying or leasing their equipments.
Various Equipments used by Equipment Operators include :
o Soil Compactors
o Tyre Rollers
o Concrete Mixtures
o Concrete Pumps
o Piling Rigs
o Generators
o JCBs ..etc.
• Raw Material Supply and Processing
Raw Materials suppliers have access to natural resources such as mines which
contain basic raw material for infrastructure development. Companies focused on
Raw Material Supply and processing excavate raw material from the mines, process
it and supply it to contracting companies or companies that use the same material to
manufacture a next level raw material.
Basic Raw Materials include some of the following:
o Coal
o Sand
o iron
o Steel
o Glass …etc
netzcapital.com
9. 6. Financing in Infrastructure
The purpose of this document is to create awareness about the financial system for
infrastructure. India has always grown and will keep growing. The only people that will
benefit from this are those with Financial Intelligence, those who can get the right
financing for infrastructure business. A successful investor will be the one who invests in
a financially sound infrastructure company. The difference between big players and
small players in any industry like infrastructure is the size of their balance sheet and
their ability to leverage their balance sheet and Banks to arrange timely capital to
manage projects and subcontractors. All those who are not able to leverage the boom
through right understanding of financing, find themselves with empty pockets.
Intention of Netz Capital to write an Infrastructure white paper focusing on it's
financing is to educate the businesses and investors so that they can benefit from it by
adding wealth. Having the basic understanding of infrastructure, one can see the
difference between a company with Financial Strength and strong business model and
focus and a company without financial strength.
a. Equity : Built Operate Transfer, Public Private partnerships
Infrastructure unlike any other industry is a long term game. It takes time to
segregate natural resources such as land, clear litigations and plan a infrastructure
project. Public Private Partnerships and Build Operate Transfer projects need significant
upfront investment. The purpose of this investment can be land acquisition, setting up
critical initial infrastructure till the monetization is realized. This process gives long
term returns which is not financeable by a typical Debt Instrument in the banks. Simple
reason is that once a corporate draws down debt, it has to start paying the interest
immediately. In long term infrastructure projects, revenue generation and profit
realization takes significant time like 3 to 5 years.
Infrastructure Focused Private Equity Funds like IDFC offer a long term Debt in the
form of equity to the infrastructure project where revenue generation takes time.
Once the project is stabilized after 3 to 5 years, equity investor can get significant
valuation for its equity stake in the project resulting in a reasonable rate of return.
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10. b. Debt :
Most of the infra companies dealing in EPC contracting, equipment operation and
raw material supply have Debt as their favorite instrument due to the ability to
immediately generate income and profit to repay the Debt interest.
• Revolving Credit Line for Subcontractors
Focus and benefit of Prime Contracting company lies in bagging Government
Contracts and growing their subcontractors. Their focus is managing the cash flow and
revenue delays between costs involved in development and payment from the
Government.
A Typical finance required for an infrastructure company is revolving line of
credit from the banks that allow them to meet raw material cost and subcontractor
payments while the Government releases it's payments in the phase wise manner.
Due to this, the prime contracting company can focus on project planning and
bagging extra contracts while the subcontractor can focus on quality development and
timely completion.
• Equipment Finance
Banks like HDFC Bank or NBFcs like SREI Equipment Finance use their funds to
buy the equipment (asset), calculate it's use of term and offer it to contracting
companies on a model where contracting companies can make reasonable monthly
hire or leases to carry out construction. Private Investors or equipment leasing
companies work on the same principle.
• Working Capital
Working Capital is a basic type of finance required for infrastructure companies to
meet their internal financing needs. A Working capital might be used for hiring
workers, buying assets, advertising and marketing.
• SBLCs
A Standby letter of Credit is used by the raw materials importer or purchaser to
issue to a raw material exporter to guarantee the payment while the raw material is
purchased on Credit. The importer needs to be issue a SBLC from a Bank. The importer
needs to convince the bank that he can actually buy the raw materials and might need
to issue personal or corporate guarantees and/or collateralize assets.
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11. 7. Banking Guidelines on infrastructure
a. Domestic Banks Policy for Indian Infrastructure
Reserve Bank of India has categorized "infrastructure lending" as a separate sector
and has allowed banks to lend to the sector with lower interest rate and relaxed credit
norms. Even Non-Banking Financial Institutions (NBFCs) which have more than 75% of
it's exposure to infrastructure segment are now categorized separately as
"Infrastructure Finance Institutions". These institutions enjoy benefits such as lower
capital adequacy, relaxed credit norms and increased credit limits. This is a very
favorable arrangement considering the longer term return nature of infrastructure
projects.
b. International Banks Policy for Indian Infrastructure
Foreign Banks lending or investing into Indian infrastructure is qualified as ECB
"External Commercial Borrowing" and even for ECB, Reserve Bank of India has
announced friendly policies for "infrastructure lending". The ECB is however under
"Approval route" meaning there is a formal application to be made to RBI before
bringing down overseas money into Indian infrastructure. There is a $500 million limit
on ECB per financial year that can be brought down by a single company.
8. Summary
Infrastructure is a tricky sector. Companies in infra sector suffer small margins, cost
overruns and Debt burdens that result from long term nature of this industry. This
makes is particularly difficult and important to manage cash flow behind the infra
sector. Businesses in infra and investors need to be very alert about the financial risks
yet have to be enthusiastic about the vast opportunities in the industry and global
capital that is coming in to India waiting to be invested in the sector.
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12. Contact Information:
Mr.Anil Yadav
President-Finance
Netz Capital Advisors LLP
Email: anil at netzcapital dot com
Phone : +91 932484716 /91-22-28631151
http://www.netzcapital.com
Disclaimer
Whilst every effort has been made to ensure the accuracy of the information contained in this publication,
neither the netz capital nor any of its members past present or future warrants its accuracy or will, regardless of
its or their negligence, assume liability for any foreseeable or unforeseeable use made thereof, which liability is
hereby excluded. Consequently, such use is at the recipient’s own risk on the basis that any use by the recipient
constitutes agreement to the terms of this disclaimer. The recipient is obliged to inform any subsequent recipient
of such terms.
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