This document provides information on External Commercial Borrowings (ECB) and Foreign Currency Convertible Bonds (FCCB) in India. It defines ECB and FCCB, outlines the regulatory guidelines around raising ECB/FCCB, including eligible borrowers and lenders, permissible end-uses, parking of funds, and more. It also provides statistical data on historical inflows of ECB to India and an example of an FCCB issuance by Suzlon Energy Limited.
This document provides an overview of External Commercial Borrowings (ECB) policy and procedures in India. It discusses the key aspects of ECB including the regulatory framework, eligible borrowers and lenders, amount and maturity limits, end uses of funds, security/collateral requirements, and ongoing compliance procedures. The document separates the rules for ECB under the automatic route versus the approval route and provides details on important processes like obtaining loan registration numbers and recurring reporting requirements.
External commercial borrowing (ECB) refers to commercial loans taken by eligible resident entities from non-resident lenders with a minimum maturity of 3 years. ECB can be raised through various modes like bank loans, securitized instruments, and suppliers' credit. There are two routes to raise ECB - automatic route, which allows borrowing up to certain limits, and approval route beyond those limits or for non-eligible borrowers. ECB raised funds for infrastructure projects and helped corporates meet their capital requirements at relatively lower rates.
The document provides information on External Commercial Borrowings (ECB) in India. It discusses that ECB refers to commercial loans from foreign sources and is a source of funds for expanding existing capacity or new investments. There are two routes to raise ECB - automatic route which does not require RBI approval for eligible borrowers within certain limits, and approval route which requires RBI approval. Eligible borrowers under automatic route include corporates and housing finance companies, while approval route has additional eligible categories like FIIs dealing with infrastructure. Common recognized lenders include international banks, capital markets and multilateral institutions.
Financing Options for foreign companies in IndiaSAS Partners
Various funding options available for foreign investors to infuse the funds to their Indian investments. External Commercial Borrowing is one among the options which became highly attractive and beneficial to both the investors as well as the Indian entities pursuant to the recent liberalisation of policy. Corporates can broaden their funding plans considering the company-specific requirements.
The RBI has issued circular No. 32 dated 24th Nov 2015 revising the regulations related to External commercial borrowings. There are lot of key changes brought for ease of obtaining foreign funds by Indian parties. The list of eligible borrowers have been increased. the list of lenders from which the ECB can be taken, have been increased. The end use restrictions have mostly been removed with only the small negative list of end-use restrictions for which it cannot be used……therefore in the Foreign Funds world now, we may say that Negative is the new positive.
External Commercial Borrowings (ECB) and Foreign Currency Convertible Bonds (FCCB) are two sources of foreign funding for Indian companies. ECB refers to commercial loans taken from overseas lenders, while FCCBs are debt instruments issued abroad that can be converted into equity shares.
There are two routes for raising ECB/FCCB - automatic and approval. Certain companies in infrastructure, export, and manufacturing sectors can access funds under the automatic route up to $20-500 million based on maturity. Other companies require RBI approval. ECB/FCCB can be used for capital goods imports, overseas investment, but not stock markets or real estate. Prepayment and refinancing rules apply
This document provides information on External Commercial Borrowings (ECB) and Foreign Currency Convertible Bonds (FCCB) in India. It defines ECB and FCCB, outlines the regulatory guidelines around raising ECB/FCCB, including eligible borrowers and lenders, permissible end-uses, parking of funds, and more. It also provides statistical data on historical inflows of ECB to India and an example of an FCCB issuance by Suzlon Energy Limited.
This document provides an overview of External Commercial Borrowings (ECB) policy and procedures in India. It discusses the key aspects of ECB including the regulatory framework, eligible borrowers and lenders, amount and maturity limits, end uses of funds, security/collateral requirements, and ongoing compliance procedures. The document separates the rules for ECB under the automatic route versus the approval route and provides details on important processes like obtaining loan registration numbers and recurring reporting requirements.
External commercial borrowing (ECB) refers to commercial loans taken by eligible resident entities from non-resident lenders with a minimum maturity of 3 years. ECB can be raised through various modes like bank loans, securitized instruments, and suppliers' credit. There are two routes to raise ECB - automatic route, which allows borrowing up to certain limits, and approval route beyond those limits or for non-eligible borrowers. ECB raised funds for infrastructure projects and helped corporates meet their capital requirements at relatively lower rates.
The document provides information on External Commercial Borrowings (ECB) in India. It discusses that ECB refers to commercial loans from foreign sources and is a source of funds for expanding existing capacity or new investments. There are two routes to raise ECB - automatic route which does not require RBI approval for eligible borrowers within certain limits, and approval route which requires RBI approval. Eligible borrowers under automatic route include corporates and housing finance companies, while approval route has additional eligible categories like FIIs dealing with infrastructure. Common recognized lenders include international banks, capital markets and multilateral institutions.
Financing Options for foreign companies in IndiaSAS Partners
Various funding options available for foreign investors to infuse the funds to their Indian investments. External Commercial Borrowing is one among the options which became highly attractive and beneficial to both the investors as well as the Indian entities pursuant to the recent liberalisation of policy. Corporates can broaden their funding plans considering the company-specific requirements.
The RBI has issued circular No. 32 dated 24th Nov 2015 revising the regulations related to External commercial borrowings. There are lot of key changes brought for ease of obtaining foreign funds by Indian parties. The list of eligible borrowers have been increased. the list of lenders from which the ECB can be taken, have been increased. The end use restrictions have mostly been removed with only the small negative list of end-use restrictions for which it cannot be used……therefore in the Foreign Funds world now, we may say that Negative is the new positive.
External Commercial Borrowings (ECB) and Foreign Currency Convertible Bonds (FCCB) are two sources of foreign funding for Indian companies. ECB refers to commercial loans taken from overseas lenders, while FCCBs are debt instruments issued abroad that can be converted into equity shares.
There are two routes for raising ECB/FCCB - automatic and approval. Certain companies in infrastructure, export, and manufacturing sectors can access funds under the automatic route up to $20-500 million based on maturity. Other companies require RBI approval. ECB/FCCB can be used for capital goods imports, overseas investment, but not stock markets or real estate. Prepayment and refinancing rules apply
This document discusses guidelines for External Commercial Borrowing (ECB) in India according to the Foreign Exchange Management Act (FEMA). It outlines the automatic and approval routes for raising ECB, eligible borrowers, recognized lenders, permitted end uses, and average maturity limits. Key points include ECB being used by Indian corporations and PSUs to access foreign money, automatic route not requiring RBI approval, limits of up to $750M for most corporates and $200M for service sector corporates, and minimum average maturities of 3-5 years depending on the amount borrowed.
This document provides details on India's framework for External Commercial Borrowings (ECBs). It outlines the statutory provisions governing ECBs, the three tracks for raising ECB loans, parameters of ECBs including eligible borrowers and lenders, forms of borrowing, available routes, and cost ceilings. Key points covered include that ECBs can be raised under the automatic or approval route, eligible borrowers include companies, NBFCs, and infrastructure entities, and recognized lenders include international banks, capital markets, and foreign equity holders.
Investment in real estate sector in indiatapask7889
This document discusses investment opportunities for foreigners in India's real estate and housing sector. There are two main routes for investment - the direct route which allows Non-Resident Indians to invest up to 100% in projects, and the alternate route which requires Reserve Bank of India approval for foreign investors to purchase between 51-74% equity in an Indian company developing real estate projects. The alternate route has fewer restrictions on minimum investment amounts but requires RBI approval for financial transactions. Real estate development in India is considered high risk but also high return, with significant growth expected over the next 10-15 years.
1) Consortium banking involves multiple banks and financial institutions jointly financing a single borrower, with common documentation and risk sharing.
2) The total loan is divided among the participating banks, with the bank providing the largest share acting as the lead bank coordinating with the borrower.
3) While consortiums allow for risk sharing, they also introduce new risks that must be defined and allocated between the parties through contracts.
This document outlines India's External Commercial Borrowing (ECB) policy, which allows Indian companies to borrow funds in foreign currency from non-resident lenders with minimum maturities of 3 years. There are two routes for ECB - Automatic and Approval. The Automatic Route allows eligible corporates to borrow up to $500 million annually from recognized lenders at specified all-in-cost ceilings. The Approval Route requires RBI approval and allows additional borrowing or relaxation of certain criteria. Borrowers must report ECB deals to RBI for monitoring and dissemination.
This document provides an overview of foreign direct investment (FDI) policy and procedures in India. It defines key terms like resident, non-resident Indian, and person of Indian origin. It describes the different types of FDI, entities permitted to invest, instruments used, and the process for allotting shares to foreign investors. The document also outlines prohibited sectors for FDI, rules for investment in firms and limited liability partnerships, and procedures for transferring shares. It discusses recent changes to FDI regulations through the Finance Act of 2015.
Principles of lending and Types of FinancingYousuf Razzaq
This document discusses principles of lending in banking. It provides details about group members working on the project, principles of lending including safety, liquidity, security and remuneration. It describes factors considered for lending including character, capacity, capital, conditions and cash flow. It also discusses types of fund based and non-fund based finances and their features. Key characteristics of individual and corporate borrowers are outlined.
1) FCCBs are quasi-debt instruments that give investors the option to convert bonds into equity shares of the issuing company, providing downside protection of guaranteed bond payments and upside potential if the stock price appreciates.
2) RBI guidelines state that Indian companies can issue FCCBs up to $500M annually, subject to certain criteria like minimum net worth and maturity periods of 3-5 years. FCCBs can be issued through automatic or RBI approval routes.
3) FCCBs offer benefits to both companies and investors. Companies raise capital in foreign currency at lower interest rates than market rates. Investors receive attractive yields and potential returns if the stock price exceeds the preset conversion price upon maturity.
This document discusses investment opportunities for foreigners in India's real estate sector. There are two main routes for investment - the direct route for NRIs to invest up to 100% and the alternate route requiring RBI approval for foreign investors to own between 51-74% of an Indian company developing real estate projects. The alternate route has fewer minimum investment requirements but requires RBI approval for money transfers. Real estate can include development of residential and commercial projects, townships, and infrastructure. The document promotes partnering with the company for real estate investments that can benefit from India's growing sector.
This document discusses investment opportunities for foreigners in India's real estate sector. There are two main routes for investment - the direct route for NRIs to invest up to 100% and the alternate route requiring RBI approval for foreign investors to own between 51-74% of an Indian company developing real estate projects. The alternate route has fewer minimum investment requirements but requires RBI approval for money transfers. Real estate can include development of residential and commercial projects, townships, and infrastructure. The document promotes partnering with the company for real estate investments that can benefit from India's growing sector.
Chaim cirtronenbaum | All Financing Option in Real EstateChaim Citronenbaum
Chaim Citronenbaum has more than 10 years of experience in real estate. He is the owner of a real estate firm. He describes here all the financing option in real estate.
The document discusses various forms of lending provided by banks. It describes cash finance/cash credit, overdrafts, loans, purchase and discounting of bills, and hire-purchase/leasing finance. Cash finance allows borrowing up to a limit as needed, while overdrafts provide temporary adjustments. Loans involve lump sums paid for a period at interest. Purchase and discounting of bills advances money by deducting discount from bill values. Hire-purchase/leasing finance allows purchasing goods through installments. The principles of lending like safety, liquidity, security and diversification of risk are also outlined.
This document discusses loan pricing models, specifically analyzing the "cost-plus pricing" model for banks in the United Arab Emirates, Saudi Arabia, and Egypt from 2009-2013. It finds that Egypt has higher non-performing loans and lower bank capital ratios, indicating it is riskier. UAE has the highest capital ratios, suggesting more stability. Regression analysis confirms cost-plus pricing factors like capital requirements and default probabilities affect loan rates differently in each country. The document also examines credit scoring models, identifying borrower risk levels that determine interest rates.
The document discusses financing options in the Indian real estate market. It notes that real estate is a fast-growing sector that contributes 5% to India's GDP. The government is supporting the sector through funding for affordable housing projects, increased FDI limits, and tax deductions for home loans. Emerging financing options like Real Estate Investment Trusts (REITs) and Real Estate Mutual Funds (REMFs) provide smaller investors more liquid access to real estate returns while offering benefits like diversification and professional management.
This document outlines prudential norms for classification, valuation, and operation of investment portfolios by banks in India. It discusses guidelines for banks' investment policies, ready forward contracts in government securities, transactions through SGL accounts, use of bank receipts, engagement of brokers, auditing of investments, and classification of investments as held-to-maturity, available-for-sale or held-for-trading. It also covers valuation of investments, non-performing investments, uniform accounting for repo/reverse repo transactions, and portfolio management on behalf of clients.
The 2008 Financial Crisis changed the world of Banking. Many malpractices by the Banks and various financial institutions came into light and the regulators started scrutinizing and penalizing them. The world’s most important number “LIBOR” came under the sword of the Regulators. In this article we will explore the origins and the fall of the once revered LIBOR rate.
The document discusses India's debt market and reforms taken to develop it. It notes that the debt market is an important source of funds, especially for developing economies like India. It also discusses various reforms taken by the Reserve Bank of India and the government to promote liquidity, deepen the corporate bond market, and improve debt management. This includes setting up a Public Debt Management Agency, shifting regulation of government bonds from RBI to SEBI, allowing banks to hold corporate bonds long-term, and reviewing disclosure requirements. The goal is to better meet real sector needs, ensure financial stability, and develop new classes of investors in India's growing economy.
This document discusses sources of finance for real estate development. It covers both long-term and short-term sources. Long-term sources include equity capital, which can come from personal savings, contributions in-kind, or company profits reinvested. Equity capital provides advantages like no fixed repayment dates but risks include being last to receive assets if the company defaults. Overall equity capital is well-suited for investing in real estate development companies due to risk sharing, though personal investments carry single-owner risks.
The document discusses principles of good lending such as safety, purpose of advance, borrower character, security, and liquidity. It also covers analyzing financial statements to evaluate creditworthiness, term lending for fixed assets that is repaid in installments, and appraising term loans based on technical, economic, and financial feasibility. Additionally, it mentions styles of lending like cash credit, overdrafts, and loans as well as modes of creating a charge like lien, pledge, and mortgage.
Equity Investments in India for US & Canada NRIsRamnath Rao
This document provides an overview of investment options for NRIs from the USA and Canada wanting to invest in Indian equities. It discusses that NRIs can invest in mutual funds and direct equities through certain fund houses and the Portfolio Investment Scheme respectively, but there are some limitations and regulations like FATCA. Portfolio management services are also an option for NRIs to invest in direct equities. The document outlines various fees and Indian tax liabilities associated with different investment avenues. It also describes the services provided by De Emerald such as account setup assistance, tax filing and coordination with service providers.
Will the new ECB frameworks change the borrowing strategies for Indian Corpor...SAS Partners
The new ECB framework introduced by the RBI in 2019 simplified and merged various categories of foreign borrowing. Key changes include expanding eligible borrowers and lenders, standardizing maturity periods, increasing individual borrowing limits, relaxing hedging requirements, and introducing INR borrowing. The revisions aim to improve access to foreign funding and make regulations more consistent for Indian corporates.
This document discusses guidelines for External Commercial Borrowing (ECB) in India according to the Foreign Exchange Management Act (FEMA). It outlines the automatic and approval routes for raising ECB, eligible borrowers, recognized lenders, permitted end uses, and average maturity limits. Key points include ECB being used by Indian corporations and PSUs to access foreign money, automatic route not requiring RBI approval, limits of up to $750M for most corporates and $200M for service sector corporates, and minimum average maturities of 3-5 years depending on the amount borrowed.
This document provides details on India's framework for External Commercial Borrowings (ECBs). It outlines the statutory provisions governing ECBs, the three tracks for raising ECB loans, parameters of ECBs including eligible borrowers and lenders, forms of borrowing, available routes, and cost ceilings. Key points covered include that ECBs can be raised under the automatic or approval route, eligible borrowers include companies, NBFCs, and infrastructure entities, and recognized lenders include international banks, capital markets, and foreign equity holders.
Investment in real estate sector in indiatapask7889
This document discusses investment opportunities for foreigners in India's real estate and housing sector. There are two main routes for investment - the direct route which allows Non-Resident Indians to invest up to 100% in projects, and the alternate route which requires Reserve Bank of India approval for foreign investors to purchase between 51-74% equity in an Indian company developing real estate projects. The alternate route has fewer restrictions on minimum investment amounts but requires RBI approval for financial transactions. Real estate development in India is considered high risk but also high return, with significant growth expected over the next 10-15 years.
1) Consortium banking involves multiple banks and financial institutions jointly financing a single borrower, with common documentation and risk sharing.
2) The total loan is divided among the participating banks, with the bank providing the largest share acting as the lead bank coordinating with the borrower.
3) While consortiums allow for risk sharing, they also introduce new risks that must be defined and allocated between the parties through contracts.
This document outlines India's External Commercial Borrowing (ECB) policy, which allows Indian companies to borrow funds in foreign currency from non-resident lenders with minimum maturities of 3 years. There are two routes for ECB - Automatic and Approval. The Automatic Route allows eligible corporates to borrow up to $500 million annually from recognized lenders at specified all-in-cost ceilings. The Approval Route requires RBI approval and allows additional borrowing or relaxation of certain criteria. Borrowers must report ECB deals to RBI for monitoring and dissemination.
This document provides an overview of foreign direct investment (FDI) policy and procedures in India. It defines key terms like resident, non-resident Indian, and person of Indian origin. It describes the different types of FDI, entities permitted to invest, instruments used, and the process for allotting shares to foreign investors. The document also outlines prohibited sectors for FDI, rules for investment in firms and limited liability partnerships, and procedures for transferring shares. It discusses recent changes to FDI regulations through the Finance Act of 2015.
Principles of lending and Types of FinancingYousuf Razzaq
This document discusses principles of lending in banking. It provides details about group members working on the project, principles of lending including safety, liquidity, security and remuneration. It describes factors considered for lending including character, capacity, capital, conditions and cash flow. It also discusses types of fund based and non-fund based finances and their features. Key characteristics of individual and corporate borrowers are outlined.
1) FCCBs are quasi-debt instruments that give investors the option to convert bonds into equity shares of the issuing company, providing downside protection of guaranteed bond payments and upside potential if the stock price appreciates.
2) RBI guidelines state that Indian companies can issue FCCBs up to $500M annually, subject to certain criteria like minimum net worth and maturity periods of 3-5 years. FCCBs can be issued through automatic or RBI approval routes.
3) FCCBs offer benefits to both companies and investors. Companies raise capital in foreign currency at lower interest rates than market rates. Investors receive attractive yields and potential returns if the stock price exceeds the preset conversion price upon maturity.
This document discusses investment opportunities for foreigners in India's real estate sector. There are two main routes for investment - the direct route for NRIs to invest up to 100% and the alternate route requiring RBI approval for foreign investors to own between 51-74% of an Indian company developing real estate projects. The alternate route has fewer minimum investment requirements but requires RBI approval for money transfers. Real estate can include development of residential and commercial projects, townships, and infrastructure. The document promotes partnering with the company for real estate investments that can benefit from India's growing sector.
This document discusses investment opportunities for foreigners in India's real estate sector. There are two main routes for investment - the direct route for NRIs to invest up to 100% and the alternate route requiring RBI approval for foreign investors to own between 51-74% of an Indian company developing real estate projects. The alternate route has fewer minimum investment requirements but requires RBI approval for money transfers. Real estate can include development of residential and commercial projects, townships, and infrastructure. The document promotes partnering with the company for real estate investments that can benefit from India's growing sector.
Chaim cirtronenbaum | All Financing Option in Real EstateChaim Citronenbaum
Chaim Citronenbaum has more than 10 years of experience in real estate. He is the owner of a real estate firm. He describes here all the financing option in real estate.
The document discusses various forms of lending provided by banks. It describes cash finance/cash credit, overdrafts, loans, purchase and discounting of bills, and hire-purchase/leasing finance. Cash finance allows borrowing up to a limit as needed, while overdrafts provide temporary adjustments. Loans involve lump sums paid for a period at interest. Purchase and discounting of bills advances money by deducting discount from bill values. Hire-purchase/leasing finance allows purchasing goods through installments. The principles of lending like safety, liquidity, security and diversification of risk are also outlined.
This document discusses loan pricing models, specifically analyzing the "cost-plus pricing" model for banks in the United Arab Emirates, Saudi Arabia, and Egypt from 2009-2013. It finds that Egypt has higher non-performing loans and lower bank capital ratios, indicating it is riskier. UAE has the highest capital ratios, suggesting more stability. Regression analysis confirms cost-plus pricing factors like capital requirements and default probabilities affect loan rates differently in each country. The document also examines credit scoring models, identifying borrower risk levels that determine interest rates.
The document discusses financing options in the Indian real estate market. It notes that real estate is a fast-growing sector that contributes 5% to India's GDP. The government is supporting the sector through funding for affordable housing projects, increased FDI limits, and tax deductions for home loans. Emerging financing options like Real Estate Investment Trusts (REITs) and Real Estate Mutual Funds (REMFs) provide smaller investors more liquid access to real estate returns while offering benefits like diversification and professional management.
This document outlines prudential norms for classification, valuation, and operation of investment portfolios by banks in India. It discusses guidelines for banks' investment policies, ready forward contracts in government securities, transactions through SGL accounts, use of bank receipts, engagement of brokers, auditing of investments, and classification of investments as held-to-maturity, available-for-sale or held-for-trading. It also covers valuation of investments, non-performing investments, uniform accounting for repo/reverse repo transactions, and portfolio management on behalf of clients.
The 2008 Financial Crisis changed the world of Banking. Many malpractices by the Banks and various financial institutions came into light and the regulators started scrutinizing and penalizing them. The world’s most important number “LIBOR” came under the sword of the Regulators. In this article we will explore the origins and the fall of the once revered LIBOR rate.
The document discusses India's debt market and reforms taken to develop it. It notes that the debt market is an important source of funds, especially for developing economies like India. It also discusses various reforms taken by the Reserve Bank of India and the government to promote liquidity, deepen the corporate bond market, and improve debt management. This includes setting up a Public Debt Management Agency, shifting regulation of government bonds from RBI to SEBI, allowing banks to hold corporate bonds long-term, and reviewing disclosure requirements. The goal is to better meet real sector needs, ensure financial stability, and develop new classes of investors in India's growing economy.
This document discusses sources of finance for real estate development. It covers both long-term and short-term sources. Long-term sources include equity capital, which can come from personal savings, contributions in-kind, or company profits reinvested. Equity capital provides advantages like no fixed repayment dates but risks include being last to receive assets if the company defaults. Overall equity capital is well-suited for investing in real estate development companies due to risk sharing, though personal investments carry single-owner risks.
The document discusses principles of good lending such as safety, purpose of advance, borrower character, security, and liquidity. It also covers analyzing financial statements to evaluate creditworthiness, term lending for fixed assets that is repaid in installments, and appraising term loans based on technical, economic, and financial feasibility. Additionally, it mentions styles of lending like cash credit, overdrafts, and loans as well as modes of creating a charge like lien, pledge, and mortgage.
Equity Investments in India for US & Canada NRIsRamnath Rao
This document provides an overview of investment options for NRIs from the USA and Canada wanting to invest in Indian equities. It discusses that NRIs can invest in mutual funds and direct equities through certain fund houses and the Portfolio Investment Scheme respectively, but there are some limitations and regulations like FATCA. Portfolio management services are also an option for NRIs to invest in direct equities. The document outlines various fees and Indian tax liabilities associated with different investment avenues. It also describes the services provided by De Emerald such as account setup assistance, tax filing and coordination with service providers.
Will the new ECB frameworks change the borrowing strategies for Indian Corpor...SAS Partners
The new ECB framework introduced by the RBI in 2019 simplified and merged various categories of foreign borrowing. Key changes include expanding eligible borrowers and lenders, standardizing maturity periods, increasing individual borrowing limits, relaxing hedging requirements, and introducing INR borrowing. The revisions aim to improve access to foreign funding and make regulations more consistent for Indian corporates.
This document provides an overview of various types of banking in India including commercial banking, unit banking, branch banking, retail banking, wholesale banking, and universal banking. It discusses the key features and merits and demerits of each type. It also summarizes the Reserve Bank of India Act of 1934 and the Banking Regulation Act of 1949, including requirements around cash reserve ratio, statutory liquidity ratio, and prudential norms. Finally, it outlines the structure of the Indian banking system.
The purpose of this presentation is to study A Pioneer Islamic Bank that is considered One of the most important private commercial Islamic Banks since establishment.
The study will cover the various categories of services and activities undertaken by the bank as an Islamic financial intermediary.
This analysis, also, examines the relation between the theory of Islamic banking and the real practices and highlights the dichotomies, if any.
The name of the Bank has been left intentionally anonymous for reasons of privacy protection.
This document discusses investment opportunities for foreigners in India's real estate sector. There are two main routes for investment - the direct route for NRIs to invest up to 100% and the alternate route requiring RBI approval for foreign investors to own between 51-74% of an Indian company developing real estate projects. The alternate route has fewer minimum investment requirements but requires RBI approval for money transfers. Real estate can include development of residential and commercial projects, townships, and infrastructure. The document promotes partnering with the company for smaller real estate projects in India that could benefit from the country's expected growth in real estate over the next 10-15 years.
Enterslice help you to Incorporate NBFC Company in india.we also provide software to manage NBFC Business like NBFC Software,NBFC-ND Compilance,Money Changer Compilance,funding in NBFC and takeover of NBFC.
This document provides an overview of the key rules and regulations governing foreign direct investment, external commercial borrowings, and overseas direct investment in India. It discusses the various routes for raising foreign funds in India, including the foreign direct investment route, debt route, and overseas direct investment route. It outlines the sector-specific conditions, caps, eligible borrowers and lenders, pricing guidelines, and reporting requirements for each route. The document also examines some hypothetical case studies and structures typically used to raise foreign funds in India.
This document discusses various aspects of raising funds domestically and globally. It begins by outlining the key topics that will be covered, including the process of fund raising, roles of different players, regulatory environment, types of instruments, costs, risks, and challenges. It then provides details on the introduction and process of fund raising. It describes the roles of various players like government, regulators, service providers, and media. It also discusses the regulatory environment, domestic and global instruments, specialized instruments, costs, risks, and challenges related to fund raising.
This document outlines 6 new funding options from 2ndHomesFinance.com, including equity funds, joint venture funds, loan funds, and options using bank guarantees. The equity fund provides up to 100% financing with no interest required in exchange for equity in the applicant's project. The joint venture fund also provides up to 85% financing and requires the lender take an equity position of up to 50% in the project. A loan fund option provides up to 100% financing at interest rates from 2-4.5% depending on the applicant's equity contribution. A convertible soft loan offers near-zero interest financing using monetary collateral equal to the project costs. Global project funding of up to 100% of costs is also
Why Commercial Real Estate Debt is the Perfect Partner for Peer-to-Peer (P2P) Lending: P2P Lending has undoubtedly revolutionised the traditional banking and lending industries. The introduction of new technology and the ability to draw and process information quickly has left the traditional finance sector napping.
At Proplend, we continuously apply the latest technologies adopting them alongside traditional lending models to ensure our offering is as efficient, transparent and inclusive as possible.
The document discusses various types of corporate banking services provided by banks to corporate clients. It describes funded services like working capital finance, short term finance, and bill discounting. It also discusses non-funded services like letters of credit and bank guarantees. Finally, it summarizes external commercial borrowings, import trade credit, and foreign currency options for corporate financing.
The document provides an overview of the Indian securities market, including its key participants and functions. It discusses the primary market where companies first issue securities, and the intermediaries involved such as merchant bankers. It also covers the secondary market, how trading works on the exchanges through order matching systems, and the clearing and settlement process where obligations are calculated and funds and securities are transferred.
This document provides information about non-banking financial companies (NBFCs) in India. It defines NBFCs as non-banking institutions that conduct lending, acquisition, and leasing activities but do not accept demand deposits. NBFCs are divided into categories including asset finance companies, investment companies, and loan companies. Key differences between NBFCs and banks are that NBFCs cannot accept demand deposits or issue checks. The Reserve Bank of India regulates NBFCs and places restrictions on their acceptance of public deposits.
The real estate market has been impacted by inflationary prices, increased opportunities for remote work, and racial justice challenges to historical disinvestment in communities of color. This Financial Poise webinar examines the types of real estate projects that help stabilize and strengthen our population centers, including affordable housing and other types of community developments, and explains the various types of economic incentives available to investors who participate in these projects.
Part of the webinar series: REAL ESTATE INVESTING 101 - 2022
See more at https://www.financialpoise.com/webinars/
The document provides an overview of the Indian securities market, including its key segments and participants. It discusses the primary market process for floating new issues through public offerings, rights issues, and private placements. It also summarizes the roles of various intermediaries like merchant bankers and registrars involved in the issuance process. Additionally, it covers secondary market trading and settlement, and describes the structure and regulation of the Indian financial system.
FALL IN RUPEE - A MAJOR CONCERN FOR THE ECONOMYNeha Sharma
The recent fall of the Indian rupee visà-vis US Dollar and other major currencies have caused serious concern in the business, profession and Indian intellectuals. The fall of Indian rupee indicate serious inherent weakness of the Indian economy and in spite of some arrests of the inflationary tendency the overall outlook is very weak. Some major indicators include:
This short guide provides you with an introduction to how you can earn attractive returns of between 5-12% pa* by investing in Peer-to-Peer Loans secured against UK income producing Commercial Property.
*After fees, but before bad debts & taxes. Capital at risk
The document discusses a proposed real estate venture fund called the Parijat Fund that would invest in residential and commercial real estate development projects in major Indian cities. The fund would be open only to non-resident Indians, persons of Indian origin, and high net worth Indian individuals and corporations to avoid regulatory issues. It aims to raise $50 million and targets a gross return on equity of 25% annually for investors over a 5-year period by partnering with reputable Indian developers on new and existing projects.
Learn why Commercial Real Estate Debt is the perfect partner for Peer-to-Peer Lending. Placing the words “commercial property” in front of p2p lending is not something you should fret about. In fact, greater capital protection from the property and longer tenancies make Commercial Property P2P Lending one of the most secure forms of p2p lending, plus it offers favourable returns of 5-12% pa (after fees, but before bad debts and taxes).
Similar to Chaim cirtronenbaum | Importance of Finance in Real Estate (20)
Discover Yeni Eyup Evleri 2, nestled among the rising values of Eyupsultan, offering the epitome of modern living in Istanbul.
With its spacious living areas, contemporary architecture, and meticulous details, Yeni Eyup Evleri 2 is poised to be the star of your happiest moments. Situated in the new favorite district of Eyupsultan, claim your spot and unlock the doors to a peaceful life alongside your loved ones. Nestled next to the historical and natural beauties of Eyupsultan, embrace the comfort of modern living and rediscover life.
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3. The asset classes in real estate sector can be
divided into :
Residential
Commercial/IT offices
Retail
Hospitality segments
Industrial Parks/SEZs
Warehousing
INTRODUCTION : REAL ESTATE
4. SECTOR DYNAMICS
Driving Force
Residential – changing demographics, urbanization, ease of finance
Office Space – IT, Telecom and BPO;
Retail – new retail formats and entry of global brands;
Hotels – domestic business travel and domestic tourism; and
Warehouses – organized retailing and requirement of logistic services.
Current annual Indian real estate market size is estimated @ US$ 40 bn
• Residential 70%
• Commercial segment 25%
• Organized retail, industrial warehouse and hospitality combined at 5%
To promote institutional funding in the sector FDI norms were relaxed in 2005 ( Red Tape to
Red Carpet)
During 2005-10, industry recorded growth of 30% CAGR and is concentrated in the top 7
metros.
7 cities account for approximately 70-75% of Grade A office space in the country, with a
leased space of around 279 MM sq.ft. ( as against 373 mm sq.ft in Manhattan , London is
210 mm sq.ft.)
Real estate market is expected to grow at a CAGR of 20%, with an estimated market size of
US$ 180 bn by 2020
5. BANK CREDITS:
-CC/OD/ PROJECT LOAN
- FACTORING
- LC/BG(Non fund Based)
- LRD
- LAP
EXTERNAL COMMERCIAL BORROWING
(ECB)
PRIVATE EQUITY- DOMESTIC FUNDS
FOREIGN DIRECT INVESTMENTS-
CCD/CCP/EQUITY
FCCB/ADR/GDR/QIP(For Listed Co.’s)
Listing in International markets such as AIM
FINANCING OPTIONS
6. Purpose: To meet working capital
requirements.
Amount of facility: Based upon the Bank's
assessment of the working capital requirement
(WIP & book debts)
Security:
Charge on current assets
Collateral(s) on case to case basis.
Interest Rates: 12% -16%
BANK CREDIT – CC/OD/ PROJECT
LOAN
7. Factoring is a service that covers the financing & collection of account
receivables of series of trade transactions between a seller & a buyer in the
domestic market as well as international market.
Advantages:
It is among the quickest way to get advance cash.
Cost effective with the cut in invoice processing and collection activities.
Getting cash with factoring helps in eliminating the risks of bad debts.
It helps the company in concentrating over more projects.
It gives an opportunity to offer credit to customers.
It helps in building credit history and no long-term obligation.
BANK CREDIT – FACTORING
8. Letter of credit(LC) is a written undertaking by a bank( issuing bank) given to
the seller (beneficiary) at the request and in accordance with the instructions
of buyer (applicant) to effect payment of a stated amount within a prescribed
time limit and against stipulated documents provided all the terms and
conditions of the credit are complied with.
Bank guarantee is a type of guarantee in which a bank promises to repay the
liabilities of a debtor in the event that the debtor is unable to.
The contract of guarantee has three parties Principal Debtor, Principal
Creditor, Guarantor i.e. Bank
BANK CREDIT – LC/BG
9. Lease Rental Discounting (LRD) is a type of Term Loan offered against rental
receipts derived from lease contracts with corporate tenants.
Quantum:
Based on the discounted value of the rentals
50% to 75% of underlying property value.
Maximum Tenure: 9-15 years ( Linked with lease period, lock in period,
quality of tenant etc.)
Repayment Mode: Generally Rentals are payable by the tenant directly to an
escrow account with lending bank.
Security: The underlying leased property will be taken as prime security.
BANK CREDIT - LEASE RENTAL
DISCOUNTING
10. Loan against property is similar to other loans
like home loan, Equipment Loan etc.
Quantum of Loan: Depends on type of
property &
income of the borrower
Tenure: Flexible for 1 – 15 years
Interest Rates: 11%-14%
Security: Charge on Property and
LTVs are
generally at 65- 70% of PMV
ANK CREDIT -LOAN AGAINST PROPERTY
11. ECB allow corporate to access the foreign currency loans through
commercial bank in the form of loans,suppliers’ credit, fixed rate
bonds, non-convertible, optionally convertible or partially
convertible preference shares availed of from non-resident lenders.
Since January 2009, ECB route has been opened for the development of
Hotel projects, integrated townships & Industrial Parks.
For Industrial Parks ECB is allowed under automatic route while for SEZ
& Integrated township development ECBs is allowed under approval
route.
Real Estate companies like Jai Prakash Associates, Unitech, HDIL and
AMR Construction, etc. have used ECB to raise funds.
ECB - GUIDELINES
EXTERNAL COMMERCIAL BORROWINGS ( ECB)
Maximum Loan Amount:
Corporate engaged in hotel, hospital & software sectors: Up to USD 200
Million
Real sector ( Industrial & Infra): up to USD 750 Million
12. Tenure:
Up to USD 20 Million: Min Avg maturity of 3 years
Above USD 20 Million: Min Avg maturity of 5 years
ECB - GUIDELINES
Cost:
Average maturity period All-in-cost Ceilings over 6
month LIBOR
Three years and up to five
years
350 basis points
More than five years 500 basis points
Prepayment:
Prepayment of ECB up to USD 500 million may be allowed by
AD Banks without prior approval of RBI subject to compliance
with minimum average maturity period as applicable to the
loan.
13. FDI are investments made in
home country by foreign investors.
Total FDI in India’s housing and real
estate sector till date is about 19 bn USD
Besides the Foreign Funds there are
certain Indian Fund houses which have
raised foreign capital and are sponsoring
FDI funds- prominent names are Tata,
Piramals, Sun Group, ILFS.
FOREIGN DIRECT INVESTMENTS
Major Players
Sun Apollo
Wells Fargo
Morgan Stanley Real
Estate
Goldman Sachs Real
Estate
GIC, Singapore
Blackstone
14. Particulars NRI Other non-residents
Direct investment
in immovable
property
Possible –
Purchase of agricultural
land / plantation / farm
house excluded
Not possible –
However foreign companies are
allowed to acquire immoveable
property with approvals, for
branch office & places of
business.
Investment in
SPVs - Investee
entity
Partnership firms / sole
proprietorship (on non-
repatriation basis)
• Companies
• Only companies
Nature of real
estate activity
• SPV cannot engage in
agriculture / plantation /
real estate business
(dealing in land /
immovable property)
• Housing, townships,
infrastructure
• Hotels and tourism
• Industrial parks
• SEZs
FDI IN REAL ESTATE
15. Particulars Regulations
Minimum area of
development
• Serviced housing plots –10 hectares(1 lakh Sq mtr)
• Construction – development projects - 50,000 sq
meters
• Combination projects – either of above two conditions
to be met
Investment
limits
• WOS – min capitalization of US$ 10 million
• JV with Indian partners – US$ 5 million
• Investment within six months of business
commencement
Lock-in
restrictions
• Original investment locked-in for 3 years from the
date is in brought-in( However, the FIPB has clarified
that the definition of original investment is the entire
investment)
Project
development
• 50% of the project to be developed in 5 years from the
date of obtaining statutory approvals. (under-
developed plots cannot be sold)
FDI -REGULATIONS
16. Particulars Route
Hotels,
tourism and
hospitals
• 100 percent permitted under automatic
route
• Hotels include restaurants, beach resorts
and other tourist complexes providing
accommodation and/or catering and food
facilities to tourists
Industrial
parks
• 100 percent permitted as per the Industrial
Parks Scheme, 2002
SEZs • 100 percent permitted as per the SEZ policy
FDI IN OTHER REAL ESTATE ACTIVITIES
17. Subscription of shares by Non-Resident
◦ Issue price shall not be less than:
◦ In case of listed companies- Price worked out as per SEBI guidelines.
◦ In other cases- Fair valuation of shares worked out and certified by a
Chartered Accountant.
Transfer of shares
◦ By Non-Resident to Resident: Sale price shall not be more than
◦ Listed company
Transaction through a stock exchange - prevailing market price
◦ Unlisted company
◦ A price which is lower of:
Independent valuation of share by statutory auditors of the company
Independent valuation of share by a Chartered Accountant or Merchant
Banker ( the mechanism prescribed for the valuation is DCF)
◦ By Resident to Non-Resident – Pricing shall be same as in case of
subscription of shares by non-resident
◦ Non-Resident to Non-Resident : No price restrictions
PRICING GUIDELINES
18. Issue Views/ challenges
Minimum capitalisation
norms
Would acquisition of existing shares from promoters
be considered towards the minimum capitalization
norms
Lock-in requirements Meaning of ‘original investment’ for the purposes of lock-in
requirements:
Would the entire investment be locked-in for 3 years
Would investment up to the min. capitalization be locked
in
Would lock-in apply only for the 1st tranche of
investments
FIPB has clarified that the definition of ‘original
investment’ is the entire investment and each tranche
which is locked in from the date it is brought-in. However,
FIPB can grant a specific approval on case to case basis.
Time-limit of six months from
commencement of business
Does it imply that investments may only be made in
newly incorporated companies- Not necessary
Impact on enterprise-level investments- No
Do all non-FDI-compliant projects need to be hived off -
Yes
KEY ISSUES
19. Execution of
projects through
step down
subsidiaries
Approval required for
investment in holding
companies
Approval required to form step
down subsidiaries for project
execution
Project execution
through partnership
firms
Is this permitted? Not permitted
Does it require approval- Yes
Hive-off / de-merger
of projects
subsequent to
investment
Does it imply that minimum area
requirements are not complied with –
Need to comply
KEY ISSUES
20. Issue Key challenges
Investment in
companies
holding
agricultural land
• FDI policy prohibits investment in agricultural land /
plantations / farm houses – FDI may have to come in only
after conversion of agricultural land.(But ok if in
development zone of master plan)
Repayment of
Investment to
Non-resident Investors
• Preference shares / debentures to compulsorily convert – Yes
• Buyback of equity – Quantum / pricing restrictions apply
Choice of overseas
jurisdiction for routing
investments
• A number of treaties believed to be under review
• Will Mauritius, Cyprus treaties be renegotiated ????
Return on Investments •Preference shares – coupon rate benchmarked to SBI Base rate
•Debentures – Lack of clarity on maximum coupon rate
KEY CHALLENGES
21. Particulars Before amendment After amendment
Foreign investment
through preference
shares
Foreign investment
through debentures
• Preference shares that were
redeemable and / or optionally/
partially convertible came
under the FDI regime
Debentures that were not
convertible or partially / optionally
convertible did not come under
ECB regime
Any preference shares issued after 1st
May, 2007 to be part of equity only if they
are compulsorily convertible. In all other
cases, they will be considered as debt and
will have to comply with the ECB
guidelines.
Also, existing investments in such shares
may continue till their current maturity.
Only fully and mandatorily convertible
debentures, within a specified period of
time, would be reckoned as FDI; all other
debentures would be regarded as ECB.
FOREIGN INVESTMENTS THROUGH PREF SHARES & DEBENTURES
22. Qualified Institutional Placement (QIP) route offers a cost-
efficient way of raising funds from the domestic institutional
investors, thus offering an attractive alternative when
overseas borrowings dry up. This mode of fund raising has lesser
procedural requirements. Real estate companies that have raised
money through the QIP route includes Unitech, Parsvnath
Developers, HDIL, DLF etc.
Foreign Currency Commercial Bond (FCCB) is a mix between a
debt and equity instrument issued in a currency different than
the issuer’s domestic currency. It acts like a bond by providing
regular coupon and principal payments but at the same time
gives bondholders the option to convert the bond into stock.
FCCB/ADR/GDR/QIP(For Listed Co.’s)
23. Real Estate Mutual Funds ( REMF)
Real Estate Mutual Funds – Introduction
In simple terms, Real Estate mutual funds are close ended mutual funds
with a lock-in period of 3 years. These mutual funds will invest in real estate
properties and being the owners of these properties, they will let out these
properties on rent. The rent so earned will be distributed to investors as
dividend. When the mutual fund attains maturity, the company can sell its
holdings and return your investments.
SEBI has kept the scope of the REMF wide open, as the guidelines allow
REMF to invest in the following sectors:
• Directly in real estate properties within India
• Mortgage (housing lease) backed securities
• Equity shares of companies which deal in properties
• Other securities like debt instruments