Synergics

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  • Synergics

    1. 1. <ul><li>Synergics </li></ul>
    2. 2. SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress SYNERGICS Partners in Progress Promoters: Hitendra Shanker Naveen Chand Presented By: Sakshi Varma
    3. 3. OVERVIEW <ul><li>Entrepreneur’s profile </li></ul><ul><li>Business Proposition </li></ul><ul><li>Financial Analysis </li></ul><ul><li>Management and Human Resources </li></ul>
    4. 4. ENTREPRENEUR’S PROFILE Name of the Promoters V Hitendra Shanker K Naveen Chand Educational Qualification MBA from IRMA; Graduation in Agriculture MBA from IRMA; Graduation in Commerce Work Experience Agri input sector for 2 years; Banking and Consultancy for 4 years Dairy sector for 1 year; microfinance for 5 years Experience in Microfinance 4 years 5 years Core Skills Agriculture Marketing; Setting up Rural Institutions; Microfinance and Livelihood Consulting Financial Modeling; Venture Capital Investing; Microfinance and Livelihood Consulting Current Assignment (both directors of Parishkaar Advisory Services Private Limited) Strategic consultants to Dangote Foundation in Nigeria, to setup the supposedly largest MFI in the African continent. Alhaji Aliko Dangote is ranked 334 in the ‘World’s Billionaires 2008’ listed by Forbes.
    5. 5. BUSINESS PROPOSITION
    6. 6. THE PROBLEM <ul><ul><li>Microfinance is narrowly defined as micro credit </li></ul></ul><ul><ul><li>No funds for business growth </li></ul></ul><ul><ul><li>No access to banks </li></ul></ul><ul><ul><li>No technical assistance </li></ul></ul><ul><ul><li>Lack of options in raising finances </li></ul></ul>THE SOLUTION
    7. 7. Provide Market Linkages Business Development Services Long Term Debt- Equity Structures Institutional Guarantee Innovative Instruments SYNERGICS Partners in Progress
    8. 8. ABOUT US <ul><li>Legal Status: </li></ul><ul><ul><li>Private Limited Company </li></ul></ul><ul><ul><li>Venture Capital Fund (Livelihoods Scheme) registered with SEBI </li></ul></ul><ul><li>Ownership: </li></ul><ul><ul><li>All shares of the company held by the promoters </li></ul></ul><ul><ul><li>Units under the Livelihoods Scheme will be bought by subscribers/investors </li></ul></ul>
    9. 9. ABOUT US <ul><li>Mission: </li></ul><ul><ul><li>Synergics would exist to incubate and jointly-operate microenterprises at the bottom of the pyramid in a sustainable manner </li></ul></ul><ul><ul><li>Vision: </li></ul></ul><ul><ul><li>By 2013, Synergics shall promote 500 microenterprises in about 20 livelihood sectors in rural and semi-urban areas of Andhra Pradesh </li></ul></ul>
    10. 10. METHODOLOGY LEVEL 1 LEVEL 2 Sector 1 Sector 3 Sector 2
    11. 11. PRODUCTS AND SERVICES <ul><ul><li>Financial Products </li></ul></ul><ul><ul><li>Equity </li></ul></ul><ul><ul><li>Debt </li></ul></ul><ul><ul><li>Non-Financial Services </li></ul></ul><ul><ul><li>Business development services </li></ul></ul><ul><ul><li>Market linkages </li></ul></ul>
    12. 12. PRODUCTS AND SERVICES <ul><li>Maximum Sectoral Exposure: Rs. 10 mn </li></ul><ul><li>Maximum equity in microenterprise: Rs. 1 mn </li></ul><ul><li>Minimum equity in microenterprise: NA </li></ul><ul><li>Maximum debt to microenterprise: 50% of equity </li></ul><ul><li>Minimum debt to microenterprise: NA </li></ul><ul><li>Cost of Debt: 15% pa on diminishing basis </li></ul><ul><li>BDS and market linkages: Not priced </li></ul>
    13. 13. AREA OF OPERATION Probable List of Sectors Dairy Poultry Handlooms Aquaculture Food Processing <ul><li>Characteristics of the Sectors </li></ul><ul><li>Low entry barriers </li></ul><ul><li>Predominant contributor to local economy </li></ul><ul><li>Rs. 20 mn of investments </li></ul><ul><li>Dairy </li></ul><ul><li>Poultry </li></ul><ul><li>Handlooms </li></ul><ul><li>Aquaculture </li></ul><ul><li>Food processing </li></ul><ul><li>Others </li></ul>
    14. 14. TARGET CLIENTELE <ul><ul><li>Sectors are identified through primary research </li></ul></ul><ul><ul><li>Micro entrepreneurs from these sectors in rural and semi urban areas are identified </li></ul></ul><ul><ul><li>Have skills and attitudes but lack initial risk capital </li></ul></ul><ul><ul><li>Partnership relation </li></ul></ul><ul><ul><li>Roles of each partner </li></ul></ul>
    15. 15. EXIT STRATEGY <ul><li>Option 1: Sell the total shares owned by the Scheme to social investor or the entrepreneur at the end of 3 rd year </li></ul><ul><li>Option 2: In the event an exit is not realised by the 3 rd year, partial sale would be done from 3 rd year onwards and by the end of 5 th year, total shares will be bought over by the entrepreneur </li></ul><ul><li>Option 3: As a last resort exit, Synergics shall launch a second scheme called Livelihoods Scheme 2, and transfer the units from Livelihoods Scheme to the Livelihoods Scheme 2 at the end of 5 years </li></ul>
    16. 16. SWOT ANALYSIS <ul><li>Strengths </li></ul><ul><li>Professional and experienced promoters </li></ul><ul><li>Innovative product </li></ul><ul><li>Opportunities </li></ul><ul><li>First mover advantage </li></ul><ul><li>Higher returns on equity products </li></ul><ul><li>Livelihood industry </li></ul><ul><li>Threats </li></ul><ul><li>Changes in sectoral policies </li></ul><ul><li>Competition from sectoral players and local MFIs </li></ul><ul><li>Weaknesses </li></ul><ul><li>No proven precedence </li></ul><ul><li>Difficult to convince investors and funders </li></ul>
    17. 17. COMPETITOR ANALYSIS <ul><li>MFI Level Competition </li></ul><ul><li>New products similar to equity products </li></ul><ul><li>MFIs do not ask for stake </li></ul><ul><li>Market Level Competition </li></ul><ul><li>Sector level competition with large existing players </li></ul>First mover advantage Price differentiation WIPING THE COMPETITION
    18. 18. SOCIAL IMPACT <ul><li>At the end of 5 years, Synergics aims to: </li></ul><ul><li>Promote 100 microenterprises in 5 different sectors </li></ul><ul><li>Generate employment for about 1000 individuals </li></ul><ul><li>Graduate microenterprises into the formal systems thereby providing access to credit of about Rs. 100 mn from commercial banks and other financial institutions </li></ul><ul><li>Promote profitable member-owned and member-controlled Companies </li></ul>
    19. 19. CASE STUDY OF AN ENTREPRENEUR ROI Before Intervention: 53 % ROI After Intervention: 91 %
    20. 20. FINANCIAL ANALYSIS
    21. 21. SOURCING FUNDS <ul><ul><li>As per the regulatory guidelines, every scheme in a VCF should have an initial fund amount of Rs. 50 mn. </li></ul></ul><ul><li>The 50 mn under the Livelihoods Scheme floated by Synergics would be sourced from: </li></ul><ul><ul><li>Synergics, as a company, shall subscribe to Rs. 10 mn worth of units </li></ul></ul><ul><ul><li>The remaining Rs. 40 mn shall be sourced by private placement of the scheme to potential subscribers across the world. </li></ul></ul>
    22. 22. DEPLOYMENT OF FUNDS An Illustration: Deployment of Funds in the First Year S.No Description Estimates A Number of sectors targeted in 1 st year 5 B Initial fund value of Livelihoods Scheme Rs. 50 mn C Average investments in each sector (B÷A) Rs. 10 mn D Average equity investment per microenterprise Rs. 0.35 mn E Average debt facilities given to each microenterprise Rs. 0.15 mn F Total average financing facilities per microenterprise (D+E) Rs. 0.50 mn G Total number of microenterprises that can be funded under each sector (C÷F) 20 H Total number of microenterprises under the Livelihoods Scheme (A * G) 100
    23. 23. ASSUMPTIONS
    24. 24. EQUITY AND DEBT INVESTMENTS
    25. 25. PROFIT AND LOSS STATEMENT
    26. 26. MANAGEMENT AND HUMAN RESOURCES
    27. 27. MANAGEMENT AND HUMAN RESOURCES
    28. 28. THANK YOU <ul><li>Hitendra V Shanker </li></ul><ul><li>[email_address] </li></ul><ul><li>K Naveen Chand </li></ul><ul><li>[email_address] </li></ul><ul><li>www.synergicsindia.com </li></ul>

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