What are the Latest trends of Project Finance?

Project finance relies primarily on the cash flows generated by the project serve as the source of loan repayment with the project's assets serves as a pledge for a non-recourse loan. It is the long-term infrastructure and the main characteristic is its non-recourse or limited recourse structure.

Financing involves the debt, contingent equity, and a variety of limited guarantees through a newly organized company for the purpose of building a capital intensive facility. Project finance is not appropriate for small projects. While it is more expensive and it enables sponsors to finance projects off-balance sheet that makes the form of finance attractive for joint ventures, PPPs, infrastructure projects or other projects where a sponsor wishes to buckler its other assets from the risk of a project failure.

Latest trends of project finance

The significant development has seen in the last financial year in the sectors such as city gas distribution projects, aviation, and renewable energy, India has also witnessed a consolidation of sorts and an increased focus in resolving assets. The RBI, by its circular dated 12 February 2018 has completely refurbished the regulatory framework for the resolution of stressed assets. It supplants all existing restructuring frameworks including resolution under the joint lenders’ forum and strategic debt restructuring and provides for a unified framework for restructuring of stressed assets.

India has also cleared faster adoption and manufacturing of electric vehicles, to increase the push for electric vehicles and energy storage systems in India. there has also been a focus on making infrastructure projects more bankable with the modification being made in standard form concession agreements to make infrastructure projects more appealing to developers. The roads and transportation sector has also seen the introduction of the toll-operate-transfer model.

A Snapshot of Private Equity Funding

Private equity funding is a form of financing that appeals to high net worth individuals. In this, investors provide direct funding to companies for a fixed time period for a high rate of return. The investors often hold an important position in the business and provide tactical expertise as well as support. The money that they invest can be used for varied reasons, ranging from funding a new idea or expanding the working capital to strengthening the balance sheet or making an acquisition. Private equity funding is not a short-term investment like a hedge fund but a long-term funding option with investors providing substantial capital for an extended period. After the stipulated time, investors exit the company for profit. The exit plan includes different options, including initial public offering in a stock market or sells to another private equity funding investor.

Types of Private Equity Funding

Though there are different types of private equity funding, it’s primarily categorized into Venture Capital (VC) and Leverage Buyout (LBO). Venture capital refers to private equity funding in emerging businesses that are still in initial stages of formation but have high growth potential and can generate extraordinary returns. In comparison to VC, LBO provides funds to mature businesses with a focus on enhancing the rate of return. Private equity funding through LBO channel is significantly larger vis-à-vis VC. Besides these two popular options, other types of private equity funding are Growth Capital, Fund of Funds (FoF), Real Estate and Turnaround/Distress Fund Capital.

Strategic Solutions by Resurgent India

Private equity funding has gained momentum in the past decade and is only expected to continue in the future. This vital funding option has contributed to the growth of many SMEs and entrepreneurs with strategic capabilities. For maximum benefit, one needs to have an in-depth knowledge of the entire private equity funding process. Resurgent India is a name one can trust as it has the experience and knowledge to execute private equity funding process quickly and efficiently.

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Recoup Losses by Seeking Professional Insolvency service

The complex and unpleasant insolvency situation always demanded a stringent set of laws to keep it in check, and thus, Insolvency and Bankruptcy Code (IBC) was promulgated around three years ago. IBC aimed at creating a single law for insolvency and bankruptcy. Since its enactment, several individuals have sought bankruptcy and insolvency service from professionals to overcome the unpleasant scenario. The law is intricate and evolving, which actually gets confusing at times for a layman, because of which it is imperative for individuals to seek insolvency service from professionals who have in-depth knowledge and expertise in their respective fields.

Evolving IBC

The enactment of IBC marks the incipient battle against bankruptcy and insolvency that has adversely affected several individuals across the country. With the help of the law, insolvency service providers have been able to recover losses from defaulters or delinquent borrowers. The law has been able to instil fear among defaulters who now risk losing their company in case they are not able to repay the outstanding debt within the stipulated timeframe. The new law has streamlined the overall process, defining different insolvency resolution processes for individuals, companies and partnership firms.
We need to understand that the law has replaced a number of archaic laws and is still evolving. There is still a long way to completely wipe out such cases, but several insolvency service providers are coming to the rescue of creditors who were not very hopeful until the recent past.

Seek Professional Insolvency service

Insolvency service providers prove to be the light at the end of the tunnel for many creditors. Resurgent India is adept at imparting support/advisory insolvency service for Corporate Insolvency Resolution Process (CIRP). By executing the insolvency resolution service efficiently, the professionals here have been able to recoup as much money as possible from defaulters.

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Benefits of Debt Syndication

The aim of every business is to prosper and grow for which it has to continuously meet its working capital and growth finance needs. Debt syndication proves to be a great funding tool for such companies and is even considered better than other debt options such as bank loans and bonds. In debt syndication, the borrower gets funds from two or more lenders, who generally entrust the lead lender with the responsibilities of origination and administration of the loan. This debt mechanism has been around for a long time, but its popularity has simply exploded in the past few years.

Win-Win Situation

Debt syndication not only benefits lenders but also borrowers who need capital to fund their continued growth. Lenders prefer debt syndication as it limits their risks and even enables them to give more loans to different portfolios. Besides, the administration of loan is done proficiently by the agent that manages the whole process on behalf of all the syndicate members, saving other members’ time and effort. 

Borrowers, on the other hand, don’t have to negotiate with individual financial institutes, which can be quite taxing. The time and effort that they save can be channelized in other productive tasks. Along with the consolidation of efforts, debt syndication helps borrowers in making new contacts with financial institutes that are part of the syndicate. Debt syndication is also cost saving as funds are cheaper in the syndicated loan market in comparison to a series of bilateral loans. In addition, it provides them the flexibility in shaping their syndicated loans as well as greater visibility in the market.

Thus, debt syndication has not only benefited several borrowing companies by contributing to their growth but also proved beneficial for lending financial institutes. 

Choose Resurgent India

Resurgent India provides customized financing solutions with a thorough understanding of the debt syndication process. The debt syndication managers here can arrange debts at competitive rates by assembling a group of financial institutes to form a syndicate to effortlessly meet the requirements of the borrowers.