How to do Brand Valuation?

The business valuation process is a challenging task. While the valuation of a brand may seem simple and appealing, they offer proper financial techniques, the truth is the bigger a brand is, the more complex and challenging the task of brand valuation is. A lot of factors should be taken into account and the valuation of trademarks, patents, goodwill, etc. also play a major role in the process.

Brand Valuation refers to the process that is used to calculate the value of a brand or the amount of money a third party is willing to pay for it or the financial value of the brand.

COST-BASED APPROACH OF BRAND VALUATION

The techniques under this method are concerned with the costs that are used in creating or replacing the brand. It is further subdivided into the following methods:

• Historical Cost Method - The approach includes the historical cost of making the brand as the actual brand value. It is regularly used on the preliminary levels of brand creation when specific market applications and advantages cannot yet be identified. However, the shortfalls of this approach are that there exist difficulties as to what could classify as marketing costs and the next amortization of marketing cost as a percent of sales over the brand's expected life.
• Replacement Cost Method - This method states that the brand valuation should be done by taking into account all the expenditures and investments that are required to replace the brand with a new one that has equivalent value to the company. The drawback for this method is that though it makes the calculation convenient and easy, however, it looks over the success of an established brand.

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Why TEV Study Is Important For A New Business Venture/Expansion Project?

 Techno-Economic Viability (TEV) Study provides an appraisal of technological parameters of projects and their impact on the financial viability of projects. A TEV study is a risk mitigation exercise undertaken by banks and financial institutions prior to a decision taken by a bank or financial institutions on its lending decisions for projects.

No project can be absolutely riskless and hence the analysis of the degree of technical risk and associated financial viability, through a Techno-Economic Viability Study (TEVS) is to assist lenders to take a view on the acceptability of the degree of risk involved in a project.
 
A TEV study takes into account an analysis of technological risk, market risk, regulatory risk, financial risk. A critical evaluation of these parameters is essential for a meaningful TEV study. The TEV study is a continuous process, carried out from the development phase till the execution of the project.

Resurgent India, with the right skill sets to deliver, assists banks and financial institutions perform TEV studies.

Aim of TEV study 

• Reveal the strengths and weaknesses of an existing business.
• Analyze the threats and opportunities in the current environment.
• Streamline all the resources required to make it a success.
• Understand the prospects of the project.
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This study is required by banks, asset reconstruction companies (ARCs), engineering firms, and other institutions for the following purposes:

• Project loans appraisal
• Project financing (that includes term loans)
• Revitalizing distress assets
• Sharpen leadership skills to manage your team
• Cut expenses without compromising on quality
• Automate your business

The key objective of this study is to get a detailed insight into the project descriptions, accounting statements, resource allocations, legal requirements, financial data, tax obligations, etc.

This study is mandatory before technical development and project execution to identify if the project is profitable or not.

Benefits 

• Acquire a crystal-clear idea of whether the project is likely to be successful even before you decide on the human resources, time, and effort.
• Improve the project team’s focus and efficiency.
• Allow you to detect and capitalize on new opportunities.
• Help you to understand the how’s and why’s of the project before even starting it.
• Give you time to streamline your business alternatives.
• Detect problems beforehand and aid in troubleshooting it.
• Enables risk mitigation.
• Get valuable insights to the team members and stakeholders about all the possibilities of the project.

 

The TEV Study encompasses of all the elements required to conclude at an informed judgment to accept a project for lending or investment purpose. Rakesh Narula & Co. provides you with a TEV Report that projects a realistic view of both the positive and negative aspects of a project.

 

Critical Areas of TEV Study

Given below is all the knowledge you need while getting a TEV study report prepared.

• Evaluating the project's sponsors- Getting funds for a business venture also depends on the profile of the sponsors. Hence a TEV report must include the personal and financial profile of the promoters. Their record is also an important factor in determining if you will get the requisite funding for your project.
• Choosing a skilled team for handling the project- A project's success also depends on its people. It is recommended that the project members have expertise from different fields such as HR, Finance, Project implementation, etc.
• Technical evaluation- It is important to assess the project's technical components to reap good results in the future. One must conduct in-depth research on the latest technological equipment and other important resources in advance.
• Financial feasibility- One of the most vital aspects of a TEV study is that the project must be financially viable. It means that the project when executed, must bring good returns, or generate appropriate cash flows to clear the debt. While determining its financial workability, many factors are kept in mind, such as the requirement of the term loan, capital requirement, ratio analysis, etc.
• Market Evaluation- The project idea should be such that it meets the demands of the future market. The demand and supply for future needs must be enough to meet the marketing trends. Hence one must keep in mind this factor while preparing a feasibility study.
•  Simulation analysis/Sensitivity analysis– In this method, you carry out infinite calculations to obtain possible outcomes and probabilities for any choice of action. This financial model is commonly used to predict the outcome of a decision using certain variables In this case, you analyse the impact of variation in key assumptions like selling and raw material prices to know the financial viability of the project.
• SWOT Analysis- SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is a strategic planning tool that includes identifying internal and external factors or highlighting the objectives of the project to find the favorable and unfavorable elements to achieve the desired goal.
• Risk Analysis- Last but definitely not least, risk analysis is mandatory. It is conducted by identifying operational risk, market risk, financial risk, and risk in resource mobilization, project execution, regulatory and political risk. The simple reason to include this study is to mitigate the identified risk and come up with preventive measures to overcome issues in the near future.

Conclusion.

TEV is an integral component of project management, such as starting a new business venture or an expansion project. A reliable TEV study will assist you in reducing the risks associated with the project and help you get an unbiased view of the pros and cons of your project. Eliminating the flaws of your project before executing to bring huge returns, and you can obtain more funding to turn your dreams into reality.

Hence always choose experts from the investment banking field while preparing your TEV study. The experts from Resurgent India will guide you step by step for the feasibility report and make you achieve your business goals. For more information visit our website.

Original Source: Why TEV Study Is Important For A New Business Venture/Expansion Project?

One-Time Loan Restructuring – Definition, Advantages, and Disadvantages

 

What is Loan Restructuring?

Loan Restructuring fundamentally means the modification of the loan terms and conditions. When a borrower faces financial distress, he can opt to revisit, negotiate and revise the loan terms and reduce the chances of any payment default. The loan restructuring process can be initiated by extending the loan tenure with or without changes in the rate of interest. 

What is a one-time loan restructuring scheme?

As per the Reserve Bank of India (RBI) directives, banks and financial institutions can implement a recuperative plan for their financially affected customers trapped in the economic fallout that resulted from the COVID-19 pandemic. The resolution plan can also permit additional credit facilities or extend the remainder loan tenor by a moratorium not exceeding 2 years. The one-time loan restructuring scheme can be availed by individuals and entities who are likely to default their EMIs due to loss of income compelled by the pandemic. They must also not have any overdue EMI for more than 30 days as of 1st March 2020. For MSMEs, this period is 89 days, who have availed a loan of less than 25 crores. Lending banks can recognize these loan accounts as standard and need not book them as Non-performing assets (NPAs). 

Original Source - One Time Loan Restructuring

Investment Banking Firm – Overview, Functions and Benefits

 

What is investment banking?

Investment banking is a separate division of the financial sector that arranges debt and deals in securities for all types of corporate organizations. Additionally, it is also responsible for providing other services such as financial advisory services and mergers and acquisitions etc. In simple words, we can sum up that investment banking firm work as a mediator between the corporates looking forward to expanding their business and potential investors.

In modern times the financial needs of business owners have increased tremendously. On top of that, handling such large finances requires the assistance of experts such as investment bankers. Thus investment banks come to the rescue of such people with huge capital needs and help them run their businesses smoothly.

 

Overview of investment banking firm.

While a commercial bank is essential in handling the day to day financial needs of the people/ entrepreneurs and provides the credit requirements, an investment bank works as the backbone of our economy for arranging funds through debt and equity. Capital assessment and price setting are two main contributions of an investment bank towards an increasing economy of any country.

Other than this, these firms keep the present and future needs in mind while performing their role.

Original Source - Investment Banking Firm

Investment Banking Firm: A Complete Overview

 What Investment Banking firm do? 

Investment banking firm is a special department of banking that provide services like raise capital and financial consultancy to individuals and organizations.

Investment banking firms help in raising equity and debt capital. They provide advice to companies, individuals, and the government on financial and investment decisions. They act as a middleman between the security issuer and the investor and help new companies to start their business. They provide great and expert financial advice to their client and help them to get succeeded in the market.

Description Of Investment Banking firm 

Investment banking is one of the most complex departments of banking operations in finance. Investment banking firm provides various financial services like trading securities, debt syndication, private equity, financial advisory services, transaction advisory services, valuation services, and insolvency services to companies, organizations, individuals, and government.

An investment banking firm manages the financial aspects of large projects and helps governments, corporations, and other groups plan. They mainly help their clients in raising money through dues and equitableness offerings. They provide various financial services which include raising capital through Initial Public Offerings, selling shares to investors through private placements, credit facilities with the bank, or issuing and selling bonds on behalf of the client.

Investment banking firm can do purchasing and selling of trading securities on behalf of their clients to bring more profit to them.

Investment banking firm provides debt syndication and equity services to their clients. Raising debt syndication is done by issuing bonds to generate funds.

Original Source - Investment Banking Firm

Transaction Advisory Services: A Complete Overview

 Transaction advisory services are the third party services obtained from professional firms or investment banking firms. They help you handle all the tasks associated with your transactions from the start to the end and thus act as your business's support system , and meet requirements for expansion. Such as a merger or acquisition of an organization. When it comes to making choices on transactions, it is recommended to make decisions based on critical thinking and proper analysis. Such detailed analysis and problem-solving skills can turn any deal into success.

A business is built through sweat and hard work. Every decision is a small step towards accomplishing more significant goals and requires diligent planning. A business has to overcome a new set of challenges every day and strive towards success by defeating these challenges. In such a situation where a business is prone to a new set of hurdles and risks, it is recommended to seek help in minimizing the risks by availing the finance experts' services.

 

Why do you need the guidance of transaction advisory services?

A successful business involves a lot of sweat and hard work. Every decision is a small step towards accomplishing more significant goals. A business has to overcome a new set of challenges every day and strive towards success by overcoming them. In such a situation where a business is prone to a new set of challenges and risks, it is recommended to reduce them by availing professionals' services. There is nothing better than handing over the responsibility of business transactions to the transaction advisory services. Especially in business transactions, it is suggested to avoid uncertainties and avail transaction advisory services.

Why do you require the assistance of transaction advisory service providers?

The transaction advisory firms help the business in fetching more deals and provide assistance to reduce risks. The team of professionals possesses relevant skills and knowledge of their field. They offer several services, including strategic and financial advice, while finalizing a deal. They do their homework well in advance and proper market analysis to reduce the risks. Also, they have hands-on experience in handling several industries, including IT and food.

                     

Here is an overview of the service offered by these professionals

1. Analysis of the working capital of business - A transactional advisor offers essential and a variety of services. They also help in devising new plans and structures for reviving businesses so that they prosper. An analysis is done in-depth, and requirements of working capital are identified. All this gives tremendous support to business organizations.
2. Due diligence in every aspect of the business - With their vast experience in handling the various aspects of a business, they provide several services under one umbrella, including sales and acquisition of companies and corporate restructuring. Several factors ensure that this service offers smooth transactions. Here are a few aspects where due diligence is provided.

• Legal, due diligence - The legal aspect of a business is taken care of under this area. Documents of a contract are prepared and re-examined extensively, the legal matters are taken into consideration, and the license validity is checked from time to time.
• Financial due diligence - The present economic situation of the target company is analyzed. Thus, it is made sure that the clients understand the critical financial aspects. It is done by reviewing the financial statements, analyzing the revenue generated, and calculating the overall expenditure.

3. Transfer pricing services - The main aim of transfer pricing services is to properly allocate cost,revenue and profits in an efficient manner for multiple locations and multiple branch organisations including banks.Hence these policies are made to reduce taxes and generate more earnings. It is also based on the arm's length principle in the industry. Thus companies need to keep relevant documentation in this regard along with the supporting proof/evidence. In this regard, many operations are performed, such as preparing such documentation by the professionals in the transaction advisory firms, reviewing the supporting documents regularly, and executing transfer pricing strategies in an organization.

 

The transaction advisory firms assist you with innumerable transaction advisory services under one roof. With these banking experts' help, your business runs smoothly, and one can utilize its potential to the fullest. From planning to execution, all the phases are closely scrutinized by these firms. Their guidance and services are beneficial for your business. The consultation offered by them helps organizations flourish and reach great heights.

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Investment Banking – Functions and Current Scenario in India

Investment banking is a specific banking field connected by some firms, governments, and entities to the production of capital. It is one of the most difficult financial processes in the world. Investment banks perform several positions and undertakings involving own purchase or selling of securities, mergers, and acquisitions by promoting M&A organisations; leveraged capital instruments lending for the production of and distribution of products and restructuring, which involves enhanced organisational structures that improve the productivity of an entity.

The investment banks act as a bridge between major companies and the investor by helping the companies to obtain debt finance through the attraction of corporate bond lenders. Investment banks play a significant function in generating fresh resources by developing loans for raw materials to the producers and fulfilling certain requirements in a nation to contribute thereby to the economic development and investment securities.

Functions of Investment Banking:

Mergers and Acquisitions: Company accounting, strategy, and corporate strategies in regards to buying or associating businesses in the field of mergers and acquisitions. For exchange, an investment firm pays M&A commissions. Investment banks shall take the following moves for M&A: seller or buyer participation are two kinds of investment bank M&A roles. The valuation of a company plays an essential role in M&A. The valuation of a business is determined by the fund. Two companies are designing the Investment Bank's plan for M&A. The investment bank always provides a client with financial arrangements, as M&A would require tons of money. It allows an organisation to raise M&A funds. The bank's key function is to supply the investor with new shares. This investment management role allows a small business to create a partnership when an acceptable target has been identified. This leads to the progress of the acquisition because this is achieved by an investment bank.

Underwriting New Stock Issues: The IPO is an initial public offer, in which a corporation employs an investment firm to file an IPO. The investment manager supports an entity in placing everything in a loan and selling the IPO. IPO is one of the core features of investment banking. In exchange, the bank pays a company's fee.

Sales: Another critical or core aspect is the revenue of an investment fund. They concentrate on naming high-profile persons and organisations for exchange proposals on the grounds of "Caveat Emptor." The traditional supermarket broker, sales representative, or private customer service agent are shaped by retailers. Classic retail brokers are developing and offering individual investors portfolio and commodity recommendations. Investment banks shape alliances with main corporate owners managing large asset groups.

Risk Management: Risk management of the company itself is apparent because risk management requires a continuous cycle because capital means a restriction to deter trade loss. Investment banks control threats at various rates by explaining what hazards are present and how they can be managed.

Current Scenario of Investment Banking in India

The investment bank in India is growing owing to an improved degree of interest and a reduced operating cost model for investors. India is now the fourth-largest economy in the world. It has reached the second position, especially in purchasing power, at its amazing GDP level in all developed countries. It will also demonstrate macro-level financial stability. The key force behind all economic growth is claimed to be financed. A decade after the financial crash, the global banking industry has become firmer. The need for structural reform is prioritised by the banking sector in 2020: Regulatory compliance, technology, risk management, and skills.

With the help of Resurgent India’s Investment Banking in Gurgaon, the clients can get solutions regarding the high-quality strategic advice and creative financial solutions, including mergers and acquisitions, funding, and risk management to choose the right option to meet and surpass your goals.

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