Overview of Financial Services & Advisory Firms in India.

India is experiencing rapid expansion in terms of Economic Diversification. There is a rapid expansion in both existing financial services companies and new financial companies entering the market. Financial services include commercial banks, brokers, not-for-profit financial companies, cooperatives, pension funds, mutual funds, and more. Indian Government has implemented many reforms in order to liberalize, control, and develop the finance sector. The experts in the financial services sector provide the banking and bonds, insurance, and investment management industries with extensive integrated solutions.

Following are the advantages of Financial Services in India:

• Growing Demand: The increasing income drives financial services demand across revenue lines.
• Innovation: India benefits from a broad cross-usage of the financial services network.
• Policy Support: The Indian Government has approved new banking licenses in the insurance sectors, and is increasing FDI quotas. 
• Growing penetration: In rural areas, credit, insurance, and investment penetration are on the rise. In addition, HNWI membership has been increasing in the wealth management segments.

Advisory Firms includes several financial advisors that provide advisory services to clients across the globe. It entirely focuses on strategizing for the success and growth of a business. A financial advisor discusses different investment options: Shares, tax laws, commitments, and insurance. A business can always be benefited from expert advice so its goal is to help show strength and resolve the weakness and can make a difference in business success from its point of view. Advisory Firms provide opportunities to the financial service clients in the following areas: Quality, Operational Excellence, Growth strategy, Informational enforcement technology, Customer loyalty and feedback, Fusions and acquires Performance improvements, Private Equity, and Management change. They both work together by developing and endorsing or implementing transparent, concrete action plans in order to ensure significant and enduring improvements in performance.

An Introduction to Private Equity Firms

Private equity is a company's private ownership, unlike stock ownership. Private equity investors can buy all or part of a private or public company and usually keep their investment for about 5-10 years before selling. Typically, private equity firms look for a return of about $2.50 for every dollar invested.

Private Equity Firms are the firms that share representing an entity’s ownership or interest that is not listed or traded publicly. They raise money to provide their shareholder customers with profitable returns. The business of the enterprise requires large capital expenditure to change the minimum capital requirements for investors depending on the enterprise and the fund. Companies have the ability, ideas, and expertise to take on and strengthen the underperforming organization by enhancing the operational efficiencies that lead to higher profits and creating value by aiming to align the interests of organization management with the investors.

Functions of Private Equity Companies are:-

• Raise Capital: Capital raising companies play a role by acquiring capital obligations by limited partners and external financial institutions, such as pension and pensions funds, insurance companies, wealthy persons and funds.

• Sourcing, due diligence, and deal closing: Public equity companies will consider such things as the business sector, management, financial performance, the possible exit scenarios. Public equity companies will take into account the final terms of the deal are then negotiated and the deal is closed, funds are released and equity transactions are carried out.

• Equipment improvements: Companies offer a variety of strategic support and advice, financial management, operations, business improvement to make the final outcome profitable.

• Profit from portfolio companies: In the end, the objective of a firm is to gain profit, normally over 3-7 years following the initial investment, depending on the time of the strategic location. During exit value, costs are recognized, debt used to fund the transaction is paid down, revenue is increased over the holding period, working capital is optimized and the company is sold at a higher price.

3 Major Factors That Affects Corporate Finance of a Company

A division of finance that deals in the financing, investment decision, and capital structuring is termed as Corporate Finances. These finances comprise of the tools and analysis for the utilization and proper distribution of financial resources.

Corporate finances help gain the shareholder's maximum value for the money they had invested in the company, whose financial aspects are adequately handled by the management. It is the sole responsibility of the management to ensure that the shareholders receive the maximum return in the form of increased share prices and dividends. Nature of Corporate Finances differs from company to company and mainly depends on the area in which the company deals in.

Three factors that majorly affect the Corporate Finances of a Company are:

1. Investments and Capital Budget: It basically includes the planning of placing the long-term capital assets of the company to generate maximum returns with risk-adjusted. Investments and capital budgeting mainly comprise of opting an investment opportunity with the help of extensive financial analysis. A company with the help of investments and capital budgeting identifies capital expenditures, compares planned investments, decides the project to include in the budget, and estimates cash flows. 
2. Capital Financing: Capital financing helps make decisions on how to finance capital investment in a better way with the help of business’ equity, debt, or both. The stocks of the company can be sold or debts can be introduced in the markets with the help of investment banks to receive long-term funding for capital investments. Equity and debt must be balanced and closely managed since too much of debt can result in the increased risk of default repayment. Whereas, dependency on equity may result in dilution of earnings and value for original investors.
3. Dividends and Capital Return: This helps decide whether excess earnings in the business should be retained for future investments and operational requirements or whether it should be distributed to shareholders in the form of dividends or share buybacks. For business expansion, funds from retained earnings can be used since they are not distributed back to the shareholders. If a return rate on capital investment greater than Company’s capital cost can be earned, managers might pursue it, else, should be returned in the form of dividends or share buybacks.

Critical Aspects of Techno Economic Viability Study

Every business entity yearns to enlarge its operations and scale up. This is achieved when the present processes are optimized to its maximum monetizing capabilities and newer projects are taken up. However, what are the parameters that would be utilized to benchmark the feasibility for the project? How would an investor perhaps gain trust on investing for the same? True, the promoters' business acumen would be gauged, but what if the project is in a space of a perceived risk sector?

No project is devoid of risks. TEV Studies produces an analysis on the degree of risk in the technical and financial aspects of the project. This encompasses various other factors as well, such as:

• Product description, usage and applications. That would help us gauge the risk in terms of demand fluctuations and product sustainability.
• Prior experience, acumen and funding status of the key management personnel. This would be assisting us regarding the sustainability of the project and in turn, the risks associated with it.
• The prevailing market scenario surrounding the project in total. We would be taking into account both the national as well as international environments. This would enable us to gauge competition, external forces and limitations of the product.
• The technology that would be used for the production of the target product.
• Ease of doing business in the geographic area where the product would be catered to.

Apart from these, we would be deep diving into the technical and financial aspects, with all the relevant ratios, comparisons and perceptions. Prevailing statutory obligations, market forces and the technological ease would be assisting us regarding the feasibility of the project. These in totality would help us analyses the viability of the project.

We, at Resurgent India have successfully are impaneled with 20+ public/private sector banks as consultants, and have executed more than 250+ TEV study till date. Do write to us about your project at corporate@resurgentindia.com for the feasibility of your next strategic project.

Cheers!

Is This Going to be the Myth of “The Great Indian Loan Market” from the Perspective of Corporate Lending?

At the turn of this century, many multinational companies lost millions of dollars in Indian market because of the over-projection of this term “The great Indian middle class.” Is this history going to repeat itself in the present day loan market of India? The intensity of this question becomes even bigger when we see it from the perspective of the big investors who are seeking for corporate lending. 

Media Reports Are Shocking and Industry Pundits Are Surprised 

The result of the 2019 LS elections in India made this country a land full of corporate lending opportunities. The reason is quite simple, it is expected that the unorganized sector of the market will now start participating directly in the mainstream economy. In order to fill certain gaps, financial institutions of the country are promoting a culture of loans. In the books of corporate lending opportunities, these types of loans can act as a leveler and bring the markets into the zone of the perfect competition (Anand, 2019).  

However, the media reports are constantly raising doubts over the suitability of new loan criteria adopted by some of the disparate players in the market (Why Indian lenders are giving loans to risky customers with low credit scores, 2019).  If you are seeking to check the validity of any investment opportunity in the field of corporate lending then take the support of experts representing RESURGENT INDIA and secure your interests.  

Impact on Private Equity Funding From Demonetization to the GST Tax

From demonetization to the GST tax regime, our Indian economy has seen a lot in the previous 5 years! Consequently, the large institutional investors from around the glove have not started considering this new found economy as a wonderful pasture for the private equity. Any of the small investors in our country can join this bandwagon of these large investors, and mint money in this market that is brimming with opportunities.

United States in 1920 & India in 2020

India’s real estate sector almost collapsed after demonetization! Most firms dealing with private equity declared this economy as a cash-starving industry! Indeed it is! There is definitely no denial to the fact that black market deals were happening in the unorganized real estate sector in the country. Maybe, this was the very reason for serious private equity related firms not been keen on this particular sector. However, the budget came as a respite when the RBI said about bringing down the ROIs; so now the ball is in the court of the banks for them to translate this into some serious business. In 1920, USA economists had also supported such type of a move where the Government was told to bring forth massive infrastructure-based project(s) there. In India’s current development, institutional private equity players are displaying a keen interest again in this real estate sector. 

Let Resurgent Be Your Private Equity Partner

At Resurgent India, the experts constantly watch the moves of these big sharks, and as per that, formulate some of the scenarios, which can facilitate the clients’ interests in this market that is ready to take a great leap.

Everything you need to know about Merchant Banking in India:

Merchant banking, unlike your conventional (retail and commercial) banking, mostly deals with international trade focusing majorly on foreign currency and dealing with global, multinational corporations. For instance, they don’t offer banking services such as different accounts (savings, current, fixed, recurring) and other products that are generally focused on individual consumers and deal with organizational customers such as large financial institutions or organizations which focuses on international trade and commerce.

Merchant banking encompasses all the topics under the international financing and underwriting. Real estate deals, trade financing, foreign currencies & investments, international, multinational, mergers, acquisitions, buyouts, issuing letters of international credits, international fund transfer, international trading, providing consultation on global trading technologies, loan syndications, and other such international transactions are few classic examples which gives you an idea what these merchant banks do. Some of the most popular merchant banks that you may have heard of are Goldman Sachs, J P Morgan Chase, Citibank Group, etc.

In India however, merchant banking began in 1967 when the Reserve Bank permitted Grindlays Bank. They started consulting the then entrepreneurs and other large financial institution on management, planning, production, investment, and other economic issues. The success of Grindlays spawned many international and domestic players such as Citibank Group, State Bank of India, ICICI, Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, UCO Bank, to name a few noteworthy banks. Most of these banks also cater to individual customers under a separate business unit.

Now, if you are a merchant banking institution or any other financial body, we at Resurgent India have designed and developed automated, specific, AI back tools which can make most of your activities simple, quick, effective, and efficient. Our strong industry knowledge and deep experience make us an ideal partner to you in your journey towards fulfilling not just your short-term goals, but longer term goals too.