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Financial assistence is extended by the banks to the exporters at
pre-shipment and post-shipment stages. Financial assitence extended to
the exporter priorto shipment of goods from India falls within the scope
of pre-shipment finance while that extended after shipment of the goods
falls under post-shipment finance. While the pre-shipment finance is
provided for working capital for the purchase of raw material,
processing, packaging, transportation, warehousing etc.of the goods
meant for export, post-shipment finance is generally provided in order
to bridge the gap between shipment of goods and and the realisation of
proceeds.
For raising funds in India, investors can raise a substantial portion
of the project cost in India through debt and equity instruments.
Applications for long-term loans can be made to State Financial
Corporations when the project is small - generally less than Rs.50
million - or to national-level financial institutions, such as IDBI and
IFCI, when the project is large. Institutions expect concrete project
and market reports, with reasonably firm costs and implementation plans.
Other long term financing options include leasing, hire purchase,
deferred payment guarantee etc. Capital markets are increasingly the
preferred route for raising finances in India, through equity shares,
debentures and hybrids. Investors can freely access the capital market
and in most cases freely price the issue. Investors with both small as
well as large fund requirements can mobilise funds from the market.
Private placement with institutional investors is also possible. Indian
companies also have the option of raising funds from international
capital markets. Short-term finances for working capital requirements
are available from commercial banks and through instruments such as
fixed deposits, inter-corporate deposits and commercial paper.
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