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Raising Finances
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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