Case Problem Statement

1. One businessman after having many successful years of sweet shop wants to invest in Real Estate. His plan is to b
buying the flat with DEBT:EQUITY ratio as 70:30. He is ready to invest the euity portion and looking for debt from co
debt through the rent he recieved and keep the flat as collatoral against the debt. He is looking to buy a flat of cost
Lacs per month.

2. Considering this case as a classic / simple case of Non-Recourse Debt (Project Finance), we prepared the finan
collection and debt repayment to figured out if the project is feasible for financing or not. We too

3. Please analyse each sheet, each term and formula used in the sheet. In Module 4 you are supposed to prep
infrastructure projects
m Statement

t in Real Estate. His plan is to buy a luxury flat and rent it. He want to take a loan for
n and looking for debt from commercial banks of India. He is planned to pay back the
is looking to buy a flat of cost ~ Rs. 1 Crore and expecting a monthly rent of Rs. 2.50

inance), we prepared the financial model and analyse the cost brak down, revenue
ble for financing or not. We took proper assumptions for the analysis

le 4 you are supposed to prepare a same financial modeling for different realistic
ure projects
 Project Cost (CapEx)
Rate 3,000.00 % of Project Cost
Flat 2500 7,500,000 73.7%
Interior Decoration 125 375,000 3.7%
Furniture 250 750,000 7.4%
Fixtures 10 30,000 0.3%
Building Registration 10 30,000 0.3%

Broker Fee 75 225,000 2.2%

Stamp Duty 250 750,000 7.4%
Fund Raising Fee 25 75,000 0.7%
Transfer of Deed Fee 50 150,000 1.5%

Interest During Moratorium 60 180,000 1.8%

Loan and Documentation Fee 25 75,000 0.7%

CSR, HSE, Training 10 30,000 0.3%

Total Project Cost 10,170,000

O & M Cost (Monthly Breakdown) (OpEx)

Building Maintainence 15 45,000
Utilities ( Electric + Water + Internet) 4 12,000
Salary (Maid + Acountant) 4 12,000
Plumber + Electrician + Misc etc 3 9,000
Insurance (0.35%) 10 30,000

Total O & M Cost (per year) 966,000

 Revenue Parameters
City Mumbai
Size (Sq. ft) 3000
Avg. Occupancy (Months) 10
Rent (Rs,/Month) 250000
Deposits (Months) 4 (OR One-Third of Annual Rent)
Rent Appreciation 5%
Interest on Rental Deposit 8%

Year---> 1 2 3 4 5
Rent 2.500 2.625 2.756 2.894 3.039
Interest on Deposit 0.000 0.070 0.074 0.077 0.081
Revenue (million INR) 2.500 2.695 2.830 2.971 3.120
 6 7 8 9 10 11 12 13 14 15
3.191 3.350 3.518 3.694 3.878 4.072 4.276 4.490 4.714 4.950
0.085 0.089 0.094 0.098 0.103 0.109 0.114 0.120 0.126 0.132
3.276 3.440 3.612 3.792 3.982 4.181 4.390 4.609 4.840 5.082
 16 17 18 19 20 21 22 23 24 25
5.197 5.457 5.730 6.017 6.317 6.633 6.965 7.313 7.679 8.063
0.139 0.146 0.153 0.160 0.168 0.177 0.186 0.195 0.205 0.215
5.336 5.603 5.883 6.177 6.486 6.810 7.151 7.508 7.884 8.278
 PROJECT DETAILS ASS
Size in Sq Ft 3000 10.17 Inflation 4%
Equity 30% 3.05 DDT 0%
Debt 70% 7.12 Tax Holiday 0 Yr
Debt Service Resv(DSR) 0.25 Years Tax Rate 25%

Year ----> Today COD 1

Date ----> 18-Dec-22 19-Mar-23 31-Mar-24
Revenue Collection
Rent 2.5
Interest on Deposit 0.000
Other Sources 0.000
Total Revenue (Million INR) 2.500
Operating Expenses
Building Maintainence 0.540
Utilities (Elctric + Water + Internet) 0.144
Salary (Maid + Accountant) 0.144
Plumber + Electrician + Misc etc 0.108
Insurance (0.35%) 0.030
Total Operating Expenses (Mn INR) 0.966

EBITDA 1.534
Non- Operating Expenses
Interest Payment -0.696
Depreciation -0.525
Total Non- Operating Expenses -1.221
Income Before Taxes 0.313
Tax -0.078
Net Income 0.235
Cash Flow
Equity -3.05 0
Net Income 0.235
Add back depreciation 0.525
Principal Payment(-) -0.439
CSR (.50 % of Net Income) (-) -0.004
Final Project Cashflows (Equity) -3.05 0 0.317

DSCR---> 1.28

Final Project Cashflow -10.17 0 1.452

 ASSUMPTIONS
Debt Rate 10% USD/INR 70
Moratorium 0.25 Yr Discount 10.00%
Debt Tenure 10 Yr Construction Time 0.25 yrs
Depreciation 7% MAT 0.19

2 3 4 5 6
31-Mar-25 31-Mar-26 31-Mar-27 31-Mar-28 31-Mar-29

2.625 2.756 2.894 3.039 3.191

0.070 0.074 0.077 0.081 0.085
0.000 0.000 0.000 0.000 0.000
2.695 2.830 2.971 3.120 3.276

0.562 0.584 0.607 0.632 0.657

0.150 0.156 0.162 0.168 0.175
0.150 0.156 0.162 0.168 0.175
0.112 0.117 0.121 0.126 0.131
0.031 0.032 0.034 0.035 0.036
1.005 1.045 1.087 1.130 1.175

1.690 1.785 1.885 1.990 2.101

-0.650 -0.600 -0.545 -0.483 -0.416

-0.488 -0.454 -0.422 -0.393 -0.365
-1.139 -1.054 -0.967 -0.876 -0.781
0.552 0.731 0.918 1.114 1.320
-0.138 -0.183 -0.229 -0.278 -0.330
0.414 0.548 0.688 0.835 0.990

0 0 0 0 0
0.414 0.548 0.688 0.835 0.990
0.488 0.454 0.422 0.393 0.365
-0.484 -0.534 -0.590 -0.651 -0.719
-0.005 -0.005 -0.006 -0.006 -0.007
0.413 0.463 0.515 0.571 0.629

1.37 1.41 1.46 1.51 1.56

1.548 1.597 1.650 1.705 1.764

 Results
Equity IRR 23.22%
Min DSCR 1.28
Avg. DSCR 1.54
Project IRR 17.13%

7 8 9 10 11
31-Mar-30 31-Mar-31 31-Mar-32 31-Mar-33 31-Mar-34

3.350 3.518 3.694 3.878 4.072

0.089 0.094 0.098 0.103 0.109
0.000 0.000 0.000 0.000 0.000
3.440 3.612 3.792 3.982 4.181

0.683 0.711 0.739 0.769 0.799

0.182 0.189 0.197 0.205 0.213
0.182 0.189 0.197 0.205 0.213
0.137 0.142 0.148 0.154 0.160
0.038 0.039 0.041 0.043 0.044
1.222 1.271 1.322 1.375 1.430

2.217 2.340 2.470 2.607 2.751

-0.341 -0.259 -0.168 -0.068 0

-0.340 -0.316 -0.294 -0.273 -0.254
-0.681 -0.575 -0.462 -0.341 -0.254
1.536 1.766 2.008 2.266 2.497
-0.384 -0.441 -0.502 -0.567 -0.624
1.152 1.324 1.506 1.700 1.873

0 0 0 0 0
1.152 1.324 1.506 1.700 1.873
0.340 0.316 0.294 0.273 0.254
-0.793 -0.876 -0.967 -1.067 0.000
-0.007 -0.008 -0.009 -0.010 -0.011
0.691 0.756 0.824 0.896 2.116

1.62 1.67 1.73 1.80

1.826 1.891 1.959 2.030 2.116

 12 13 14 15 16
31-Mar-35 31-Mar-36 31-Mar-37 31-Mar-38 31-Mar-39

4.276 4.490 4.714 4.950 5.197

0.114 0.120 0.126 0.132 0.139
0.000 0.000 0.000 0.000 0.000
4.390 4.609 4.840 5.082 5.336

0.831 0.865 0.899 0.935 0.973

0.222 0.231 0.240 0.249 0.259
0.222 0.231 0.240 0.249 0.259
0.166 0.173 0.180 0.187 0.195
0.046 0.048 0.050 0.052 0.054
1.487 1.547 1.608 1.673 1.740

2.903 3.063 3.231 3.409 3.596

0 0 0 0 0
-0.236 -0.220 -0.204 -0.190 -0.177
-0.236 -0.220 -0.204 -0.190 -0.177
2.666 2.843 3.027 3.219 3.419
-0.667 -0.711 -0.757 -0.805 -0.855
2.000 2.132 2.270 2.414 2.565

0 0 0 0 0
2.000 2.132 2.270 2.414 2.565
0.236 0.220 0.204 0.190 0.177
0.000 0.000 0.000 0.000 0.000
-0.011 -0.012 -0.012 -0.013 -0.014
2.225 2.340 2.462 2.591 2.728

2.225 2.340 2.462 2.591 2.728

 17 18 19 20 21
31-Mar-40 31-Mar-41 31-Mar-42 31-Mar-43 31-Mar-44

5.457 5.730 6.017 6.317 6.633

0.146 0.153 0.160 0.168 0.177
0.000 0.000 0.000 0.000 0.000
5.603 5.883 6.177 6.486 6.810

1.011 1.052 1.094 1.138 1.183

0.270 0.280 0.292 0.303 0.316
0.270 0.280 0.292 0.303 0.316
0.202 0.210 0.219 0.228 0.237
0.056 0.058 0.061 0.063 0.066
1.809 1.882 1.957 2.035 2.117

3.793 4.001 4.220 4.451 4.694

0 0 0 0 0
-0.164 -0.153 -0.142 -0.132 -0.123
-0.164 -0.153 -0.142 -0.132 -0.123
3.629 3.848 4.078 4.318 4.571
-0.907 -0.962 -1.019 -1.080 -1.143
2.722 2.886 3.058 3.239 3.428

0 0 0 0 0
2.722 2.886 3.058 3.239 3.428
0.164 0.153 0.142 0.132 0.123
0.000 0.000 0.000 0.000 0.000
-0.014 -0.015 -0.016 -0.017 -0.018
2.872 3.024 3.185 3.354 3.533

2.872 3.024 3.185 3.354 3.533

 22 23 24 25
31-Mar-45 31-Mar-46 31-Mar-47 31-Mar-48

6.965 7.313 7.679 8.063

0.186 0.195 0.205 0.215
0.000 0.000 0.000 0.000
7.151 7.508 7.884 8.278

1.231 1.280 1.331 1.384

0.328 0.341 0.355 0.369
0.328 0.341 0.355 0.369
0.246 0.256 0.266 0.277
0.068 0.071 0.074 0.077
2.201 2.289 2.381 2.476

4.949 5.219 5.503 5.802

0 0 0 0
-0.114 -0.106 -0.099 -0.092
-0.114 -0.106 -0.099 -0.092
4.835 5.112 5.404 5.710
-1.209 -1.278 -1.351 -1.427
3.626 3.834 4.053 4.282

0 0 0 0
3.626 3.834 4.053 4.282
0.114 0.106 0.099 0.092
0.000 0.000 0.000 0.000
-0.019 -0.020 -0.021 -0.022
3.722 3.921 4.131 4.352

3.722 3.921 4.131 4.352

 Debt/Loan Repayment Schedu
Debt Amount 7.12 Period No. Date (EoQ) Int. Pmt. Prin. Pmt.
Debt rate 10% 0 14-Feb-23 0.18 0.00
Moratorium 0.25 #NAME? 15-May-23 0.18 0.11
Term 10 #NAME? 13-Aug-23 0.18 0.11
Payment Periods 40 #NAME? 11-Nov-23 #NAME? #NAME?
One period is one quarter #NAME? 9-Feb-24 #NAME? #NAME?
COD 14-Feb-23 #NAME? 9-May-24 #NAME? #NAME?
First Quarter End 15-May-23 #NAME? 7-Aug-24 #NAME? #NAME?
#NAME? 5-Nov-24 #NAME? #NAME?
#NAME? 3-Feb-25 #NAME? #NAME?
#NAME? 4-May-25 #NAME? #NAME?
#NAME? 2-Aug-25 #NAME? #NAME?
#NAME? 31-Oct-25 #NAME? #NAME?
#NAME? 29-Jan-26 #NAME? #NAME?
#NAME? 29-Apr-26 #NAME? #NAME?
#NAME? 28-Jul-26 #NAME? #NAME?
#NAME? 26-Oct-26 #NAME? #NAME?
#NAME? 24-Jan-27 #NAME? #NAME?
#NAME? 24-Apr-27 #NAME? #NAME?
#NAME? 23-Jul-27 #NAME? #NAME?
#NAME? 21-Oct-27 #NAME? #NAME?
#NAME? 19-Jan-28 #NAME? #NAME?
#NAME? 18-Apr-28 #NAME? #NAME?
#NAME? 17-Jul-28 #NAME? #NAME?
#NAME? 15-Oct-28 #NAME? #NAME?
#NAME? 13-Jan-29 #NAME? #NAME?
#NAME? 13-Apr-29 #NAME? #NAME?
#NAME? 12-Jul-29 #NAME? #NAME?
#NAME? 10-Oct-29 #NAME? #NAME?
#NAME? 8-Jan-30 #NAME? #NAME?
#NAME? 8-Apr-30 #NAME? #NAME?
#NAME? 7-Jul-30 #NAME? #NAME?
#NAME? 5-Oct-30 #NAME? #NAME?
#NAME? 3-Jan-31 #NAME? #NAME?
#NAME? 3-Apr-31 #NAME? #NAME?
#NAME? 2-Jul-31 #NAME? #NAME?
#NAME? 30-Sep-31 #NAME? #NAME?
#NAME? 29-Dec-31 #NAME? #NAME?
#NAME? 28-Mar-32 #NAME? #NAME?
#NAME? 26-Jun-32 #NAME? #NAME?
#NAME? 24-Sep-32 #NAME? #NAME?
#NAME? 23-Dec-32 #NAME? #NAME?
yment Schedule
Total Pmt. Prin. Balance Date (EoQ) Int. Pmt. Prin.Pmt. Total Pmt.
0.18 7.12 31-Mar-24 0.696 0.44 1.135
0.28 7.01 31-Mar-25 0.650 0.48 1.135
0.28 6.91 31-Mar-26 0.600 0.53 1.135
#NAME? 6.80 31-Mar-27 0.545 0.59 1.135
#NAME? #NAME? 30-Mar-28 0.483 0.65 1.135
#NAME? #NAME? 30-Mar-29 0.416 0.72 1.135
#NAME? #NAME? 30-Mar-30 0.341 0.79 1.135
#NAME? #NAME? 30-Mar-31 0.259 0.88 1.135
#NAME? #NAME? 29-Mar-32 0.168 0.97 1.135
#NAME? #NAME? 29-Mar-33 0.068 1.07 1.135
#NAME? #NAME? Total 4.225 7.12 11.345
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?
#NAME? #NAME?