PROJECT FINANCING IN INDIA

SUBMITTED BY :
Yoginder Kumar 5291
Abhishek Abrol 5292
Chand Grewal 5298

SUBMITTED TO : Prof. Dinesh k

Sharma

Dated : 09-06-2023 1
What is Project Financing?
1.Funding of long term infrastructure and industrial projects.
2.Capital invested is paid back from cash flow generated.
3.It is a loan structure that relies primarily on cash flow for repayment with projects
assets as collateral.

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ADVANTAGES:
•Attract large debt with minimum risk.
•Set up and run several projects simultaneously.
•Diversifies risk.
•Isolate the project's assets and liabilities, which enhances accounting legibility.
•Limit or eliminate the recourse nature of the financing.

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SADVANTAGES:
igher interest rates and fees.
omplexity.
omplexity of risk allocation.
ompliance and documentation.
ender supervision.
onstant expert assistance.
crease transaction cost.

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Sources of Finance
SOURCES OF FINANCE

❖ Equity capital
❖ Debentures
❖ Convertible debentures
❖ Non convertible debentures
❖ Retained Earnings
❖ Foreign currency term loans
❖ Euro Issues
❖ Deferred credit
❖ Government subsidies
❖ Seed capital assistance

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EQUITY SHARE CAPITAL
Equity financing is a method of raising capital for a company by selling ownership shares or
issuing stocks to investors. It involves the sale of equity or ownership stakes in the company in
exchange for funds

SOURCES OF EQUITY FINANCE

Business angels.

Venture capital

Crowdfunding

Enterprise Investment Scheme (EIS).

The stock market.

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PREFERENCE SHARE
Preferred shares, also known as preference shares or preferred stock, are a class of shares issued
by a company that carry certain preferential rights and privileges compared to common shares

KEY POINTS

PREFERENCE IN DIVIDEND DISTRIBUTION

PRIORITY IN ASSET DISTRIBUTION

LIMITED VOTING RIGHTS

LESS RISKY LOWER RETURN

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DEBENTURES
Debentures are long-term debt instruments issued by companies or governments to raise funds
from the public.Debentures provide investors with a fixed income stream in the form of periodic
interest payments. The interest rate, known as the coupon rate, is predetermined and stated on the
debenture. It remains fixed throughout the life of the debenture

TYPES

CONVERTIBLE DEBENTURES

NON CONVERTIBLE DEBENTURES

SECURED DEBENTURES

UNSECURED DEBENTURES

CALLABLE DEBENTURES

PUTTABLE DEBENTURES 9
RETAINED EARNINGS
Retained earnings are the portion of a company's net income that is retained or reinvested in the
business rather than being distributed as dividends to shareholders. It represents the cumulative
profits or earnings that have been retained over time since the company's inception.

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❖ Foreign currency term loans
❖ Euro Issues
❖ Deferred credit
❖ Government subsidies
❖ Seed capital assistance

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6.Foreign currency term loans
❖ Assistance provided for the import of capital equipment.
❖ The interest rate is typically a floating rate as determined by the lenders.

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7.Euro issues
❖ Euro issues (from India perspective) are a method or mode by which
Indian companies raise funds outside India in foreign currency.

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8.Deferred credit
❖ Income received that will be recorded at a later date, under accrual
accounting standards.

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9.Government subsidies-
❖ Government provided subsidies to industrial units located in backward
area.

10.Seed capital assistance -

❖ This scheme, seek to supplement the resources of the promoters of the small
and medium scale industrial units which are eligible for all india financial
assistance.

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 CONCLUSION
In conclusion, project financing in India plays a crucial role in driving economic growth and development
in the country. It has been a key mechanism for funding large-scale infrastructure projects, such as power
plants, roads, railways, ports, and telecommunications networks.

Several factors contribute to the importance and attractiveness of project financing in India. First, the
country has a vast infrastructure deficit, and project financing provides the necessary capital to bridge this
gap. Second, project financing allows for risk-sharing among stakeholders, ensuring that the burden of
financing and operational risks is distributed appropriately. This helps attract private investors and
promotes public-private partnerships.

India has made significant efforts to improve the investment climate and create a favorable regulatory
framework for project financing. The government has introduced various policy reforms, including
streamlining approval processes, providing tax incentives, and establishing specialized institutions like the
National Investment and Infrastructure Fund (NIIF) and Infrastructure Debt Funds (IDFs). These
initiatives have helped facilitate project financing and attract domestic and foreign investors.

Furthermore, India's robust banking sector, non-banking financial companies (NBFCs), and development
finance institutions (DFIs) provide essential financial support for project financing.
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REFERENCES:
PRASANNA CHANDRA (4th e) -Projects planning analysis selection implementation &
review , Tata Mcgraw hill.

MINT, THE TIMES OF INDIA, Economic times

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ACKNOWLEDGEMENT
We would like to express my special thanks of gratitude to our professor
Dinesh Kumar Sharma, who gave us the golden opportunity to do this
wonderful presentation of Project planning ,analysis and management on
topic Project Financing in INDIA .
We came to know about so many new things about the means and objective
of project financing .

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