intro to sidbi - franchise india · pdf filesidbi risk capital operations fund of fund...
TRANSCRIPT
INTRO TO SIDBIWe empower MSMEs
July 26, 2013
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SIDBI : Background & thrust areas
Risk Capital : Products
Service sector
SIDBI : Background
• Apex Financial Institution for MSMEs
• Impact initiatives
o CGTMSE
• collateral free loans upto Rs.1 crore (> 1million guarantees)
• Operates through all banks
o Promotion of venture capital industry
• Corpus support to VCFs/ AIFs
• MSME Risk Capital fund/ India Opportunities Venture Fund
o MSME Exclusive SME rating agency
o Resource support to NBFCs/ SFCs/ Banks
o Micro Finance
• Direct Finance Practice
o Traditional products
o Risk capital products
o Sustainable finance
SIDBI :Thrust Areas
Risk Capital
Service Sector
focused products
Receivable Finance
Sustainable Finance
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SIDBI : Background & thrust areas
Risk Capital : Products
Service sector
SIDBI Risk Capital Operations
Fund of Fund Operations
Equity investment through SVCL
Direct Risk Capital
•Corpus support to VC/PE funds
•52 funds supported•11 regional and 41 national funds
•SIDBI Venture Capital Ltd : SIDBI’s venture capital arm
•Managing 4 funds•AUM : Rs 1500 crore
•Dispensed through SIDBI branches
•Direct disbursements to MSMEs
•Simpler RC products
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Non-Participative debt based products
Subordinated Debt
Fixed coupon
7 yr repayment
3 yr moratorium
Equity based
Optionally Convertible
Cumulative Preference Shares
Equity
Participative debt products Sub debt/debt/ debentures with
Conversion options Royalty features Equity kickers
Risk Capital Products
Risk Capital : eligible entities
Early Stage
• Early stage service enterprises
• Structured debt product
• Customer acceptance established
• Need not be profit making
• Maximum assistance : Rs.1 crore
• Optionally Convertible Debt
• Equity Kicker/ conversion rights
• Tenure : Upto 7 years
• Under CGTMSE cover
• Milestone based disbursement
Growth Stage
• Manufacturing and service sector
• Growing, profitable units with goodbanking track record
• Any requirement incl. intangibles
• Based on cash flows
• Participative and non participativedebt structures
• Tenure : Upto 7 years withmoratorium upto 3 years
• IRR expectation : around 16%
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SIDBI : Background & thrust areas
Risk Capital : Products
Service sector
Service Sector
Asset backed
Cashflowbased
Service Sector
• Projects benefitting MSMEs
• With more than 60% MSME presence
Asset heavy projects
• Loan against property
• Corporate loanLAPS
• IT, Software, BPO, Logistics etc.
• Other ServicesCash flow based
Franchisee / Dealer
Commercial Real Estate
• Hotels
• Hospitals
• Franchisee financing
• Dealer financing
Service Sector : Cash flow based
• Eligibility
o Existing entities with established profitable model (net profits in atleast 2 of last 3
years)
o New entities promoted by entities/promoter group with such track record in
similar/ related line of business
o VC/PE assisted companies
• Quantum
• Need based
• Eligible areas of finance
o Capex,
o movable assets,
o current assets,
o intangibles (marketing, brand building, etc.),
o WC/ WC margin.
Service Sector : Cash flow based
• Interest
o Internal rating based
• Repayment
o Upto 7 years with moratorium of upto 12 months based on cash flows
• Promoter contribution
o 25%
• DER
• 2.5:1
Service Sector : Cash flow based
Assets financed
•1st charge to lender•Senior lender status•But no comfort on realizable value
Identified cash flow
• Escrowed cash flow stream which is reliable•Should be able to cover repayment with some margin
Other Collaterals
• Any other available collateral• hard asset• liquid security• to cover part of the assistance
+ +
Assistance on the basis of
Sustainable Finance
Pioneered Green Rating
Promotes environmental and social standards inMSMEs
Funding for :
• environment friendly technologies
• Energy efficient equipments
Direct Finance – Term products
SecuredDebt
Subordinated Debt / OCSD
Convertible Debt
Convertible Debentures
OCCPS / Equity
Direct Finance – Short term products
Working Capital
Bill discounting
Guarantees / Letter of
Credit
