nurturing entrepreneurs - seeding working capital
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N U R T U R I N G E N T R E P R E N E U R S ’ S E E D I N G W O R K I N G C A P I TA L
E M P O W E R I N G E C O N O M Y
11.5%
Growth Per Year
69 Million
Employment
29.8 Mn
Enterprises
32.5 Tr Finance
Need
MSME sector plays a significant role in the Indian economy Catalyst for socio-economic transformation of the country Generates employment, discourages rural-urban migration Helps to build a thriving entrepreneurial eco-system Promotes use of indigenous technologies
MSMEs in India
Source: IFC MSME Report
Lack of Infrastructure
Obsolete Technology
Inadequate Market Linkages
Lack of Managerial Competence
Inadequate Finance
Lack of Sound Policies
Total finance requirement of INR 32.5 trillion in the MSME sector
INR 26 trillion of debt demand and
INR 6.5 trillion of equity demand
R o a d b l o c k s !
Source: IFC MSME Report
Need For Working Capital…
Types of Working Capital
Working Capital
Basis of Concept Basis of Time
Gross Working
Capital
Net Working
Capital Permanent or Fixed
Working Capital
Temporary or Variable
Working Capital
Seasonal
Working Capital
Special
Working Capital
Regular
Working Capital
Reserve
Working Capital
Procuring Raw Material Plant & Machinery Salaries of Staff Pay Expenses Pay Short Term Debts
Measure of Liquidity Measure of Future Credit Worthiness
Operating Cycle Of A Typical Company
Raw Material Work In
Progress
Finished Goods
Sales Accounts
Receivable
Cash
Accounts Payable Value Addition
Working Capital Cycle
Fixed Assets
Permanent Current Assets
Total Assets
Fluctuating Current Assets
Time
Short-term
Debt
Long-term
Debt +
Equity Capital
Aggressive Approach to Asset Financing
Challenges in Accessing Finance
Unavailability of collateral free loan Delayed payments Credit Rating Traditional banking products are inadequate to meet working capital requirements
Exhausted OD Limits leads to more requirement of WC
Who We Are
Religare Finvest Limited – About Us
Saluting The
Spirit Of
Entrepreneurship!
www.religarefinvest.com
RFL is committed to providing debt capital to power the growth of the SME’s which constitute as the backbone of India’s economy.
The diversified suite of lending solutions include:
SME Working Capital Loans SME Mortgage Loans Loans Against Marketable Securities
Customized Solutions for SMEs
Success Story Machine Tools
3 Years of Vintage Initial Capital of 30 Lacs Invested in Product Development, Machinery, Marketing Managed initial years from savings & borrowings from acquaintances
Background
Disclaimer: Illustrative example of success on our 360 client coverage model. Any resemblance to anyone is coincidental.
Aspires to be leader in
supplier of mould tool to
leading blue chip
manufacturing companies
Prasanna Naidu: Mechanical engineer
from a reputed institute and a post
graduate in tool design & manufacture…
Current market Size In India is approximately INR 10236 cr Indian Machine tool industry has around 1000 units Total exports stands at around INR 90 cr Employs a workforce totaling 65000 skilled and unskilled personnel
Why Machine Tools
Source : www.imtma.in
User Sectors
Automotive
Auto Ancillary
Electricals & Electronics
Ball & Roller Bearings
Consumer Durables
Key Challenges Faced By Prasanna
Hurdles Faced
Financial Need:
Requirement of capital: INR 12 cr
Working capital required for buying machinery
Maintenance, staff salaries
Competition
Import of machine tools from
China, Taiwan, and Korea posing
stiff competition.
Rapid increase in raw material
cost and longer delivery times
resulting into pressure on profit
margins
Networking
Unable to connect
with key buyers
How We Helped
How RFL Helped
Future Capability
Utilize Religare Eco-System
Business Development
Introduced Prasanna to Credit and Investment banking teams Referred for business transactions to other RFL entities Introduction to CII mentor programs
Market analysis Financial plan Risk analysis Marketing & Sales plan
Business approach Future potential Owners capability Credit rating
Advantage RFL
Brand and marketing strategy
Export related consultancy
Training support for employees
RFL Advantage
Revamp of website
Communication Packs
Senior management team
trained by top consultants
Development of in house
training module
Project exceedingly successful
Market share quadrupled
Religare network advantage
T h a n k Y o u
For feedback & suggestions please write to [email protected]
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