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Successfully Leveraging Capital Markets to Raise Funds

Successfully Leveraging Capital Markets to Raise Funds. T Ramoji Chief Financial Officer & Company Secretary, Manipal Hospitals. Successful Leverage. Beneficial Sourcing Less time consuming Long Term Benefits. Capital Markets. Are there just IPOs?

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Successfully Leveraging Capital Markets to Raise Funds

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  1. Successfully Leveraging Capital Markets to Raise Funds T Ramoji Chief Financial Officer & Company Secretary, Manipal Hospitals

  2. Successful Leverage • Beneficial Sourcing • Less time consuming • Long Term Benefits

  3. Capital Markets • Are there just IPOs? • Few instruments that matter to fund raiser: • Popularly known instruments: • Equity Shares • Preference Shares • Debentures: FCDs/NCDs/PCDs • Few Others Instruments: • Deep Discount Bonds • Secured Premium Notes with warrants • Warrants as sweeteners with Bonds or preferred stock (Equity Shares with Detachable Warrants) • EQUIPREF Instruments • ADRs/GDRs

  4. Right Instruments for you • Size of your company • Your appetite • Size of funds required • Flexibility • Lesser interference in decision making What is good for one company may not be good for other

  5. Four Pillars for Successful Exposure to Capital Markets • Pre-requisites • Preparation • Acts During Fund Raising • Acts Post Fund raising

  6. Pre-requisites • Phenomenal Product/Service • Management’s will to expose company to Capital Markets • Credibility, Integrity and transparency • Company and the relevant industry • Need to raise funds • There should be a need • Need should not be desperate • Good Corporate Governance

  7. Preparation • Watch the Industry • Watch out the performance of the industry you are in • How the companies, already approached the capital market, are faring • Have they spoiled the name of the industry

  8. Preparation…….. House Keeping • Accounts: Is your Current Balance Sheet Attractive? • Review every of your line items in financial statements • Review all the accounting policies adopted • Look in to every of your contracts with employees, customers, government agencies etc • Accounting System and ERP used • Management Team: • Integrity • Track Record • Ability to handle investors/media/govt agencies

  9. Preparation…….. House Keeping • Board • Composition of the Board • Integrity and reputation of each director • Track record • Track record of the companies in which the directors are directors or investors or senior managers • Associates • Auditors • Legal Advisors • Consultants • Mentors

  10. Preparation…….. House Keeping • Investors: • Any small investors are there? • Buy them out even at a premium if they do not add value to you • Suppliers/Customers

  11. Preparation……….. • Engage right advisors • Have a sound internal controls and Whistle Blower Policy • Set-up sound Corporate Governance • Sound Corporate Governance is a key for success • It can add to the premium you can charge on the securities • Review the Articles of Association with the help of experts

  12. Preparation……….. Restructuring • Business Restructuring: • Remove non-performing assets • Consolidate to take benefits of synergy • Spin-off to capture values separately • Legal/Corporate Restructuring: • Restructuring of Group companies • Review of Subsidiary and Holding Companies and their relevance • Inter Company investments • Foreign and in-land holdings

  13. Preparation……….. Governance • Keep Various Committees in Place • Audit Committee • Investment Committee • Compensation Committee • Investors Grievances Committee

  14. Preparation……….. • Socialising with various agencies – acquiring know-how • Planning the right approach: • Private Equity • Direct Capital Markets? • Brief the management on their respective roles while dealing with the market agencies/media/investors. • Run-up for IPO: • Engage the right agencies • Prepare Media Plan

  15. During the Process of Fund Raising • Ensure that the Records are kept ready for Due Diligence • Follow-strict time lines • Ensure timely compliance with various regulations • Ensure that proper explanations are given wherever required • Ensure that the entire team involved is on a common understanding of various issues

  16. Post…….. Fund Raising • Compliance with various legal requirements • File required returns if foreign funds are obtained • Contracts are terminated whichever do not have any relevance • Ensure that various CPs are met • Funds are utilized only upon satisfactory compliance to various requirements (both legal and contractual) • Ensure that proper relationship is maintained with investors/financiers. • Perform as per promises This is just beginning of exposure to capital markets and not the end.

  17. Thank You

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