Kaizen Corporate Services Limited

Kaizen is proud to be associated with the continued thrust of Government Policies in creating world class infrastructure assets by helping diverse infrastructure project developers to have access to funds required for execution of these projects. Ours has been a story of delivery excellence of innovative funding options, diverse in nature, serving the entire infrastructure sector be it Power, Telecommunication, Ports/ Roads/ Bridges, Railways, Warehousing, Irrigation and Urban Infrastructure Development 

Of the numerous funding options for Infra Sector, the important ones are :

• Working Capital Finance: Large quantum of Non-funded Working Capital Limits in the form of Bid Bond Guarantees, Mobilization Advance /Advance Payment Guarantees, Performance Guarantees are required along with Letter of Credit Facility (Domestic/Import)( Sight/DA ) for procurement of Raw Material /Stores & Spares by Infra sector. Fund Based Working Capital limits, though normally required in small amounts, are also arranged.

• Equipment Financing: Term Loan requirements for Capex mainly for procurement of Construction Equipments are arranged from Banks/ NBFs on very lucrative terms justifying the trust reposed by the Project developers in us.

• BOT Funding : Each of such funding is uniquely structured to suit the specific requirements based on Annuity/Toll Collection from the project .Such funding by securitisation of future cash flows may extent upto a period of 15 years based upon the projected cash flow.

• SPV Level funding: Special Purpose Vehicle (SPV) Funding is gaining popularity amongst Infra Projects Developers as the comfort to the Lender is more on the quantum and quality of the projected cash flow.

• Funding for large Power Projects:- We syndicate funds from a group of lenders for large Hydro and Thermal Power projects. Such funding normally extends for a period up to 10-15 years, based upon the projected cash flows.

• Funding for New & Renewable Energy:- In line with the initiatives and trust of the Government in all matters relating to New & Renewable Energy which is Green, Clean and Sustainable, for supplementing the energy requirement of the country, we assist our clients to establish Biomass Power, Wind Power and Small Hydro Power Projects.

• Take-out financing arrangement through ECB:- As per the extant norms, refinancing of domestic Rupee loans with ECB is not permitted. However, keeping in view the special funding needs of the infrastructure sector, RBI has permitted take-out financing arrangement through ECB, under the approval route, for refinancing of Rupee loans availed from the domestic banks by eligible borrowers in the sea port, airport, and roads including bridges and power sectors for the development of new projects, subject to certain conditions as stipulated by RBI in their ECB Policy.

Kaizen is one of the leading national players in the Indian Treasury Market for placements of different rated treasury instruments such as CP, NCDs and PTCs issued by Corporate and other eligible institutions for different maturities. We are managing large treasuries of some of the Indian Corporates and also simultaneously placing treasury instruments for other corporate including NBFCs with Banks, FIs, Insurance Companies and Mutual Funds etc.

• Commercial Paper (CP): Commercial Paper is a rated, unsecured money market security issued by corporate, NBFCs, FIs and PDs at discount in the form of usance promissory note as a privately placed instrument with a fixed maturity of 7 days to a maximum of 1 year. It Can be mainly subscribed by Banks, FI, Insurance Companies FIIs and Mutual Funds. CP can be issued by issuers having ratings assigned by CRISIL, ICRA, FITCH and CARE having rating like P1+/P1, A1+/A1, F1+/F1 and PR1+/PR1 respectively.

• Short Term Non Convertible Debentures (NCDs):  Short Term NCDs are a unsecured, rated debt instrument issued by a Corporate (including NBFCs) with original or initial maturity upto 1 year and issued by way of private placement. NCDs shall not be issued for maturities of less than 90 days from the date of issue. The exercise date of option (put/call), if any, attached to NCDs shall not fall within the period of 90 days from the date of issue. 

• Long Term Non Convertible Debentures (NCDs): Long term NCD is generally a secured rated instrument issued by corporates including NBFCs generally having a minimum rating of A+ and above from any of the rating agencies with original or initial maturity up to 15 years and issued by way of private placement basis. The proceeds from these NCDs can be used for project financing, expansion/ diversification, long term working capital requirement, normal capital expenditures etc.

• Certificate of Deposits: Certificate of deposits is a short term borrowing issued by Scheduled Banks  (except RRB and Co-operative Banks) at discount in the form of usance promissory note with a fixed maturity of 7 days to a maximum of 1 year.

• Pass Through Certificates (PTC): Banks (original lender ) through Pass Through Certificates (PTCs) sells various types of loans to another institution ( which may promote a subsidiary for this purpose called Special Purpose Vehicle, which is a sort of Trust ) as a tool for hedging risks. SPV (also called issuer ) makes the payment to the original lender for the loans purchased under the arrangement and mediates between the investor and borrower. These loans are converted into a pool of securities like debentures (called Pass Through Certificates) by SPV. The original lender may keep on getting recoveries from the original borrowers. It passes on these recoveries to the SPV. The issuer in turn passes on these recoveries to the individual / institutional investors as per the arrangement made. If the borrower starts defaulting, the SPV sells off the mortgaged asset and recover the money

Kaizen offers its clients specialized services for their unique funding requirements that are normally not met through regular banking products. Such structured products are:

• Acquisition Funding: There has been a significant increase in the number of acquisitions by Indian companies, both domestic as well as overseas. Acquisition financing plays a critical role in the success of inorganic growth planned by the acquirer. Based on each client’s unique requirements, we advise on acquisition financing through appropriate financing structures.

• Mezzanine Funding: It is a subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares. It can be structured either as debt or preferred stock and can be completed through a variety of different structures based on the specific objectives of the transaction and the existing capital structure in place at the company.

• Promoter Funding: The financing is usually done against collateral of shares held by the promoter or Group Company for a period varying from 6-36 months. The transaction helps in unlocking the value of promoter shareholding by raising additional funds. It is mostly done to enable promoters to raise their stake in the company.

• Lease Rent Discounting: This facility is sanctioned based upon the rent to be collected over the period of the lease. The agreement is between the borrower and lender with major source of repayment from the lease rent that is directly deposited with the lender under an escrow mechanism and not with the borrower.

• Agri Finance / Warehouse Receipt Financing : We also arrange short term working capital loans in the form of Purchase Bill Discounting for our corporate clients using Agri Commodity as one of raw material input. We also arrange Line of Credit for short term loans against agriculture commodities stored in approved warehouse for various approved Agri Commodities. This helps in meeting short term working capital requirements of corporates engaged in manufacturing/ trading of Agri Commodities.

• Equipment Financing: Funds are raised to acquire equipments for productive use where the underlying equipment itself is provided as security. Such financing usually carries a lower rate of interest than the rate charged by senior lenders. Promoter’s contribution in the financing arrangement is usually lower as compared to margin requirements normally stipulated in project funding.

• Loan Against Property (LAP): Short to medium term fund raised for meeting mismatch both of short and long term in nature by providing property as security.

• Inter Corporate Deposit (ICD): Deposits made by one company with another company usually for a period of 3-6 months at a fixed rate of interest. These deposits are generally considered by the borrower to solve problem of short-term capital inadequacy.

Kaizen advices and facilitates fund raising for medium to large corporates through various structures such as:

• Project Finance: It is usually long term financing for industrial and infrastructure projects based on projected cash flows of the project rather than on the balance sheet of the project sponsors. It is normally provided for a period up to 10 years other than Infrastructure sector.

• Working Capital Finance: Short term finance to fund the gap in operating cycle of the business.

• Medium Term Loan: Term loan for a specific purpose like equipment/machinery, finance, renovation, maintenance having specified repayment schedule and a floating/fixed interest rate for a period of up to 5 years on specific/ Pari-Passu Charge.

• Corporate loan: Loans are both short and medium term in nature. Short term finance is raised to meet occasional liquidity constraints and is usually provided for a period up to 12 months whereas medium term finance is for general corporate purpose including normal capital expenditure having tenure up to 5 years.

• Real Estate (Construction loan): Loans provided to Real Estate Developers for meeting their past cost towards their upcoming residential and commercial projects to part finance construction cost. Such loans usually carry tenure up to 5 years depending upon the projected cash flows.

• Real Estate (Corporate loan ): Loans for Real Estate clients for general purpose to be utilized in their ongoing projects having a tenure up to 3 years.

• External commercial borrowing (ECB): it is raised through any internationally recognised sources such as Banks, Export Credit Agencies, Suppliers of Equipment, Foreign Collaborations, Foreign Equity - holders, International Capital Markets etc. in foreign currency usually linked to LIBOR and carry ceiling in line with all in cost guidelines as stipulated by RBI from time to time. The tenure of such loan varies from 3 to 7 years.