Successfully Leveraging Capital Markets

to Raise Funds

T RamojiChief Financial Officer & Company Secretary,Manipal Hospitals

Successful Leverage

Beneficial SourcingLess time consumingLong Term Benefits

Capital MarketsAre 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

Right Instruments for youSize of your companyYour appetiteSize of funds requiredFlexibilityLesser interference in decision making

What is good for one company may not be good for other

Four Pillars for Successful Exposure to Capital Markets

1. Pre-requisites2. Preparation3. Acts During Fund Raising4. Acts Post Fund raising

Pre-requisites

Phenomenal Product/ServiceManagement’s will to expose company to

Capital MarketsCredibility, Integrity and transparencyCompany and the relevant industryNeed to raise funds

There should be a needNeed should not be desperate

Good Corporate Governance

Preparation

1. 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

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

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

AssociatesAuditorsLegal AdvisorsConsultants Mentors

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

Preparation………..

Engage right advisors Have a sound internal controls and Whistle

Blower PolicySet-up sound Corporate Governance

Sound Corporate Governance is a key for success It can add to the premium you can charge on the

securitiesReview the Articles of Association with the help

of experts

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

Preparation……….. Governance

Keep Various Committees in Place Audit Committee Investment Committee Compensation Committee Investors Grievances Committee

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

During the Process of Fund Raising

Ensure that the Records are kept ready for Due Diligence

Follow-strict time linesEnsure timely compliance with various

regulationsEnsure that proper explanations are given

wherever requiredEnsure that the entire team involved is on a

common understanding of various issues

Post…….. Fund Raising

Compliance with various legal requirementsFile required returns if foreign funds are obtainedContracts are terminated whichever do not have any relevanceEnsure that various CPs are metFunds 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.

Thank You