Apohan Corporate Consultants Private Limited

Where businesses realize their dreams!!!


Options for a Business to Raise Capital

Apohan Corporate Consultants Pvt. Ltd. > Financial Strategy > Options for a Business to Raise Capital

Sources of Business Capital

The options for raising capital are numerous. Some of them are from internal initiatives. Some other are from external resources. Apohan is listing here various sources & initiatives of capital that are available to a business for various activities it can undertake to make available a question of capital.


Equity:

Promoters’ equity capital
Equity capital from non-promoter initial shareholders
Equity capital from directors
Equity from general public fruit initial public offer (IPO) for follow-on public offer (FPO)
Private institutional equity
Private individual equity
Investment trusts
Family offices
Wealth management companies
Purpose specific equity funds
Seed funding, angel funding, venture capital, crowdsourcing
All other forms of equity


Loans:

Bank loans
NBFC loans
Other institutional loans
Loans from friends and family
Credit from various types of funds that lend businesses
Preference equity capital
Debentures
Corporate bonds
Interest free loan from directors
Inter corporate loans from related companies or and related companies
Interest free advances from several stakeholders
Project Finance with minimum margin money
Working capital finance
Unsecured personal loans by the directors
Loan against pledged shares by the shareholders


 

Grants & schemes:

Grants from government or private institutions
Financial benefits from several schemes of the government
Export incentives
Area specific incentives by shifting operations
Tax exemptions


Foreign Funds:

Foreign currency loans through external commercial borrowings
Foreign currency bonds
ADR and GDR
Foreign direct investment
Restructuring:
Financial restructuring
Business restructuring
Refinance benefit through shifting loan to a bank with better terms
Changing the nature of capital instrument
Enhanced credit from the same bank or different bank
Getting moratorium
Extending repayment period
Ballooning repayment


Issues:

Rights issue to the existing shareholders
Preferential allocation
Private placement


Discipline Actions:

Reduction in dividend payouts
Reduction in overheads
Reduction in compliance consultancy costs
Reduction in directorial remuneration
Reduction in remuneration of key managerial persons


Mergers & Acquisitions (M&A)

Mergers and acquisitions and other types of business transfers
Demergers and divestitures some verticals of the business
Sale of strategic assets or fixed assets
Slump sale
Share transfer


Breathing Easy on Growth:

Dropping Greenfield and brownfield projects
Shutting down unviable projects and product lines and project locations
Stopping the research and development works


Encashment:

Disposal of inventory
Liquidation of investments
Selling the real estate and leasing back
Leasing plant and machinery instead of buying them
Leasing key tools
Asset sale
Selling the brand or similar intangible assets
Monetizing rights
Franchising or reducing the role in value chain


Customers:

Past internal profit accruals or reserves
Revenues or payments from clients or income from operations
Advances from clients
Bill discounting
Increase in prices
Increase in operating volumes
Bidding through joint ventures if the company is not eligible standalone
Shortening the cash conversion cycle
Exploring more profitable markets
Engaging in contract production by outsourcing the capacity to other brands
Exploring exports and international business
Exploring new businesses new products replacing the existing ones


Suppliers:

Increased credit amount & period from suppliers
Employee stock option plan
Finding alternate economical competing suppliers
Just-in-time procurement
Balancing between cash flow timings and net life cycle cost of procurement


Cost cutting

Layoffs and salary cuts
Supplier renegotiation
Reducing the marketing costs
Suppressing the supply chain margins
Lowering the quality standards removing the unnecessary features in the products and services
Outsourcing management services to reduce corporate overheads
Outsourcing labour services to reduce long term liabilities


Many others


Apohan’s Role:

Apohan not only formulates strategy to select and eliminate this resources, to decide the fraction of capital coming from them and approaches the equity type of them on behalf of the business.

 

Bookmark this page