Fwd: Take out Finance note and Project work of SFM and PFA Groups 1 and II in the week beginning Nov 19.
shivani bhatia
Please pass on the following message to your classmates and the attached files. In the Take Out Finance note, take banks as initial financier of a project, IDFC as a financial institution committing for a take-out deal with the financing banks at the time of financial closure and later IDFC off-loading it using project bonds or sale of assets or securitization of cash-flows to insurance companies or in the capital market (a point made by Varun Joshi. But note that project bonds can be off-loaded in the capital market only when the project cash flow is certain, and construction, regulatory and other operational risks are not faced by the project).
Updated models, write-up and presentations should also be sent to all your class mates.
If you have any difficulty with either PAF or SFM projects, send a mail to my gmail account (I normally reply within 24 hrs). If required we can have a conference on the Gtalk or G-mail’s Hang-out. In case you feel that I have slept off like a Kumbhakaran, send a SMS.
PAF Group I
|
Session |
Group |
Case |
Project Members |
Assumptions |
Expectations from your group work |
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17 |
11 |
Evaluate Yes Bank’s exposure to infrastructure sector. How much exposure to infrastructure sector can it sustain under the XII FYP? |
|
I shall assume that you have studied and digested PNB’s presentation and model of your friends.(Done in Group II). If you cannot get it from your friends, take them from me. |
You are expected to adopt the same model or build a better model on the basis of assumptions made by you. Your assumptions should not violate RBI norms for raising money by banks/NBFCs as well as RBI’s exposure norms which were circulated to you earlier. |
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|
17 |
12 |
Financial Modeling of MRTS Link between Gandhinagar and Ahmedabad |
|
I shall assume that you have studied and digested Mumbai Metro presentation and model of your friends.(Done in Group II). |
You are expected to concentrate on demand estimates, cash flows and money which can be realized from allied activities because concessionaire cannot change ticket price at will. |
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|
18 |
13 |
Financial Modelling of Tata Power to show that 60 year NCD deserves AA credit with and without call option |
|
|
Project definition is quite clear and you are expected to look at the impact of Mundra UMPP’s uncertain cash-flow on Tata Power’s balance sheet. |
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|
18 |
14 |
Financial Modelling of Surguja Power Project |
|
|
We have already discussed the project. |
PAF Group II
|
17 |
29 |
Financial Modeling of Airtel Infratel |
Komal Poddar KASHYAP BAROT KARAN AHUJA |
|
We have already discussed the project. Note that Bharti Airtel, has filed its draft Red Herring Prospectus with the Securities and Exchange Board of India (Sebi) in September 2012. |
|
17 |
30 |
Appraisal of Mega Industrial Park at Dholera SIR |
Jitendra Jidewar Harish MK GOKULNATH S GAURAV BHALERAO |
|
We have already discussed the project. |
|
18 |
31 |
Financial Modeling of Hyderabad Metro |
Ganesh Samvaran Vudayagiri Femy Mehra Dheeraj Wadhwani Devesh Tripathi |
I shall assume that you have studied and digested Mumbai Metro presentation and model of your friends.(Done in Group I). |
You are expected to concentrate on demand estimates, cash flows and money which can be realized from allied activities because concessionaire cannot change ticket price at will. |
|
18 |
32 |
GMR Jadcherla Expressways Pvt Ltd. Could ADB lose out on its Partial Credit Guarantee Facility under this project? |
Devakshi Garg Dev Ashish CHIRANJIB BANERJEE CHINMAY GOTHI |
|
We have already discussed the project. You are expected to prepare and discuss Term Sheet of the PCGF facility. |
SFM Group I
|
17 |
9 |
Securitization of GMR cash flows. How much can the Indian corporate bond market absorb? |
NOORUDDIN . PARTHO CHOUDHURY PERVEZ SETHNA POOJA BANDEKAR |
|
GMR’s corporate structure is interesting. Study securitization guidelines of RBI and see what GMR can do? You are expected to highlight size, liquidity and cost of corporate bond market. Can GMR Issue Rupee Bonds Abroad as discussed in the ET article dated 07-11-2012 (article attached) |
|
17 |
10 |
Risk management at Wockhardt |
RACHIT AGRAWAL RACHIT UPADHYAY RAKESH REDDY |
|
What went wrong with its strategy of foreign currency risk management and how and why did it survive? |
|
18 |
11 |
SBI’s strategy to meet Basel II and Basle III norms |
RISHIKESH ASHAR RUSHIKESH DEHSPANDE SARATH BHASKARAN SAURABH TANDON SHAMIK BOSE |
I shall assume that you have studied and digested PNB’s presentation and model of your friends.(Done in PAF Group II). If you cannot get it from your friends, take them from me. |
Your suggested strategy should not violate RBI norms for raising money by banks. Develop strategies under the assumptions (i) FIIs cannot hold more than 10% equity (ii) Govt. equity should not fall below 61% (iii) SBI would like to have at least 1% higher CRAR than the norm until 2020. |
|
18 |
12 |
Corporation Bank’s strategy to meet Basel II and Basle III norms |
SHIVANI BHATIA SHRADDHA CHILLARIGE SHREY AGARWAL SHREYA GUPTA |
I shall assume that you have studied and digested PNB’s presentation and model of your friends.(Done in PAF Group II). If you cannot get it from your friends, take them from me. |
Your suggested strategy should not violate RBI norms for raising money by banks. Assume that government would not like to dilute its equity below 55%. Comment on Corporation Bank’s recent strategy and why has it failed or succeeded? Why doest it have such a high payout ratio and Would it be able to maintain such a high payout ratio in future? |
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SFM Group II
|
17 |
25 |
Securitization of IRB’s cash flows. How much can the Indian corporate bond market absorb? |
Komal Poddar Manish Singla MEGHA AGARWAL |
I shall assume that you have studied and digested financial model of IRB. (Done in PAF Group I). |
Study securitization guidelines of RBI and see what IRB can do? You are expected to highlight size, liquidity and cost of corporate bond market. Can IRB Issue Rupee Bonds Abroad as discussed in the ET article dated 07-11-2012 (article attached) Note that only project loans can be securitized. Equity of a SPV will be partial selling of the asset inn line with the MoA of the SPV. |
|
17 |
26 |
Critical evaluation of risk management of Ranbaxy. Why was it sold off? |
Mihir Kulkarni NIRANJANA MADHAVI . NUPUR BANSAL |
|
What went wrong with its strategy of foreign currency risk management and how and why did it survive? |
|
18 |
27 |
ICICI Bank’s strategy to meet Basel II and Basle III norms |
Priyank Narravula Rahul Panigrahi RAVISH SHARAN Ritesh Chopra |
I shall assume that you have studied and digested PNB’s presentation and model of your friends.(Done in PAF Group II). If you cannot get it from your friends, take them from me. |
Your suggested strategy should not violate RBI norms for raising money by private banks and FIIs holdings in an Indian private bank. Assume that ICICI would like to have at least 1% higher CRAR than the norm until 2020. |
|
18 |
28 |
HDFC Bank’s strategy to meet Basel II and Basle III norms |
RITIKA TIWARI Rohan Kashyap RUDRANIL GHOSH |
I shall assume that you have studied and digested PNB’s presentation and model of your friends.(Done in PAF Group II). If you cannot get it from your friends, take them from me. |
Your suggested strategy should not violate RBI norms for raising money by private banks and FIIs holdings in an Indian private bank. Assume that HDFC would like to have at least 1% higher CRAR than the norm until 2020 and almost nil NPAs. Under no circumstances HDFC would like to reduce its equity stake and HDFC cannot raise its equity stake beyond the prescribed RBI norm. |
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· Updated November 6, 2012, 5:10 p.m. ET
Nucor Galvanizes Gas Hopes
By LIAM DENNING
Besides natural gas, one thing the exploration-and-production sector has no shortage of is ingenuity on the financing front.
Take EnCana, which on Tuesday announced a deal whereby steel manufacturerNucor will take a 50% stake in some of its gas wells in exchange for helping to fund their development.
Bankers tend to call every deal a "win-win," but this one really could be. Nucor gains a secure supply of low-cost raw material to feed the expansion of so-called "direct reduced iron" facilities for making steel. This relatively old technology was uncompetitive in the U.S. until the arrival of cheap gas brought about by the shale boom, according to analyst Michelle Applebaum of Steel Market Intelligence. She calls it "game-changing for the steel industry."
For EnCana, Nucor provides capital for the development of gas resources. This is welcome in an industry suffering under low gas prices and which habitually outspends its cash flow in order to grow production—witness Chesapeake Energy'sraft of finance deals and disposals to bridge its funding gap this year.
What is also welcome is the signal that Nucor's deal sends. Coming alongside expansion by petrochemicals producers, it shows U.S. industry responding to low natural-gas prices and making decisions that boost demand in the long term.
The one fly in the ointment concerns the near term. Imaginative financing has helped the E&P industry avoid the more obvious cure for low gas prices: curbing production.
Data released last week showed onshore gas production still increased in August, albeit barely, despite historically weak gas prices. The recent rally—and Nucor's deal—offer E&P companies hope of higher sustainable prices in the future. In the meantime, though, their talent for fundraising also means it will take longer to work off the glut.
Write to Liam Denning at liam.d...@wsj.com
(Note that in terms of financial transaction EnCana has sold 50% of its equity in gas wells (in unproven gas wells) for Nucor’s development expenses now. A Rastogi)
Regards,
Shivani Bhatia
NMIMS 2011-2013
Mob. # 9004520154
Hardik Varma
---------- Forwarded message ----------
From: Anupam Rastogi <anupam....@nmims.edu>
Date: Thu, 8 Nov 2012 07:15:53 +0000
Subject: Take out Finance note and Project work of SFM and PFA Groups
1 and II in the week beginning Nov 19.
To: "shivani...@gmail.com" <shivani...@gmail.com>,
"hardi...@gmail.com" <hardi...@gmail.com>,
"singhal...@gmail.com" <singhal...@gmail.com>
Cc: Anupam Rastogi <anupam....@nmims.edu>
Shivani, Hardik and Tulika,
· Updated November 6, 2012, 5:10 p.m. ET
Nucor Galvanizes Gas Hopes
By LIAM DENNING<http://online.wsj.com/search/term.html?KEYWORDS=LIAM+DENNING&bylinesearch=true>
Besides natural gas, one thing the exploration-and-production sector
has no shortage of is ingenuity on the financing front.
to fund their development.
Bankers tend to call every deal a "win-win," but this one really could
be. Nucor gains a secure supply of low-cost raw material to feed the
expansion of so-called "direct reduced iron" facilities for making
steel. This relatively old technology was uncompetitive in the U.S.
until the arrival of cheap gas brought about by the shale boom,
according to analyst Michelle Applebaum of Steel Market Intelligence.
She calls it "game-changing for the steel industry."
For EnCana, Nucor provides capital for the development of gas
resources. This is welcome in an industry suffering under low gas
prices and which habitually outspends its cash flow in order to grow
production—witness Chesapeake
What is also welcome is the signal that Nucor's deal sends. Coming
alongside expansion by petrochemicals producers, it shows U.S.
industry responding to low natural-gas prices and making decisions
that boost demand in the long term.
The one fly in the ointment concerns the near term. Imaginative
financing has helped the E&P industry avoid the more obvious cure for
low gas prices: curbing production.
Data released last week showed onshore gas production still increased
in August, albeit barely, despite historically weak gas prices. The
recent rally—and Nucor's deal—offer E&P companies hope of higher
sustainable prices in the future. In the meantime, though, their
talent for fundraising also means it will take longer to work off the
glut.
(Note that in terms of financial transaction EnCana has sold 50% of
its equity in gas wells (in unproven gas wells) for Nucor’s
development expenses now. A Rastogi)
--
Regards
MBA 2011-13 Batch
SBM, NMIMS Mumbai
+91-9167186658