Financial Management

Introduction to Venture Capital Financing Venture Capital (VC) financing is a new type of financial intermediary that emerged in India during the 1980s. It involves providing long-term financial assistance to projects established to introduce new products, inventions, ideas, and technology. Venture Capital finance is particularly suitable for risk-oriented businesses that require huge investment and are expected to yield results after a longer period, typically 5 to 7 years. In a broad sense, Venture Capitalists (VCs) Read more

Introduction to Financial Institutions In today’s financial services marketplace, a financial institution exists primarily to provide a wide variety of deposit, lending, and investment products to individuals, businesses, or both. They are defined as intermediaries that mobilize savings and facilitate the allocation of funds in an efficient manner. Financial institutions are business organisations that act as mobilisers of savings and as purveyors of credit or finance, also providing various financial services to the community. Financial Read more

Book building is presented as an important price discovery mechanism used by corporates issuing securities. Its fundamental purpose is to discover the price of the issuer’s securities. It is described as one of the ways of raising finance by a company. Core Concept and Definition At its heart, book building is a process by which the demand for securities proposed to be issued by a body corporate is elicited and built up. During this process, Read more

Loan financing is presented as an important mode of finance raised by a company. Among the various types of loan financing, a significant source of debt financing for corporates is the syndicated loan. Core Concept and Definition A syndicated loan is essentially a loan that is availed from a group of lenders. This group of lenders constitutes a ‘Syndicate’ to offer the loan facility. Syndicated bank loans are described as one of the ways of Read more

Bridge financing is described as a form of temporary financing. Its primary purpose is to cover a company’s short-term costs until regular long-term financing is secured. The term “bridge financing” is used because it acts like a bridge that connects a company to debt capital through short-term borrowings. Core Concept and Purpose The need for bridge financing arises when an institution or company requires capital urgently to meet immediate short-term obligations, such as working capital Read more

Loan financing is a fundamental mode by which companies raise funds. It is considered a part of Creditorship Securities, which refers to finance mobilized from creditors. Unlike equity financing where funds come from owners, loan financing involves borrowing money from external parties who become creditors of the company. Debentures and Bonds are highlighted as two major parts of Creditorship Securities. A debenture is defined as a document issued by a company acknowledging a debt, serving Read more

A debenture is fundamentally a document issued by a company acknowledging a debt. It is a certificate issued under the company’s seal that serves as evidence of this debt. Debentures are considered a part of Creditorship Securities, also known as debt finance, which refers to finance mobilized from creditors. The Companies Act 1956/2013 defines “debenture” to include debenture stock, bonds, and any other securities of a company, whether or not they constitute a charge on Read more

Security financing is a fundamental aspect of financial management, particularly relevant to a company’s financing decisions and capital structure. It involves the mobilization of finance through the issuance of securities, such as shares and debentures. These are also referred to as corporate securities. Core Concept and Role At its core, security financing is a method companies use to raise funds from investors by offering them a stake in the company (ownership securities) or a claim Read more

A financial market is essentially a market where financial instruments are exchanged or traded. Unlike markets dealing with physical goods or services, a financial market involves the creation or transfer of financial assets. Financial assets or instruments represent a claim to the payment of a sum of money at a future point, and/or periodic payments like interest or dividends. The primary function of financial markets is to facilitate the transfer of funds from sectors with Read more