Infrastructure Finance in India

Summary: Insurance Broking companies in India offer specialized insurance services to commercial/corporate clients. This article takes a look at some details of Insurance Brokers in India and the benefits of using their services.

An Insurance Broker mainly acts as a link between insurance firms and businesses. While insurance broking has been around for over 12 decades in the international market, it has only been introduced recently in India. An Insurance Broker’s role has also grown with time to go from just acting as a link between businesses and insurance firms to providing a host of other value added services.

In addition to the structuring and placement of insurance cover, these value added services include risk management, claims management, alternative risk transfer mechanisms, captive management, employee-benefit solutions, actuarial services, pre-emergency planning and evacuation, HR outsourcing, political and environment risk advice, and business continuity planning.

Insurance Broking in India

The insurance broking concept is highly established in Western markets with close to 80 – 90% of all corporate/commercial insurance business performed through brokers and not directly between clients and insurers.

India, has adopted behind western countries, to implement and transact commercial/corporate insurance business through brokers. It was only in 2002 that the Insurance Regulatory and Development Authority (IRDA) of India came out with its first set of regulations permitting Insurance Brokers in India to operate. The first insurance broking companies allowed to operate in India were issued licenses in 2003. The IRDA has since then licensed more than 250 insurance broking companies in India.

Benefits of Using an Insurance Broker:

Insurance Brokers are trained and experienced professionals with expertise, negotiating skills, and knowledge of the market, thus finding clients the best insurance deal for their needs at the best cost.

Insurance Brokers represent clients, not insurance insurers.

They are informed of new developments in national and international markets.

Insurance Brokers can be held accountable to clients for professional negligence.

Experienced in the speedy and fair settlement of claims making life easier for clients.

Insurance Brokers are trained and competent to evaluate insurance companies based on services, coverage, and price and thus facilitate healthy competition, they are known for getting better deals in difficult markets.

Brokers possess a greater bargaining power that can result in significant cost savings for clients.

Significant domain knowledge that can help with scrutinizing survey reports and determine/identify lapses.

They offer various other services such as expert handling of claims, policy audit, improvement in coverages, and day-to-day policy administration

Insurance Brokers help the client see all the facets of an insurance policy and therefore help the client choose the best.

Insurance Brokers can help with structuring specialized insurance plans with various combinations of policy limits and minimizing deductibles, as well as optimizing coverage terms.

Insurance Brokers help clients obtain the best products with the best terms from their insurer, therefore eliminating the need to choose a new insurer is often not necessary.

Insurance Brokers help the client assess the ‘terms’ and ‘service’ they are enjoying as compared to the best available in the present competitive market, therefore helping clients take advantage of the competition.

Insurance Broking Companies in India offer clients a host of services, allowing them to enjoy the best possible insurance for their needs based on the best possible coverage available in the market.

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Summary: This article discusses National E-Governance and the basic cornerstones of what the NEGP India aims to fulfill. It also briefly touches upon the most immediate advantages of National E-Governance.

Over the years, the digital revolution has made several functions, social and societal procedures much more convenient and transparent. Hence, it is no surprise that this digital revolution would spread to the idea of E-Governance as well. It makes great sense for national governance to be digitized for better transparency and convenience – for both the government and its people.

The government of India has been steadily implementing digitization to some of its most basic and important functions, which have slowly spread to services and procedural requirements, thereby making it easier for people to avail the same.

Why was the National E-Governance Plan Undertaken?

The Passport Seva Kendra offices and the specifics of the Aadhaar card (which can also be downloaded online) are some of the most recent examples of how National E-Governance has spread to make present procedures (and future procedures) more convenient for the people. Thus, the National E-Governance Plan has been undertaken to ensure that this digitization is made available all over the country, from the nation's busiest metropolitan cities right to the nation's smallest or remotest rural villages. In other words, the National E-Governance Plan is aimed at bringing about an ICT (Information Communication Technology) network all over the nation to increase efficiency and improve the accessibility of services for people.

 What are the Aims of NEGP India?

 As with any scheme or plan, the NEGP of India is marked by its most prominent aims and goals. The NEGP aims to provide speed, transparency, and convenience to all the people of the nation when it comes to governmental services. As in, since the services are provided virtually through the country's own information and communication service network via the Internet, it will be faster and more transparent. Moreover, the Internet is now easily available and accessible via mobile phones, which are rampantly used in every corner of the country.

Hence, the NEGP provides a broader and convenient platform on which the citizens can avail vital administrative services. Furthermore, digitization has reduced the cost of these services and the need to hire agents and middlemen. Thus, empowering the citizens of India, and consequently empowering the country as a whole.

In short, the NEGP India scheme aims to provide a more convenient and efficient form of governance in India that will benefit both its citizens as well as the country as a whole.

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Summary: This article discusses the meaning of alternative investment funds and its relevance in the business world. Also, the difference between the alternative investment funds and traditional form of investments are explained.

Alternative Investment Funds consists of tailor-made investment arrangements that invest in non-traditional forms of investment alternative. Investment alternatives basically refer to all kind of investments that are different from the traditional institutions like mutual funds and do not include conventional investments like bonds, stocks, and cash.

An Alternative investment fund (AIF) is a privately pooled investment fund that includes Investment alternatives such as:

Private equity

Hedge funds

Managed futures

Real Estate

Commodities

Derivatives contracts

Types of Investment Alternatives

The alternative investment funds can be studied under three broad classifications:

Category I

AIF in this category receives concessions from the ruling government. They include funds like infrastructure funds, social venture funds, SME funds and venture capital funds.

Category II

These AIFs do not receive any concession or special incentives from the government and therefore they have the freedom to be invested anywhere without raising a debt. It includes funds like private equity funds and debt funds.

Category III

These funds work for short-terms gains and operate without any government concession. Hedge funds are included in this category.

Alternative Investment Funds in India:

Alternative Investment Fund or AIF in India are defined as any fund established or incorporated in India, that is a privately pooled investment vehicle, and collects funds from cultured investors (both Indian or foreign), in order to invest it in accordance with a defined investment strategy for the profit of the investors.

In India, the SEBI’s Alternative Investment Funds Regulations 2012 controls the working of Alternate Investment Funds. Accordingly, there are nine different kinds of alternative investment funds in India, which include:

Venture Capital Funds

Private Investment in Public Equity Funds

Private Equity Funds

Debt Funds

Infrastructure Equity Funds

Real Estate Funds

SME Funds

Social Venture Funds

Strategy Funds (It includes all other varieties of the funds like the Hedge Funds)

The government of India has planned to encourage foreign Investment in Alternative Investment Funds in India by dropping foreign direct fund (FDI) and Foreign Portfolio Investors (FPI).

There are many benefits of investing in Investment alternatives; Investment in AIFs allows the country to treat foreign money as the domestic capital. This allows a fresh surge of foreign money in India that gives a boost to the other investments of the country. Long term investment in AIFs can result into accelerated growth of the investors. In fact, the domestic investors of AIFs also get a better return on their investment.

Investments in Alternative Funds in India have doubled in the past one year in India and many economists predict the steady growth of the same, in the future.

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Summary: One of the many key drivers for the growth of the Indian economy is the infrastructural sector, yet there is a great scope for reform and growth that could prove beneficial for the growth of trade, business, and GDP. For the suitable development of the country, there is a grave need for investment in the development of a strong infrastructure.

What are Infrastructure companies?

Infrastructure Finance Companies are non-banking financial institution engaged predominantly in funding infrastructure projects. The credit services offered by these companies to the borrowers are in specific infrastructure sectors such as Transport, Energy, Water, Communication, Healthcare, and Commercial. This finance can in turn help in building the infrastructural framework of the country, which can give a boost to trade, businesses and thus promote the growth of the economy.

Infrastructure Companies in India

Infrastructure plays a key role in the development of any country. Thus, these companies offer financial products and services for clients involved in development and construction, promoting the development of diverse structures. The RBI has a strict guideline for these companies in India,

As per RBI, any NBF Company can be registered as an Indian Infrastructure Finance Company, when meeting with the following terms,

The entity must be a non-deposit accepting loan company.

A minimum 75% of the total assets of the company should be deployed in the infrastructure loans.

The infrastructure company must have a minimum net worth of Rs 300 Crore.

The CRAR (capital to risk weighted asset ratio) of the company should be at 15% with Tier-I capital at 10%.

The company should have a credit rating of at least “A” or equivalent.

All Infrastructure finance companies must be advocated by the Statutory Auditor’s Certificate which is an approval of the company’s latest annual pattern of assets.

Services Offered by IFCs

Today, with the fast development of the infrastructure in India, there is a great need for an influx of investments in the infrastructure sector. These NBF companies provide developers with the much-needed funds to finance operations while maintaining a competitive cost of funds. Few vital services Infrastructure companies offer,

Infrastructure Equipment Finance: Offering leasing and purchase of construction equipment & machinery required for the fulfillment of various construction projects. These types of equipment include bulldozers, cranes, excavators, and much more, which require a huge investment.

Project Finance: Comprehensive financial solutions for Infrastructure Projects such include Debt, Equity and Mezzanine Capital, together with expert advisory services. Some reputable companies also provide comprehensive solutions including Debt Syndication, Private Equity & M&A Advisory for their valuable clients involved in the infrastructure sector.

These finance companies pave the way for the growth and development of the country through the availability of bespoke financial and advisory services. Author Bio:

Summary: The article discusses the concept of investment banking and evaluates the services offered by investment banks. Moreover, provides a brief overview on how to choose the right investment banking firm.

What is Investment Banking?

Investment banking is a special sector of banking that assists individuals and organisations by providing them financial consultancy services. These organisations act as mediators between security issuers and investors, buy or sell shares on behalf of the issuer, taking a commission on each transaction.

In other words, we can say investment bankers are agents of the capital markets. To acquire, or sell assets (stocks/ bonds) through IPO or bond offerings, these bankers have the right know-how and provide their customers with the right guidance to the viability and due process.

What are Investment Banking Services?

It is a highly complex financial mechanism in the banking world. These enterprises offer many different investment banking services to assist affluent individuals, companies, and governments in raising capital by underwriting or acting as an agent in the issuance of securities. These banking firms may also provide assistance to companies regarding mergers and acquisitions and the market & trading of various securities. Primary Services:       

Corporate finance         

M&A         

Equity research         

Sales & trading 

Asset management

Investment banks earn by charging fees and commissions for the offered services and advice.

A brief overview of the important investment banking services,

M&A Transactions:These banking firms play an important role from the idea of acquisition to the final deal closure.  When an investor or seller contemplates a purchase, the board of directors typically form a special committee to evaluate the proposal and retains an investment bank advice and evaluate the terms along with the price.

Debt Syndication:  Investment banks assist the client in acquiring financing for the deal. A syndicated loan is a credit offered by a group of creditors, referred to as a syndicate, who come together to offer funds to a single borrower.

Raise Capital: Investment banks help their valuable clients raise money through debt and equity offerings, which includes help raise fund through Initial Public Offerings (IPOs), credit facilities via banks, sell shares to investors over private placements, and issue and sell bonds on behalf of the client. The investment banking firm acts as a mediator between investors and the firm, earning revenue through advisory fees.

How to evaluate the best investment banks in India?

There are numerous investment banks in India, however on what grounds should one select an investment banking firm. However, when referring the best investment banks in India, one can measure them by deal volume or capital raised.

Investment bankers are typically categorised into two groups: product and industry specific.  There are namely three most common product groups are mergers and acquisitions (M&A), restructuring, and leveraged finance. Such groups offer investment banking services such as syndicated finance, equity, restructuring finance, high yield bonds, etc.  Investment Bankers have product specific knowledge and execute transactions for the product in numerous different industries.  

Industry bankers usually do more marketing for common industry groups such as Consumer & Retail, Utilities, Financial Institutions, Healthcare, and so on. However, one should evaluate the investment banking firms based on their individual or company needs.

Choosing an investment bank with the right qualification and experience relevant to the desired transaction, to represent a company is vital to a successful outcome.

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