Promoters often face many strategically important financial conundrums
Why Strategic Financial Advisory?
Funds Required ?
- Whether to raise debt or equity for the next growth phase?
- If equity, whether to go for IPO, QIP, preferential issue, rights issue?
- Or Private Equity, Structured Finance or Strategic investor?
- If debt, whether to go for bank loans, NBFC funding, or institutional alternatives investors?
- Whether to raise all capital at once, or do it in planned way over time? If latter, what should be the fund raising roadmap?
Corporate Structure ?
- How to balance between maximizing promoters stake and managing business risk?
- What should be the corporate structure? Which businesses to house in same/separate companies?
- What will be the strategic direction for each business within the group? To get a equity partner? To go public/PE? To get a strategic partner? Or to increase promoters stake?
- And when should any of these be done?
Multiple Proposals ?
- We have three different proposals from three different advisors. Each is recommending his proposal and finally asking us – please let us know what do you want? How do we go about deciding what is best for us and why?
Strategic M&A ?
- Whether to encourage an approach made by a strategic party? Whether to proactively build an ecosystem for a strategic transaction in the future? If so, in which businesses and when is the right time?
- Someone has approached us to invest/take over their business? Is it the right thing to do? Is it too risky or are there ways to manage the risk? How should we structure the transaction to optimize capital and risk? How should we evaluate the ask price and what should we pay for the business? What yardstick should we use to determine that we are not overpaying?
- What do we do to grow inorganically? We want to acquire competencies in areas we are absent/weak in? We want to go to new geographies? We will like to add new customer logos? Do we go about proactively or reactively?
Need fresh Perspectives ?
- We are so focused on our business that we really need an outside-in perspective on our business and related matters from someone who is experienced and also understands our business?
The above and many more such whats, whys, whens and hows are inevitably faced by promoters of sizeable and scaling businesses.
In many situations, the above questions get addressed by friends with financial background over a cup of coffee based on limited facts/analysis at their disposal. (Read more about Strategic Financial Advisory)