syndication opportunities and road project financing

7/29/2019 Syndication Opportunities and Road Project Financing

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SYNDICATION OPPORTUNITIES ANDROAD PROJECT FINANCING

PRASHANT GHARAT

ROLL NO. 17


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Industrial Development Bank of India

IDBI Bank Ltd. (IDBI) is today one of India's largest commercial Banks

since last 40 years.

IDBI Bank Limited is an India-based commercial bank. The Bank operates in three

segments wholesale banking, retail banking and treasury services.

As on March 31, 2012, the Bank had a network of 973 Branches and 1542 ATMs.

The Bank, besides its core banking and project finance domain, has a presence inassociated financial sector businesses like capital market, investment banking and

mutual fund business.

Corporate office in Mumbai,


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IDBI Bank offers a wide collection of products and servicesto its customers. For different customer groups and needs,there are different types of products and services including

Personal Banking

Corporate Banking

SME Finance and

Agri Business etc.

Products and Services


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OBJECTIVES

PRIMARY OBJECTIVE

Overview of syndication loan in the debt financing.

The Role of syndication & term loan syndication

To identify loan syndication process and its major participation in bank.

SECONDARY OBJECTIVE

To identify issues involved and opportunities in Road Project Financing.

The role of Infrastructure financing in development of different sectors especially on road

financing.

RESEARCH METHODOLOGY

Given the objectives of the projects the following Research Methodology was adopted:

Interaction with the project guide and key officials in the Syndication, Structuring and

Advisory Department.

Articles from Infrastructure magazines.

Desk research,

Internal circulars/ guidelines

Library Research

LIMITATIONS

The nature of the project involves in-depth study under all dimensions of Road Project

financing; which in itself is a vast specialized field of study, and 8 weeks of study limited this

study to an overview of the Road Project Financing.


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INTRODUCTION

OVERALL SYNDICATION

The purpose of this note is to provide guidance on various aspects of asyndicated loan transaction, focusing on the following:

The type of borrowing facilities commonly seen in a syndicated loanagreement;

A description of the parties to a syndicated loan agreement and anexplanation of their role;

A brief explanation of the documentation entered into by the parties;

The time line for a typical syndicated loan transaction; and

A description of the common methods used by lenders to transfersyndicated loan participations.


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OPPORTUNITIES IN ROAD SECTOR

NHAI plans to award about 3,000 kms of highway projects on OMT basis.

Government of India planning a greenfield National Expressway grid of

approximately 18,000 km.

Expected investment of approximately USD 40 Billion in State Highways in

12th Five Year Plan

(2012-17).

Gujarat alone plans to develop more than 45,000 km of highway by 2020.


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OVERVIEW OF THE BIDDING PROCESS

Types of Projects NHAI undertakes

1. Build Operate and Transfer (BOT)

2. Externally Aided Projects

3. NHAI funded Projects

Request for Qualifications (RFQ)

Concession Agreement?


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ROADAND HIGHWAYS (INVESTMENT)

Investment on roads and highways to increase over the next 5 years,

led by government momentum to the roads and highways sector

National highways drive increase in overall investments of Rs. 6.3

trillion over 2012-13 to 2016-17

Private participation in state roads is expected to gradually increase

over the next 5 years (between 2012-13 and 2016-17).


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RISEINOVERALLINVESTMENTINROADSSECTOR

(RS.BILLION)

2007-08 to 2011-12 2012-13 to 2016-17

6,342

3,393


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OVERALL CONCLUSION

Debt syndication is the important sourceof financing for the company. As India isgrowing its economy is booming it

needs a good support from its banks sothat the money can be utilizedeffectively for the development of thecountry.

Infrastructure plays an important role indevelopment of any economy.


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Debt syndication is an effective lending product for a

bank and institutions which diversifies the risk of projectfunding and stand for the government norms and also

helps the project in developing by giving end to end

services.

All the above information I had to conclude that NHAI

forecasting Investment in road sector over next 5 years

and the overall bidding process and various road sectorsare include in road project financing.


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syndication opportunities and road project financing

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