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Infrastructure Funding India

India has the massive potential to become a global superpower, and this growth is supported by three major pillars. The first pillar is our young and dynamic population. The second pillar is the steadily rising income of our citizens. The third and most vital pillar is our rapidly improving national infrastructure.

There is a well known rule in economics that whenever and wherever you build a road, overall development follows it instantly. This happens because excellent infrastructure, including roads and highways, helps businesses move goods much better and faster. When products and services are easily available, it simplifies daily business operations for everyone.

In any successful industry, delivering your products and services on time is of utmost importance. Because of this, reliable infrastructure funding plays a crucial role in driving business growth across the entire Indian market. At Gain UP, we provide the financial backing needed to build these critical projects and keep India moving forward.

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Key Features of Infrastructure Funding

Starts from Rs. 100 lacs with no upper limit

Interest Rates Subject to the financial ratio

Simple terms and less paperwork

Flexible Loan repayment (up to 60 Months)

Infrastructure Sector

Infrastructure, that includes many vital services and not only just roads and bridges, is the foundation of our society. It encompasses primary industries which includes waste management, telecommunications, power and energy, water, and aviation, among others. Any business engaged in these sectors makes a direct or indirect contribution to the infrastructure industry.

Financial Backing for Infrastructure Projects

Funding is available for a wide array of infrastructure projects, including but not limited to:

  • Transmission, Electricity generation, and distribution, 
  • Oil and gas pipelines
  • Roads (HAM)
  • Bridges
  • Ports
  • Shipyards
  • Airports
  • Railway infrastructure
  • Solid waste management
  • Water treatment plants
  • Telecommunications, including telecommunication towers
  • Educational institutions
  • Hospitals
  • Affordable housing projects

Working Capital Needs in the Infrastructure Industry

The working capital requirements for companies in the infrastructure industry differ from other sectors due to high project costs and milestone-based payments from public and private customers.

A) When the company is working with the Government

The government is the biggest customer. It can float the tender directly or through a public entity. If it is government funding, the company may majorly need the working capital in the form of a Bank Guarantee, which forms part of the non-fund-based limit. At the time of taking the order from the government, the company needs to submit the BG and the government will start releasing the payment on a milestone basis.

B) When the company is working with Private Companies

The working capital cycle changes when the company is working with private companies. Here generally you do not need to submit the bank guarantee. You will need the CC facility or OD Facility to procure the material and pay for your labour. Generally, the payment gets released based on the milestones and is typically paid within 30-90 / 120 days as per the payment terms.

Impact of Infrastructure Funding

China’s much faster product delivery times stand out when comparing the two countries’ industrial sectors. China’s advanced infrastructure, which shortens delivery times and decreases material prices, is partly responsible for this efficiency. Shorter delivery times also enable firms to have low amounts of inventory. Thanks to advancements in infrastructure, several Indian businesses are already implementing a zero-inventory approach.

Debt Instruments for Infrastructure Companies

Multiple factors need to be considered while raising funds for the infrastructure companies. Below are a few of the standard debt instruments. However, getting tailor-made instruments is preferred.

1. Bank Guarantee
2. Cash Credit
3. Overdraft
4. Vendor Financing
5. Sales Invoice Discounting
6. Working Capital Term Loan
7. Working Capital Demand Loan
8. Dropline Overdraft.

Eligibility To Raise the Working Capital

There are different debt instruments. Each instrument has its criteria for raising the funds. Below are a few of the most important and preferred criteria –

  1.  Minimum 3 years of business vintage
  2. Good Credit score
  3.  Your operational location
  4.  Your last year’s sales and profit
  5.  Current Year Sales
  6. Current work order in hands
  7. Existing debt of the company and regular repayments
  8.  Indian Shareholding.

These are the few most important criteria. And others may vary from company to company.

Infrastructure Funding at Terkar Capital

If you use short-term funds for long-term uses and long-term funds for the short uses, both will harm your working capital. Choosing the right product for the right work order is important. At Terkar Capital, We always keep the client as a central part of the execution. We understand the client, know the balance sheet, work orders, and end use of the funds and then decide which debt instrument will be a better fit for you. We always believe that to achieve the lower cost of funds, the choice of the right debt instrument is very important.