CaseStudy-01

Case Study - 01

Industry
Activity
About the Company Challenges Faced by the Company
Transaction Target
VGro Assignment
Result
Summary of the Transaction

Industry

A Leading South Based EPC / Infrastructure company

Activity

Civil Engineering / Irrigation

About the Company

The company belongs to a prominent group in South India diversified into a multi-disciplinary business entity with interests in health (Institute of Medical Sciences & Hospital), energy (Elgen Project), infrastructure (Infra), manufacturing, telecom, entertainment, and hospitality sectors.

It is a more than 30-year-old company, with a group revenue of more than ₹2,000 Crore and 4000+ employees, managed by a professional team. The flagship company is involved in civil engineering/infrastructure for state and central government-funded projects.

Challenges Faced by the Company

The company had been enjoying credit facilities under a sole banking arrangement amounting to ₹200 Cr for more than a decade but was facing challenges in enhancing it further due to the single borrower exposure policy guidelines of the bank. As a result, the company was securing high-value projects by depositing a 100% cash margin as co- secured large value contracts, falling substantially short of limits.

Transaction Target

To facilitate financial tie-up for the flagship company, we aim to bring in new lenders under a multiple banking arrangement by establishing general or project-specific limits with improved sanction terms compared to the existing lender.

VGro Assignment

Analyzing the company's profile and financial model of the projects, covering the period of the contracts, we aim to finalize the appropriate structure of the transaction. Additionally, we study the present market scenario and plan the fundraising process accordingly. We assist in finalizing the term sheet for the transaction after discussions with the lenders and the client.

Result

VGRO managed to onboard a leading bank and secured the sanction with a combination of general and project-specific limits amounting to ₹250.00 Crore. This has enabled the company to obtain the release of the 100% cash margin and receive advances (with and without interest) from respective departments by issuing mobilization advance bank guarantees. VGRO has also assisted in planning the cash flows of the projects.

Summary of the Transaction

Timely syndication of WC Limits of Rs. 250 crores by VGRO from a leading bank for an EPC/Infrastructure company of a leading business conglomerate from South India for the execution of a major civil contract from Central/State Govt. VGRO professionally handled various issues during the execution of the mandate. The induction of a new banker has helped the company reduce the 100% cash margin and ensure timely availability of limits to execute the project successfully. This is a testimony to the expertise of the VGRO team in handling the EPC/Infrastructure sector.

Case Study

CASE STUDY 1

VGRO facilitated the procurement of ₹250 Crore in working capital limits from a leading bank for a renowned South Indian conglomerate's civil engineering firm, unlocking cash margins and ensuring seamless project execution for government contracts.

CASE STUDY 2

VGro facilitated the transition of a 50-year-old EPC company from sole to multiple banking arrangements, securing over ₹650 Crore in working capital limits and an "A" credit rating, enabling participation in high-value projects and projecting revenues of ₹1,400 Crore in FY25.

CASE STUDY 3

VGro facilitated the transformation of a 15-year-old family-run civil contracting firm, led by two brothers and partners, from low-value projects to high-value endeavors by securing project- specific working capital limits and subsequently amplifying them to ₹60 crore, catalyzing a revenue surge to ₹200+ Crore in FY24.

CASE STUDY 4

VGro facilitated the gradual reduction of limits with the existing lender, enabling the release of collaterals for new lenders, ultimately onboarding four lenders, including private and PSU banks, to secure higher limits and SBLC facilities for a 30-year- old civil contracting company.

CASE STUDY 5

VGro facilitated the onboarding of banking channels without collateral security for a 30-year leader in auto finance, securing ₹25 crore limits from a private and PSU lender. This assistance led a 40+ year-old NBFC to double its AUM from ₹48+ crore to ₹100+ crore by resolving overdue/security issues and obtaining facilities from both private and PSU bankers.

CASE STUDY 6

VGro facilitated structured finance of over 100 Crore for a startup warehouse construction company, leveraging the promoter's real estate expertise, without requiring collateral. Through strategic planning and research, VGro secured initial disbursement of ₹30 Crore, enabling progress toward the project's completion.

CASE STUDY 7

VGRO facilitated fund acquisition under MBA, enabling a leading system integrator to reduce banking costs and collateral requirements. By closing the Consortium limit and transitioning to MBA, the company achieved lower interest rates, decreased BG margins, and improved ROE, while completing security perfection and reducing interest burden.

CASE STUDY 8

VGRO facilitated funds for a leading psychiatric hospital's expansion from 67 to 180 beds, overcoming challenges of non-conventional industry and new lender reluctance. Additionally, VGRO assisted in securing margin money for the promoter individually, after a two- year pursuit for project funding.

CASE STUDY 9

VGRO facilitated reduced BG margin from 25% to 15% and collateral coverage from 50% to 35% for a civil construction company, saving nearly 5 Crores in BG margin while reducing ROI and BG commission. Despite a 15-month struggle for additional working capital, VGRO enabled smoother project execution, alleviating cash crunch concerns.