CaseStudy-03

Case Study - 03

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

Industry

Services [EPC Contractor]

Activity

Civil Construction

About the Company

The partnership firm, which is over 15 years old, is managed by two brothers and their family partners. The company is engaged in civil contracting for State and Central Government projects, with a revenue of less than ₹50 crore during FY 18-19.

Challenges Faced by the Company

The firm was enjoying WC limits of less than ₹20 crore under a sole banking arrangement with exclusive 100% plus security cover, along with high pricing and margin.

Transaction Target

To scale up the firm to the next level.

VGro Assignment

Financial tie-up for these projects in the form of structured project term loan.

Result

VGro implemented the strategy to obtain project- specific limits with reduced security cover, pricing, and margin. Based on the firm's financial requirements, assessed project-specific limits of ₹30+ crore for three projects and secured the sanction within a short span of time from a private bank.

The firm aimed to move up to the next level as they were only undertaking low-value projects. With the project-specific limits in place, after a year or so, VGro once again collaborated with the firm and opted to take over the project-specific limits and enhance them by 100% with the available security. This target was achieved within 2 months, and the sanction of ₹60+ crore limit in the general line was secured by taking over the existing facility.

Summary of the Transaction

Leveraging the relationship with Banks, VGro assisted a family-run business engaged in civil contracts to obtain project-specific WC limits while optimizing collateral security. Furthermore, VGro supported the firm's efforts to expand with high-value civil projects by securing an enhancement of WC limits to ₹60 crore within a short span of time.

Now, the firm's revenue in the last financial year, FY24, is ₹200+ Crore.

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.