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Investors can raise a substantial portion of the
project cost in India through debt and equity instruments.
Applications for long term loans can be made to State Financial
Corporations when the project is small - generally less than Rs.50
million - or to national level financial institutions, such as IDBI and
IFCI, when the project is large. Institutions expect concrete project
and market reports, with reasonably firm costs and implementation plans.
Other long term financing options include leasing, hire purchase,
deferred payment guarantee, etc.
Capital markets are increasingly the preferred route for raising
finances in India, through equity shares, debentures and hybrids.
Investors can freely access the capital market and in most cases freely
price the issue. Investors with both small as well as large fund
requirements can mobilise funds from the market. Private placement with
institutional investors is also possible. Indian companies also have the
option of raising funds from international capital markets.
Short term finances for working capital requirements are available from
commercial banks and through instruments such as fixed deposits,
inter-corporate deposits and commercial paper.
