Question

Pick any real world company that you've worked for or are interested in and write about what kinds of capital they have raised or are raising. USA company and orinigal post please.

Answer 1

I am going to list some of the funds that has been raised by a company called Srei Infrastructure based out of Kolkata, India. Before I mention about the funds raised, let me briefly explain the company. Srei Infrastructure Finance Limited is a leading infrastructure financing conglomerate in India. Srei, derived from the Hindi word ‘Shrey’ meaning 'merit' or 'credit', has completed a quarter of a century. In these 25 years, Srei has come a long way after starting perhaps in one of the most difficult and challenging times. In 1989, India had not opened up its economy, which during those times, was in doldrums. There was hardly any quality investment in infrastructure projects. Srei was born then, a child of a dream, with the aim to address two of the most critical problems in our country then – financing and infrastructure.

Some of the funds raised by Srei Infra are as follows:

1. Equity Shares: An equity share, commonly referred to as ordinary share also represents the form of fractional or part ownership in which a shareholder, as a fractional owner, undertakes the maximum entrepreneurial risk associated with a business venture. The holders of such shares are members of the company and have voting rights.The Company’s Equity Shares are listed on BSE Limited (BSE), National Stock Exchange of India Limited (NSE) and The Calcutta Stock Exchange Limited (CSE). The Company’s Equity Shares are frequently traded on NSE and BSE.The present Paid - up capital of the Company as on 30th September, 2016 is 50,30,86,333 Equity shares of Rs. 10/- each aggregating to Rs. 5,03,08,63,330/-.

2. Non Convertible Debentures: Non-Convertible Debenture is a financial instrument issued by Corporates for specified tenure to raise resources / funds through public issue or private placement. This debt instrument cannot be converted into equity. It is a fixed income instrument same as bank fixed deposit and can be traded on stock exchanges. Interest can be earned monthly / quarterly / annually / cumulative and on maturity principal amount is paid to the debenture holder.

3. Srei Tax Saving Infra Bonds: The Bonds have been classified as “Long Term Infrastructure Bonds” as per the terms of Section 80CCF of the Income Tax Act. As notified under Section 80CCF, an amount, not exceeding Rs 20,000 per annum, paid or deposited as subscription to Long Term Infrastructure Bonds during the previous year relevant to the assessment year beginning April 01, 2012, shall be deducted in computing the taxable income of a resident individual or HUF. In the event that any applicant applies for Bonds exceeding Rs 20,000 per annum, the aforesaid tax benefit shall be available to such applicant only to the extent of Rs 20,000 per annum. The funds raised through the issue of the Tranche 1 Bonds will be utilized towards “Infrastructure Lending” as defined by Reserve Bank of India (“the RBI”) in the Regulations issued by it from time to time, after meeting the expenditures of, and related to the Tranche 1 Issue. The Lead Managers to the Tranche 1 Issue are ICICI Securities Limited, Karvy Investor Services Limited, RR Investors Capital Services Private Limited and Srei Capital Markets Limited (a wholly owned subsidiary of the Company to be engaged only in marketing of the Tranche 1 Issue) The Co-Lead managers to the Issue are SMC Capitals Limited and Bajaj Capital Limited whilst Axis Trustee Services Limited is the Debenture Trustee to the Tranche 1 Issue.

The salient features of Srei Tax Saving Infra Bonds are as follows:

• Up to 9.15% p.a. annualised return
• Tax Benefit adjusted rate of return under buy-back options (with tax benefits) range from 11.29% to 19.33% p.a.