Investment Philosophy & Process

Page 1

Key success factors for credit investments in India

On ground presence to source, understand & manage credit, coupled with
processes and risk controls in line with international best practices

SOURCING
On-ground
On-ground presence
presence

Proprietary
Proprietary origination
origination

Established
Established

relationships
relationships
Local
Local networks
networks for
for deal
deal
and
and promoter
promoter
information
information
Understanding
Understanding of
of local
local
factors
factors

Page 2

UNDERWRITING
Local - cultural / business

Political
Political // other
other linkages
linkages
Legacy issues
issues
Legacy

Local - cultural / business

factors
factors

RISK MANAGEMENT

Active
Active monitoring
monitoring

Regional
Regional &
& local
local

regulations
regulations
Formal &
& informal
informal
Formal
reference
reference checks
checks

Constant
Constant direct
direct contact
contact

Lender
Lender community
community

Early
Early signs
signs
Use of
of local
Use
local legal
legal
framework
for
framework for active
active
management
management

Lender
Lender networks
networks

Investment Philosophy
Yield pick up obtained through (i) tightly covenanted and secured debt exposures
(ii) created through proprietary structured debt transactions (iii) of issuers with
established businesses and repayment track record, serviced by (iv) low downside
risk operating cash-flows
Business & Vintage

Established Businesses

Structuring & Covenants

Strong repayment track

DD

Monitoring & Risk

Collateral Options &

Covenants Monitoring

Structuring

Credit Monitoring

Ring-fencing

Market / Lender

Operating Covenants

Personal Guarantees

record

Strong growth potential

Low / Moderate Gearing

Financial Flexibility

Financial & Corporate

community news

Site visits,
management meetings

Page 3

Investment Process
Pro-active & selective origination, detailed due diligence & structuring combined
with close monitoring of investments to deliver superior returns on the debt
portfolio

1
Proprietary
deal flow
through
network of
extensive
relationship
s

Page 4

2
Detailed
Screening of
the deal and
Presentatio
n to
Investment
Committee

3
Transaction
Structuring
and
Preparation
and Signing
of the Term
Sheet

4
Detailed
financial,
legal and
technical
DD, Final
Approval
from IC

5
Signing of
Definitive
Agreements
and Closure
of the Deal

6
Day to Day
managemen
t of the
Project and
undertaking
the exit

Established Due Diligence Process

In-house analysis complemented with technical external inputs as
required
External Research

Past &
Future
Trends
Regulato
ry
Backdrop

Sector &
Business
Analysis

Demand
Supply
Dynami
cs
Collateral
Package
Empanelled legal &
technical agency
reports
Page 5

Promoter
& Mgmt
Backgrou
nd

Business
&
Promoter
Vintage

Financing
Terms &
Covenants
Operatin
g Plan

Rating Agency, Market

& Lender Checks
Busines
s&
Financi
al
Flows
Financi
al
Flexibil
ity and
Record

Covenan
ts &
Reps

Robust on-going monitoring & management

In-house Transaction Management for monitoring of all

covenants and milestones.
News alerts on all deals for live tracking.

Monthly Risk Management calls, periodic site visits,

management meetings, operating plan review.

Market feedback and report through internal and external

research.

Page 6

Dedicated 2-member monitoring team for each deal

comprising Origination and Risk resources.

Periodic management meeting with Managing Partners