Investment Valuation in India

When the two of the 10 richest people joined hands to start The Giving Pledge, they had a tough time convincing billionaires across the world to contribute most of their wealth for philanthropic causes. The Indian government took a leaf out of the concept and made it mandatory for specific class of companies to ensure they spend on Corporate Social Responsibility (CSR) through the new Companies Bill that has been passed in the Lok Sabha in November 2012. Although some European countries require companies to report their CSR information in their Annual Reports, India is arguably the only country in the world that has made CSR mandatory through an Act. What is CSR? CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members who may also be considered as stakeholders. A firm's implementation of CSR may go b...

One of the most important aspect of starting your own firm is to have enough funds to finance the business. You may not always have the capital to start a business, but fortunately there are other alternatives to finance the business. Loans from Banks / NBFCs Most banks and non banking finance companies (NBFCs) provide loans to small and medium enterprises (SMEs). The tenure ranges from 6 months to 5 years while the interest rates range between 10% and 15%. In most cases, banks and NBFCs expect you to show continuity of the business for a couple of years before funding it. Venture Debt Venture Debts are medium term loans offered by venture capital firms and do not require collateral. A start up is evaluated based on its ability to grow, fundamental enterprise value. The venture capital firms peg the value of the firm to its future cash flows and the ability to repay the loans. Leverage is not a great way to start a business so this option is better avoided or should be consid...