Indian Texpreneurs Federation (ITF), Brickwork Ratings (BWR) & Bombay Stock Exchange (BSE) conducted a one-day session on “India CXO Forum” on Capital and Credit risks at Hotel Le Meridien in Coimbatore recently.
The session discussed about the impact of macro and micro risks impacting various sectors and in particular discussed about the capital market trends in India. BSE shared its views on access to equity markets and latest trends seen with the respect to capital raising activities. BWR shared it views on credit environment in the economy and the trends seen in the debt market.
The session had an agenda with the welcome note of Prabhu Dhamodharan, Convenor , Indian Texpreneurs Federation (ITF); Macro credit outlook and trends topic by Rajat Bahl, Chief Analytical officer, Brickwork ratings; Value creation through public issue topic addressed by Manu Thomas, DGM- Listing BSE; SME Funding- Role of Capital market by Anand Chari, DGM, SME, BSE; Capital market outlook and update by Satish Nair, Director, Brickwork ratings; Managing the cotton and currency risk with BSE futures by TG Senthilvelan, BSE AD DGM and the session had a Question and answer session too after the event.
Value creation for companies by accessing equity & debt markets
India has a vibrant equity & debt market, where companies have been raising funds to fulfill their business and capital expansion plans. For any Company, going to a public issue is a strategic and critical source of public fundraising for the expansion of business & to achieve the next level of growth. Companies raise debt to support long-term and short-term capital requirements through various borrowing programs including debentures, commercial papers, bank loans and other hybrid instruments.
For many reasons, accessing capital market has undoubtedly become the next natural milestone for Indian Companies. Advantages of undertaking an IPO include access to capital for growth and expansion, liquidity and exit route for existing investors, branding, trust building event and higher level of governance. While there are numerous advantages to going public, there are also a few considerations that the company, its management and shareholders should evaluate prior to embarking on the IPO process.
The interaction in this event had empowered the participants with actionable skills that can be immediately put into practice. There was a discussion on various trends seen in the economy, share sectoral credit outlook and trends seen in the capital and loan market. Also, this event provided necessary know-how for a successful IPO planning to maximize the value creation for stakeholders.
ITF, as a textile industry association trying to create awareness and also handhold the member companies regarding the financial aspects of business including advising mills on financial metrics, quarterly comparison of financials of various segments of industry, hand holding mills to improve the credit ratings, supporting companies to engage in a better way with bankers. In this process, ITF trying to help highly rated member companies to try alternate finance options like Commercial Paper (CP) for short term funds and also encouraging the members to list the companies to create long term wealth. As per our estimates, at least 15 mid corporates in the region with excellent manufacturing capabilities, better sustainability practices, brand positioning can go for IPO and top 12 companies easily can create Rs 10,000 to Rs 12,000 cr market capitalization with conservative PE valuations.
In this regard, BSE team presented practical case studies of successful companies who raised funds with IPO and also, discussed on hedging through exchange to offset the risk of any adverse price movements, be it cotton (or) currencies. Brickwork Ratings updated on most recent regulatory development for issuance of debt instruments in India and will emphasize the need of credit ratings as a barometer for understanding credit risk better and why issuers (companies) should get rated.