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PROJECT FINANCEPROJECT FINANCE

By: Prof. Rashmi Narayanswamy

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Recession sparks soul-searching at

biz schools (TOI dt 16/09/09) Business students now dont just want to learn how to

maximize profit for shareholders and themselves

Instead many talk about sustainability, ethical leadership

and managing companies for the benefit of allstakeholders

Growing interest in the non-profit sector, govt. andentrepreneurship among MBA students

The financial crisis is going to be so deeply associated withthe new generation, that it will put a sense ofresponsibility on the future business leaders

Hence, the need or the emphasis of Project Finance inyour curriculum

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Objective of Project Finance Strategic fit of a project is a must condition for a project

to get going

Understanding risk involved in a project Design of a proper project require sound knowledge and

skills

A large firm needs to organize its project activitiesthrough a suitable administrative set-up

Project Finance is essential to executives who have a sayin the selection of projects and development of the firms'capital budget

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Organization of the Course Basic concepts and the importance of the subject

Planning phase of Capital Budgeting, models and thecapital allocation strategy

Estimation of the Cost of Project

How to Finance? - various sources, financing ofInfrastructure projects, venture capital and privateequity

Risk Analysis a basic study of the risk factors Analysis market and demand

Evaluation of the project

Implementation of the project

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What you can expect from thiscourse?

Learn to develop a strategy that leads to sustainablecompetitive advantage

Sharpen your ability to identify promising investmentopportunities

Learn to formulate the project, considering the inter-relationships among various aspects

Able to forecast realistically the incremental cash flows

attributable to the project Calculate the net present value of the project and value

the real options

Choose a financing structure that lowers the cost ofcapital and preserves financial flexibility

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Books Referred:- Projects- Planning, Analysis, Selection, Financing,Implementation and Review by Prasanna Chandra

Corporate Finance by Aswath Damodaran Corporate Finance by Ross, Westerfield and Jaffe

Financial Management by Prasanna Chandra

Financial Management- Theory, Concepts and

Problems by R. P. Rustagi Fundamentals of Financial Management by James C.

Van Horne, John M. Wachowicz Jr., Saumitra N.Bhaduri

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Pedagogy PPT presentations

Journals and Articles a study thereof

Case study methodology

Group discussions

Numerical problem solving for analytical solutions

Paper presentations by students

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Evaluation criteria

Presentations - 10%

Surprise quizzes - 20%

Midterm - 20%

End Term Test - 40%

Assignments - 10%

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Real life, real case: Anjana Ghosh has

created a new identity for Bisleri A graduate ofS.P. Jain Institute of Bombay, Anjana

chose Project Planning to major in

Ghosh was primarily responsible for bringing innovationto the brand and strategizing the re-engineering ofBisleri from blue to green

After brand re-engineering, the new and young image ofa vibrant Bisleri ensured that the companys sales

zoomed ahead by almost 60% Under her stewardship, Bisleri has touched a record

sale ofone crore cases in 2008-09 in Mumbai, thehighest by any bottled water brand in one city

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BusinessI

ndia -S

ept 20, 2009