INDIA INC.

USING CP FOR WORKING CAPITAL NEEDS : YES

BANK

Senior group president RAJAT MONGA said that

India Inc. is meeting its rising working capital

requirement through COMMERCIAL PAPER and
not going to BANKS.
Base rate of commercial banks ranges between 10%
and 10.25% whereas corporate raises 3 month
money @ 8.5% through CP.

FACTS AND FIGURES

AMOUNT INVESTED
4
3
2

1.62

1
0

AMOUNT INVESTED

2.9

CP

BANKS

INDIA has been growing @ 5%

during last two fiscal year
RBI sets to achieve INDIA GDP
growth @5.5% in 2015.

Why CP ?
It is quick and cost effective way of raising working capital.

Best way to the company to take the advantage of short term interest fluctuations in the market
It provides the exit option to the investors to quit the investment.

They are cheaper than a bank loan.

As commercial papers are required to be rated, good rating reduces the cost of capital for the

company.

It is unsecured and thus does not create any liens on assets of the company.

WHY NOT BANK LOANS ?

Lengthy application process
Preference given to existing, running businesses
Long list of prerequisites to qualify for the loan
Risk of losing Collateral
Entire amount not granted

THANK
YOU