Project Appraisal and Finance

Program Credit : PGPM : 3 Class of Sessions : 2012 : 30

Course Code : SL FI 610

Objective
The objective of the course is to inculcate in the students the expertise required for formulating project ideas and projecting cash flows as well as evaluation of project proposals prepared by others. REFERENCE BOOKS Projects : Planning, Analysis, Selection, Financing, Implementation & Review Project Financing: asset based financial engineering, 2nd e Project Financing Modern Project Finance: A Casebook Guidelines on Project Appraisal AUTHOR / PUBLICATION Prasana Chandra - TMH Finnerty, John D. John Wiley & sons Inc - 2007 Nevitt, Peter K / Fabozzi, Frank J. Euromoney Books Esty, Benjamin. John Wiley & Sons, Inc. 2003 Sen, Dasgupta, Mirlees - UNIDO

Detailed Syllabus Overview of Project Finance: introduction to project finance, project life cycle and its impact on feasibility, facets of project analysis, capital budgeting and common weaknesses.

Financial Estimates and Projections: cost of the project, means of finance, estimation of W.C. profitability estimates, balance sheet projections, projections of sources and uses of funds.

Project Identification & Resources Allocation : The importance of a Proper Allocation of Resources , Process Allocation at the Corporate Level, Process Of resource at the Business Unit Level, Generation Of Project Ideas and Creativity, Managerial assessment.- entrepreneur/ corporate Appraisal. Market and Demand Analysis: Identification of the Target Market , Choice of the Market Strategy , Projection Of Demand using Primary Data and Secondary Data, Projection of Demand using Qualitative models

Valuing Project :- Project Cash Flow , Apprizing Project at Discounting & non Discounting criteria Social Cost benefit analysis: Rationale, different approaches to SCBA, shadow prices, SCBA by financial institutions, public sector investments in India Environmental Appraisal of projects: meaning of environment and pollution, methods of preventing pollution, pollution created by different industries, regulations and environmental impact on assessment of projects.

Technical Analysis: Selection of appropriate technology, acquisition of technology, choice of good location of the project, design of the layout of facilities at project site.

Risk Analysis in Capital Investment Decisions: What is Risk, Types of Risks, Measurement of Risk, and Method of Incorporating Risk into Capital Budgeting,

Suggested Schedule of Sessions Multiple Projects and constraints: Conflicts in Ranking of Projects by Different Criteria, Resolution of the Conflict in Ranking, Techniques for selection of more than One Project from a Group. Valuation of real options: how options work, Binomial, Black Scholes models, types of real options, Strategy as a portfolio of real options. Managing Project Risk: How risk management creates value in project finance. Financing of Projects: Menu of financing, capital structure, debt capital, debentures, bonds, TLs, WC advances, equity and preference capital, project financing structures. Financing Infrastructure Projects: typical project configuration, Key parties, project contracts, financial structure and corporate governance, financing power, telecommunication projects, PPP in project financing Topic 1 Overview of Project Finance: 2 Project Identification & Resources Allocation Managerial Appraisal : 3 Market and Demand Analysis: 4 Technical Analysis: 5 Financial Estimates and Projections: 6 Valuing Project :6.1 Project Cash Flow 6.2 Apprizing Project at Discounting & non Discounting criteria 7 Social Cost benefit analysis: 8 Environmental Appraisal of projects: 9 Risk Analysis in Capital Investment Decisions 10 Multiple Projects and constraints: Case Studies 1. 2. 3. ADANI POWER PRIVATE LIMITED LUCKNOW SITAPUR EXPRESSWAYS Ltd. KAKINADA SEAPORTS LTD. Etc. 11 Valuation of real options: 12 Managing Project Risk 13 Financing of Projects: 14 Financing Infrastructure Projects Total 2 2 3 2 2 2 2 3 30 No. of Sessions 2 1 2 2 2 3