Is Debt Syndication the Way Forward for Borrowers availing Large Ticket Loans?

Is Debt Syndication the Way Forward for Borrowers availing Large Ticket Loans?

July 06, 2019 Admin
Resurgent IndiaMerchant BankingInvestment BankingCorporate LendingFunding SolutionsDebt SyndicationPrivate EquityFinancial Consultant

Money can be pumped into the system by broadly two modes. One is, by giving up equity/ownership stake in exchange of money and the other being debt. When large entities require funds towards expansion and other business activities, the most feasible option is fund-raising through debt.

Is Debt Syndication the Way Forward for Borrowers availing Large Ticket Loans?

Would you as a lender leverage out all your funds into a single multi-crore deal? The chances are slim though, wherein the lenders would rather diversify their portfolio and in turn, team up along with multiple lenders to form a consortium. Large ticket loan deals are a great proposition in terms of returns. However, the risk attached with them is proportionately higher. To safeguard their interests, lenders often form a consortium or ‘syndicate’, and proceed with funding viable projects. Hence debt-syndication seemed the way forward. Lenders throughout history have practiced this norm. This practice gained momentum in our scenario sometime in post the millennium.

 

Banks too, have formed syndicates and leverage out the risks and rewards attached with the large ticket loans amongst their contemporaries. A lead bank, heading the dais takes charge of the disbursal and due diligence. This entire process, of encapsulating multiple lenders into forming a syndicate and for disbursing a large ticket loan is referred to as Debt Syndication.

 

In recent times, BIAL (Bengaluru International Airport Limited) is looking for a syndicated loan of INR 10200 cr for expansion purposes. Also, names such as Airtel and Adani have availed similar loans previously, indicating the growing earnestness regarding the same.

 

We, at Resurgent India have facilitated more than 350+ loans under the syndication route and are committed towards solving all your expansion plans. Do write to us at contact@resurgentindia.com with your proposal and we are confident towards helping you achieve unscalable heights!

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