INDUSTRIAL FINANCE IN

INDIA
ASHWINI METKARI
M.COM –I
ROLL NO:9015
 INTRODUCTION
 Finance is considered as the life-force of industry.
 Without adequate finance industrial development
is not at all possible.
 the lack of adequate finance may hinders
industrial development in India.
Industries require both short term, medium term
and long term finance for meeting their
requirements of fixed capital expenditure and also
to meet their working capital needs.
 DEFINITION
 Describing a company or economy that
engages largely or exclusively in the
manufacture of products.
An industrial company, for example, makes a
good, which it then sells either to retailers or
directly to consumers.
TYPES OF INDUSTRIAL FINANCE
SHORT TERM:-LESS THAN ONE YEAR.

 MEDIUM TERM:-MORE THAN ONE YEAR BUT LESS THAN FIVE

YEAR.

 LONG TERM:-MORE THAN FIVE YEAR.

 SOURCES OF INDUSTRIAL FINANCES
Shares & debentures

Public deposit

 Commercial banks

 Term landing institutions ( ICICI, IFCI, SIDC)

 Retained profits
 Shares & debentures
 Indian industries are normally raising a major
portion of their capital by selling shares in low
denominations of Rs. 10 each. Share may be a
preference share or an ordinary share.
 Debentures are also issued in the capital
market by the companies and in recent years
convertible debentures are gradually
becoming more popular.
 PUBLIC DEPOSIT
Another source of industrial finance is the
deposit raised from the public.

For example, Ahmedabad textile industry was

primarily established on the basis of public
deposit. Besides, Cotton Mills of Mumbai and
Sholapur. Tea Gardens of Assam and Bengal
have also raised their fixed capital in sufficient
quantity through public deposit.
 COMMERCIAL BANKS
 Commercial banks are also offering short-term loans
on cash credit basis on the security of stock and on the
additional guarantee of the managing agent.
 The commercial banks are generally advancing loan
for meeting working capital needs of the industries in
the form of advancing loan, overdraft, and cash credit
facilities against government securities and pledge of
stocks. Commercial Banks, nowadays, have been
advancing medium term loan to the industries
particularly since the establishment of IDBI.
 TERM LENDING INSTITUTION
They have been developed to advance loan in order to meet
financial requirement of these industries.
These institutions include Industrial Finance Corporation of
India (IFCI), Industrial Credit and Investment Corporation
of India (ICICI), Industrial Development Bank of India
(IDBI), (IRCI), State Financial Corporations and State
Industrial Development Corporations (in different states).
Besides,-Life Insurance Corporation of India (LICI) and Unit
Trust of India are also providing a good amount of loan to
Indian industries and emerged as a most important source of
industrial finance in recent years.
 NEED FOR INDUSTRIAL FINANCE
STARTING BUSSINESS.
RUNNING OF BUSSINESS.
EXPANDING BUSSINESS.
REAEARCH AND DEVELOPMENT.
REPLACE THE MACHINE EQUIPMENT .
THANK YOU