(Company Name)

Brief background note on the activities of the

company and reason for applying for NBFC activities.
 NBFCs in a post-pandemic world

The declining trajectory of non-bank credit growth began in the second half of
2018-19 amidst the economic slowdown and continued in fiscal 2020 with the
onslaught of the pandemic. The gradual impact of the economic slowdown on the
sector was expected to enable defence mechanisms. But, the pandemic rendered
an immediate and debilitating impact.

In India, Non-Banking Financial Companies (NBFCs) have been playing an

increasingly crucial role by financing long term projects in core sectors, which
contribute to the nation’s development like real estate, housing, infrastructure
and allied industries.

NBFCs core strength includes customer base, strong distribution and servicing
reach, higher risk appetite, flexible business model, non- physical office based
points of presence, and lesser technology debt. NBFCs playing a crucial role in the
development of small and medium entrepreneurial sector by providing financial
and social help. To procure financial help from banks is too complex as it involves
more formalities. Therefore, NBFCs becoming a important part for those
unorganized sectors who cannot able to fulfill all the requirements of banks.
 NBFCs lending to MSME & Retail Sector

Micro, Small, and Medium Enterprises (MSMEs) play an important role in the overall
growth of the Indian economy and particularly, in equitable growth. According to data cited
by SIDBI in its FY2019 annual report, MSMEs have contributed approximately 31 per cent
to gross domestic product (GDP) in FY2018.

In India, Non-Banking Financial Companies (NBFCs) have been playing an increasingly

crucial role by financing long term projects in core sectors, which contribute to the nation’s
development like real estate, housing, infrastructure and allied industries. It is providing
assistance in making a country self- reliant.
Factors contributing to growth of NBFCs

 Stress on Public sector units (PSU)- Limits risk appetite of public sector banks in medium
term
 Indian economy has huge latent credit demand fueled by massive self employed population
that is underserved by banks due to inadequate income proof
 Digital disruption, especially for micro, small and medium enterprises (MSME) and small and
medium enterprises (SME)
 Increased Consumption while focusing on unorganized segments of the economy.
 Distribution of loans across several customer touch points with 24/7 sales and service.
Introduction: (Company Name)

 Company Finance Private Limited basically provides financial services to bridge the
capital requirements.

 Company classified as NBFC-ND, focusing on MSME Lending, working capital/

general business loans, vehicle loan requirements of MSME sector across states
namely Bihar, Jharkhand, Uttar Pradesh, Assam, Chhattisgarh and Madhya Pradesh.

 Company later plans to expand into Corporate lending in sectors related to

Hospitality, Healthcare & Education.

 Company envisages to contribute to the social, economic and entrepreneurial

resurgence of India. By this, it will strive to drive access to finance as a
means to enhance income, well- being and social status of entrepreneur
supported.
 Proposed Product Portfolio

Company intends to create a diversified product portfolio for various sectors.

MSME Lending Corporate Finance

Working Capital Mezzanine

FINANCING
WHOLESAL
FINANCING
RETAIL

General Business Loan Senior Lending

Vehicle Loan Acquisition Funding

Bill Discounting E Loan Against Shares

 Phase wise plan for NBFC expansion
Phase 1
MSME and Retail
Lending
MSME:
Loans for Business expansion, Short
term Business funding, Loans for
plant & Machinery, working capital
etc
Retail:
Personal Loans, Education loans,
Car and Two Wheeler loans etc
Avg loan Size for MEME and Retail:
INR 2 lakh to INR 25 lakh
Phase 2
General
Corporate
Lending
Lending across various sectors
mainly Hospitality, Healthcare,
Education, Infrastructure, Real
Estate (Residential and
Commercial),Services,
Entertainment etc.
Avg Loan Size: INR 25 Lakh to
INR 2 Cr and later increase the
ticket size to INR 1 Cr
 MSME, Retail Investment Strategy

Geographic
 6 States in India (Bihar, Jharkhand, Uttar Pradesh, Assam, Chhattisgarh and
Area
Madhya Pradesh)
Market
 Sectors focusing on MSME, Retail, SME.
Segment
Purpose of
 MSME: Business Expansion, Short Term Funding, Loans for Plant and
lending
Machinery and meeting Working Capital shortfalls
 Retail: Personal Loan, Loan Against Property/PF/Equity Share

Average Deal  INR 2 lakh to INR 25 lakh

Size
 Post dated cheque for repayments
Security
 Mortgage of Receivable/Inventory/Stock
Preferred Loan
 12 months to 48 months
Tenure
Rate of Interest
 20% - 26%
 Investment Strategy: Process
Deal Origination, Analysis and proposal to
1 Investment Committee
 Identifying the investment
opportunities as per the
defined investment
strategy
 First level analysis such as
financial valuation & feasibility
 Presenting a first level analysis to
the investment committee
 Conducting initial due-diligence
4 Investment Committee
Decisionand Deal Closure
 Due-Diligence report review
 Final review of the deal
structure
 Review Legal Documentation
 Negotiate the deal
 Liaising with Investors
Interim Investment
2 Committee approval
 Signing of term sheet by
investment committee
 Investment committee
comprises of management of
sponsors and representatives
of investors
5 Monitoring and Managing
the investment
 Regular site visit to ensure
the physical progress of the
project
 Monthly MIS report with regard
to Sales, Collections, Project and
Finance cost
 Ensure timely development of
asset within budgeted cost
Transaction Due-
3 Diligence
 Detailed due diligence: process
financial data, business plan,
estimate cash flows and
capital requirements, set
investment rationale, assess
key risks, formulate possible
exit strategies, outline budget
and time table for transaction
 Appoint third party consultants
6 Exit in
defined timeframe
 Investment exit in defined time-
frame with targeted return
 (Company Name)
5 Year Business Plan
 Company Name
5 YEAR PROJECTED GROWTH & OUTREACH
Operational Summary
PARTICULARS   Mar-21 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

No.Of States   - 2 5 6 6 6

No.Of Branches   - 4 7 9 12 18

No.Of Staff   - 16 28 36 48 72

No.Of Clients   - 240 765 1,575 2,835 4,995

Loan Disbursements Rs. in
(D.Year) Lakh - 1,823 7,650 12,825 20,160 31,680

LOAN DISBURSEMENTS Rs. in

(Cum) Lakh - 1,823 9,473 22,298 42,458 74,138

Total Loan Portfolio Rs. in

Lakh   1,463 6,162 11,681 19,146 30,580

Portfolio Growth Rate (%)   - 0% 321% 90% 64% 60%

Oper. Self Sufficiency (%)   - 80% 112% 120% 128% 129%

 Company Name
5 Year Projected Income & Expenditure
Amount in Rs. Lakh

PROFIT & LOSS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

INCOME          
Interest Income 143.49 1,019.77 2,208.18 3,794.73 6,042.24
Fee Income 27.34 114.75 192.38 302.40 475.20
Others Income including Interest on FD 5.85 15.25 35.69 53.95 87.02
Total Income 176.68 1,149.77 2,436.25 4,151.08 6,604.47
EXPENSES          
Financial expenses 108.56 667.32 1,208.73 1,932.03 3,045.51
Administrative expenses 29.26 76.25 178.44 231.21 372.95
Personnel expenses 58.53 152.51 356.88 539.49 870.23
Depreciation & Amortization 2.19 9.24 17.52 28.72 45.87
Provision for doubtful debts 21.95 70.49 82.79 111.97 171.51
Total Expenditure 220.49 975.82 1,844.36 2,843.43 4,506.07
Profit Before Tax (43.81) 173.96 591.89 1,307.65 2,098.40
Tax Expenses - 52.34 178.10 393.47 631.41
Profit After Tax (43.81) 121.62 413.79 914.18 1,466.99
Transfer to Statutory Reserve (8.76) 24.32 82.76 182.84 293.40
Transfer to General Reserve (35.05) 97.29 331.03 731.34 1,173.59
 Company Name
 
5 Year Projected Balance sheet

Amount in Rs. Lakh  

BALANCE SHEET Mar-20 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Liabilities            
Total Shareholders Equity 200.00 956.19 2077.81 3991.60 6905.78 11372.77
Share Capital 200.00 1000.00 2000.00 3500.00 5500.00 8500.00
Reserves and Surplus 0.00 -43.81 77.81 491.60 1405.78 2872.77
             
Loans funds 0.00 775.42 4766.60 9297.89 14861.79 23426.96
             
Current Liabilities & Provisions            
Current Liabilities 0.00 58.53 152.51 356.88 462.42 745.91
Loan Loss Provision/Reserves 0.00 21.95 92.43 175.23 287.20 458.71

Total Liabilities 200.00 1812.09 7089.35 13821.59 22517.19 36004.35

 Company Name
5 Year Projected Balance sheet

Amount in Rs. Lakh  

ASSETS Mar-20 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
FIXED ASSETS            

Gross Block 0.00 14.63 61.62 116.82 191.46 305.81

Depreciation & Amortization 0.00 2.19 11.44 28.96 57.68 103.55
Net Block 0.00 12.44 50.18 87.86 133.78 202.26
             
Loans & Advances   1463.13 6162.25 11681.68 19146.45 30580.74
             
Current Assets            
Cash and Cash Equivalents 200.00 117.05 305.02 713.76 1078.98 1740.45
Cash and Cash Equivalents (Lien FDs) 0.00 146.31 381.27 892.20 1541.41 2486.36
Other Current Assets 0.00 73.16 190.63 446.10 616.56 994.54
             
Total Assets 200.00 1812.09 7089.35 13821.59 22517.19 36004.35
 Company Name
5 YEAR PROJECTED GROWTH & OUTREACH

Ratio Analysis

Key Ratios YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Capital Adequacy Ratio

62.2% 32.7% 32.9% 34.9% 36.0%
 

Debt Equity Ratio 77.5% 238.3% 265.7% 270.2% 275.6%

Total Yield on Portfolio (Avg.)

9.8% 26.7% 24.7% 24.6% 24.3%
 
Funding Expenses Ratio (Avg. Loan
14.0% 24.1% 17.2% 16.0% 15.9%
Funds)
Operating Expenses Ratio (Avg. 12.3% 6.2% 6.2% 5.2% 5.2%
Portfolio)

Operational Self Sufficiency 80.1% 111.8% 120.5% 128.2% 128.6%

Return on Assets (Avg.) -2.4% 2.7% 4.0% 5.0% 5.0%

Return on Equity (Avg. Net worth) -9.2% 8.0% 13.6% 16.8% 16.1%
 Company Name
5 Year Projected Cash flow Statement

Cash Flow
Amount in Rs. Lakh
PARTICULARS Mar-21 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Cash inflows            

Opening Balance - 200.00 117.05 305.02 713.76 1,078.98

Income from Operation - 170.83 1,134.52 2,400.56 4,097.13 6,517.44

Other Income/Interest on Investments - 5.85 15.25 35.69 53.95 87.02

Loan Recoveries - 359.45 2,951.16 7,305.84 12695.50 20245.99

Borrowings from Banks - 1000.00 5,000.00 6,500.00 8,500.00 13500.00

Equity Investment 200.00 800.00 1,000.00 1,500.00 2,000.00 3,000.00

- 80.47 164.47 287.16 217.52 455.00

Increase in other Current Liabilities
200.00 2616.60 10382.45 18334.26 28277.85 44884.44
Total
 Company Name
5 Year Projected Cash flow Statement

Cash Flow
Amount in Rs. Lakh
Particulars Mar-21 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Cash Outflows            
Loan Disbursements - 1822.50 7650.00 12825.00 20160.00 31680.00
Loan repayment to banks - 246.60 1,079.58 2,051.78 3,048.33 5,106.62
Personnel Expenses - 58.53 152.51 356.88 539.49 870.23
Administrative Expenses - 29.26 76.25 178.44 231.21 372.95
Fixed Assets Purchased - 14.63 46.99 55.19 74.65 114.34
Financial Cost - 108.56 667.32 1,208.73 1,932.03 3,045.51
Increase in C.Assets /Other L&A - 219.47 352.43 766.39 819.67 1,322.93
Income Tax Paid - - 52.34 178.10 393.47 631.41
Closing Balance 200.00 117.05 305.02 713.76 1,078.98 1,740.45
Total 200.00 2616.60 10382.45 18334.26 28277.85 44884.44
 Mar-21 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Net Cash Flow:
Inflow of funds 200.00 1616.60 5382.45 11834.26 19777.85 31384.44

Outflow of funds 0.00 2499.55 10077.44 17620.50 27198.87 43143.99

Closing Balance to be maintained 200.00 117.05 305.02 713.76 1078.98 1740.45

 Company Name
5 YEAR BUSINESS PLAN

Funds Requirement

Rs. In Lakh

PARTICULARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

REVOLVING LOAN FUNDS 1,000 5,000 6,500 8,500 13,500

CAPITAL REQUIRED 800 1,000 1,500 2,000 3,000

TOTAL FUNDS REQUIRED 1,800 6,000 8,000 10,500 16,500