Interests: Joint Venture Investment Proposal. Purposes for Establishing a JV.
- Leveraging business Resource.
- Exploiting Capabilities and Expertise.
- Sharing Liabilities and Responsibilities.
- Market Access.
- Flexible Business Diversification.
Contributions by incoming JV Partner.
- To look after / Enhance cash flow of manufacturer by way of bridging the working capital gap.
- To avail the funds to meet the working capital for new orders, production, salary, miscellaneous payouts, and admin cost etc.
- To reduce the finance cost thereby increasing profitability.
- To infuse investment and optimize operating cycle, reduce working capital loans or bank borrowings in future to help SME entrepreneur to reduce collateral pledge or mortgage against high-interest debts.
- Manufacturer’s core competency is making his products whereas this joint venture allows him to limit his exposure, just to sales and focus its resources using the prompt manufacturing methods which will increase productivity.
- Manufacturer hand-overs all worries to joint partner to deal with customers, shipping or transportation or customs issues, handling the trade-related laws etc.
- Provide Access to new Markets and sale product.
- optimize funds flow without repayment interest and deadlines headaches.
- Profits will be shared by 50-50 in-between SME Manufacturer and incoming JV partner.
Expenses of the venture.
- All expenses incurred by the SME manufacturer while a business operation like Raw material purchases, interest, salaries, admin cost etc. during the period of the Venture, be paid by the Joint Venturer on demand.
Joint Venture Term.
- 3 years from effective date.
Target joint venture business sector.
-Purely in the manufacturing sector of specialty chemicals, pharmaceutical, textile, garment.
Target business enterprise.
- Only SME having a top line of Rs. 100cr and below.
- SSI or SME exporter or domestic player.
Joint venture Investment Criteria.
- The manufacturer must not be a bank defaulter.
- Healthy EBITDA above 25%
- There must be creditworthy customers.
- SME, MSME and SSI units are preferred.
- Topline must be below 100cr.
- Product must be regular demand in nature.
- SME / MSME must agree to share 50:50 profit ratio.
Joint Investment size.
- Mini 5 – 10crs per MSME company (exposure is revolving in nature) * no. of the trade cycle.
- Investment exposure level will be decided based on the monthly working capital needs of each company.
Background: We are into three business verticals i. e pharmaceuticals, Chemicals and Garment & apparel based in Mumbai with global presence.
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