A growing organisation requires continuous infusion of capital as fuel to power its growth. Large corporations typically lean on debt products from various banking and non-banking financial institutions. Today, advanced debt products are available to corporates from Banks and NBFCs. These products offer high degree of flexibility in terms of various collateral structures and repayment (interest and principle) schedules. While these complexities offer tremendous flexibility in terms of access to timely capital, they also require continuous tracking and management to adhere to the terms and conditions of the loan agreement.
There are extensive and time sensitive reporting requirements for listed organisations with respect to borrowings. These organisations have to do mandatory report to Various third parties like the regulator (SEBI) and the various exchanges (BSE and NSE). Timely and accurate reporting in the required format is critical for the existing operation to persist and thrive. All of which requires seamless flow of information to appropriate stakeholders in the organisation. Most organisations currently have highly people dependent and manual processes of tracking, management and reporting which are highly susceptible to error and lack efficiency.
Compliance with borrowing covenants
Most corporate loan against securities come with complex structures, repayment schedules and conditions. A typical large corporate may have tens of loans from multiple financial institutions. As a result, the corporate finance and treasury team will end up dealing with a few hundred covenants spread across hundreds if not thousands of spreadsheets, which may not have adequate controls and version management. Manual nature of the process induces opportunities of poor quality, inaccuracy, inefficiency and delayed reporting. This potentially results in degraded credit ratings, unfavourable interest rates and reduced borrowing capabilities.
Strategic Financial Planning
Corporations constantly need fund infusion for managing their growth. Mostly these requirements are funded via short and medium term debt route. Generally, most organisations manually manage their loan life cycles in spreadsheets, which are integrated and interlinked for easy consolidation and reporting. As a result, organisations lack the insight into their borrowing limits and loan eligibility.
Tactical Cash Flow Planning
Delayed loan repayments directly affect organisation’s credit ratings and future borrowing capabilities. Organisations typically track loan repayment schedule in spreadsheets which do not provide the required intelligence which is critical in terms of providing timely information to support key decisions. This results in higher cost of borrowing resulting in loss of price competitiveness in their respective markets.
Avantis understands that lack of automation in these processes can result in sub-optimal performance. As a result, we have developed a solution which automates complete life cycle of all your corporate loans specially your loans against securities. The solution empowers your corporate finance and treasury departments with accurate, timely and actionable information to make effective borrowing decisions. The solution is web based with rich user interface, role based entitlements, workflow automation, advanced reporting and document management capabilities.
Define group companies with all its subsidiaries, promoters and shareholding pattern which brings uniformity to all your categories.
Define loans with parameters such as Rate of Interest, Security Cover, Type and Tenure, Interest and Principle repayment schedules, Ratings etc.
Define various demat accounts with corresponding depository participant (DPs) and holdings (of various scrips) in each account.
Define immovable assets such as property types (land, building etc), type of Mortgage (registered / equitable), Type of charges (Exclusive, First Pari Passu, Second Pari Passu etc), market value etc.
Define various pledges for the loans in terms of securities with parameters such as Demat Accounts along with corresponding depository participant (DPs), Pledge Types, Security coverage etc.
Define various triggers / thresholds where actions are required to be taken such as top-ups, top-downs, put/call, cash top-ups, mandatory redemptions, debt borrowing cap, pledge cap, maturity etc.