Under Promoter Funding facility the promoters of listed companies can pledge their shares to to get loans to meet their fund requirements. Promoter loans against shares is an instant line of credit and interest is charged only on the amount utilized. Another benefit of loan against shares is that owners do not have to liquidate their holdings to meet short-term cash requirements. The facility is increasingly used by promoters to hike their stake via the creeping acquisition route, convert outstanding warrants into equity shares, buy out other investors/ PE funds, meet company’s short term borrowing requirements etc. Continue reading Promoter Share Pledging for Business Loans Financing
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Participatory Notes (P-Notes) For India Foreign Institutional Investors
Participatory notes (PNs / P-Notes) are instruments used by foreign investors that are not registered with the SEBI (Securities & Exchange Board of India) to invest in Indian securities. Participatory notes are instruments that derive their value from an underlying financial instrument such as an equity share (derivative instruments). SEBI permitted FIIs to register and participate in the Indian stock market in 1992.
Indian based brokerages buy Indian-based securities and then issue PNs to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors. Continue reading Participatory Notes (P-Notes) For India Foreign Institutional Investors