Changing the capital structure through change in debt and equity content. Indian companies looking at raising capital to support their expansion plans have to optimize their capital structure. The preferred mode of raising money is the FCCB’s route, which is considered cost effective, and also less time consuming.
Indian companies in this fiscal may well cross $15 billion or about Rs. 67,500 crores. That would be $2.5 billion more than the previous year.

Improved cash flows using leveraged buyouts specially management buyout of companies, asset security, lease financing and better management of working capital.

Corporate debt restructuring: Settlement with creditors through write offs / rescheduling of principal or interest component of debt. The CDR mechanism in India is based on the guideline issued by RBI, first in August 2001 and revised on February 5, 2003.

The portfolio restructuring is more dynamic and requires more planning and strategizing. It includes the booming mergers and acquisitions activity happening in Indian corporate world, divestment and disposal of unprofitable operations to help concentrate on core activities, spin offs again undertaken to streamline the operations and of course the outsourcing activity.

With the integration of world economies, companies are in a position to tap a wider market worldwide for which they take the organic or inorganic route. Portfolio restructuring through M&A activity has been the most sought after inorganic route as it delivers quick results. Global M&A increased by 38% for the year 2005, recording approximately $2.9 tn. India too saw M&A activity hit a record high of an estimated figure of more than $13 bn in 2005. A lot of FDI has gone into buying Indian assets and creating additional manufacturing capacity.

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* Contributed by: -
Aadarsh Himmatramka, an M.Com. from Mumbai University, worked as Marketing Asst. with Pentafab Textiles Pvt. Ltd. for a year and is currently a student of PGP1 at BIM, Trichy,
Article published in KRIYA, March 2006 Issue, BIM's monthly magazine.