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What is the ROLE OF TEV STUDIES FOR BORROWERS AND BANKERS ?
WHAT IS THE MAIN ROLE OF TEV STUDIES FOR BORROWERS AND BANKERS ?
WHAT IS THE PREAMBLE ?
TEV STUDY IS AN IMPORTANT ASPAT FOR PROMOTERS OF THE PROJECT & bankers for taking credit decision for financing of particular project. The TEV study shall give a confirm idea to the promoter about the success of the project. At the same time gives a confidance to the bankers that the project is technically feasible, commercially & financially viable.
WHO CONDUCT TEV STUDY ?
The TEV study is conducted by an independent agency having subject experts depending on the nature of project. Usually financing banks ( financial institutions) have a panel of approved agencies for under taking TEV study of the cases under considerations for credit facilities mainly term loan, project finance or composite term loan comprising of term loan and working capital for one operating cycle. Just 4uloan.com facilitates conducting TEV studies for all kind of projects /loan proposals from the competent agencies approved by financing banks and financial institutions.just4uloan.com also provides complete eco system for success of the project as per risk analysis of the project taken up for syndication of bank finance under its investment banking activities.
WHAT ARE THE COMPONENT OF TEV STUDY ?
1. APRAISAL OF THE PROMOTERS
The assessment of the promoter is an important aspect of credit appraisal from the bankers point of view for the simple reason that the promoters are going to run the project. There for the TEV study includes personal and financial profile of the promoters. The personal profile assessment covered character ( Financial) capacity and competence of the promoters including resourcefulness , past trip record experience in the line of proposed business , financial support and stability , ability to arrange the finance from outside sources , family back ground , stake in other companies /firm as a director/partner/proprietor etc.
2. MANAGEMENT APRAISAL
It is well known fact that the competent management team comprising of experts of various
discipline of the project is the key for its success. The management team members should have sufficient experience in project implementation , production , marketing , human resource development and finance depending on the size of project in their respective discipline. The TEV study invariably covers existing and proposed organisational structure , profile of key personals with their designation and experience in particular area as per their job profile and their association with the promoters/company/firm etc .
3. TECHNICAL APRAISAL
Technical assessment covers study of suitable and latest technology adopted for the project or it requires change in the technology , suitability and adequacy of the proposed production process to generate the projected out put , project rationale , suitability of project location selection of plant and machinery based on latest technology , project implementation schedule and current status of project implementation etc.
5 MARKET ASSESSMENT AND FUTURE OUTLOOK
It involves study of demand and supply of the product and covers market size , future growth potential , past and expected trend of the consumers , competition scenario and future outlook of the product.
5 INDUSTRY ANALYSIS.
Industry analysis is very important aspect in TEV study. It involve comparison of key parameters of similar industries like products, operational and financial growth trends etc. It also covers geographical presence of different players in the similar line of activity.
6 FINANCIAL VIABILITY.
The financial viability of the project means the project should generate sufficient returns to repay the debt and yield desirable returns to the prompters/company during the life of the assets. Financial viability is assessed by examining capability of the project to generate sufficient profit, with achievable financial projections. It also have ratio analysis , working capital requirement, term loan requirement etc as integral part of judging financial viability of the project.
7 Sensitivity Analysis.
It analyse the impact of variation in key assumptions, like raw material prices, Selling prices etc on critical parameters and financial viability of the project.
8 SWOT ANALYSIS.
This is an important part of TEV studies. It analyse strength, Weakness, opportunities, and threat to the project.
9 Risk Analysis.
Risk analysis is done by identification of operational risk, market risk, Financial risk and risk in resource mobilization, project excecution in addition to regulatory and political risk. It also suggest measures to mitigate the identified risk.
10 Security.
It assess the security coverage by way of primary and collateral security available for lenders.
11 conclusion
After examining the above aspects, an opinion is formed about techno economic viability of the project.
