How can businesses raise time-sensitive capital while balancing growth, debt reduction, and control?
The client faced a convergence of strategic and financial pressures. Multiple product launches and plans to expand manufacturing capacity required immediate capital infusion, while significant high-cost debt constrained cash flows and financial flexibility. The proposed fundraise, approximately 1.75× of the previous year’s revenue, was both sizeable and time-critical, linked to domestic and international growth initiatives.
Stakeholder alignment further added complexity. Existing investors sought a structured exit, incoming investors required clarity on fund utilisation, particularly for repaying over INR 120 crore of high-cost debt, and promoters aimed to minimise equity dilution while retaining strategic control. Achieving consensus across these priorities within tight timelines was critical to transaction success.
Structuring a hybrid capital solution aligned to growth and control objectives
We acted as the exclusive advisor, serving as the central liaison to align promoters, exiting shareholders, and incoming investors throughout the transaction. We structured a hybrid funding solution using optionally convertible debentures (OCDs) to enable minimal promoter dilution, with future equity conversion linked to a one-year forward valuation multiple. Our team supported the entire due diligence process, including vendor diligence, and led negotiations on key commercial terms such as upside sharing and deferred consideration. Working closely with legal advisors, we ensured that definitive agreements reflected the seller’s strategic objectives and enabled seamless transaction execution within nine months of initiating discussions.
A resilient capital structure supporting growth and financial flexibility
Our approach enabled the client to raise funds quickly while maintaining promoter control and achieving financial flexibility. The transaction successfully balanced the expectations of existing and incoming investors, resulting in a well-structured capital solution. It addressed immediate high-cost debt repayment requirements while also providing capital to support future growth initiatives.
