In India many companies form Mergers and Acquisitions. We have heard of these terms and also seen many examples. But for the common man, it is hard to understand the meaning of two companies coming together in Merger or acquisitions and the differences between the same. As an investor it is very important to understand its effects on the company or whether to invest in the newly formed company or not. For companies that have been incurring losses, a financial bank can help in asset reconstruction and evaluation of the company’s status with experts. How does Asset Reconstruction actually help to form Mergers and Acquisitions running parallel to the M & A Advisory firms? How does an M & A Advisory firm help a company merge with or acquire another? All these questions have simple answers for the layman.
Asset Reconstruction Company is often the Non Banking Financial companies that help in the process of corporate debt reconstructing for companies that suffer huge losses. On the verge of shutting down, a company may be willing to survive as a part of some Merger and acquisition companies, and employ a financial institution like JM Financials to use their experience and expertise to revaluate and reconstruct the assets and debts of the company as well as invite merger or acquisitions from willing companies. It is then that the financial institution acts upon and takes help from an M & A advisory firm. The work of the M & A advisory firm is to suggest as to whether the company should go for mergers or acquisition wherein it will lose its identity. In simple words, Merger means the partnership of two companies while Acquisition leads to acquiring of a company by another. This is a concept not clear to many but one that must be understood. Corporate debt reconstruction refers to a non statutory mechanism under which financial institutions and client companies come together to reconstruct the debts of the company facing financial difficulties due to many influenced, direct, indirect, internal and external factors. Asset Reconstruction, on the other hand, refers to handling of distressed assets in an attempt to recover their values. Asset Reconstruction Company takes in to consideration the equity research reports, stock research and fundamental analysis of the company over a period of time to help companies survive and be a part of Merger and acquisition companies.
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Asset Reconstruction: Crucial need of Fundamental Analysis of a company and M & A Advisory Firms8/9/2017 Asset reconstruction is an essential part of a company’s financial advisory department. Asset Reconstruction refers to handling of distressed assets in an attempt to recover their values. In short, after analyzing the annual reports, and fundamental analysis of stocks and the Fundamental analysis of a company positions it seek help from a non banking financial institution like JM Financials to take decisions regarding Merger and acquisitions from M & A Advisory Firms.
The Fundamental Analysis of a company and the fundamental analysis of stocks in the company disposition after the final balance sheet is a very crucial and important step. The results of these two analyses often lead to decide if the company needs a Merger or Acquisition after taking expert opinion from M & A Advisory Firms. Mergers are when two separate companies merge in to a new identity company with no bad debt from its past individual companies. Mergers are often accelerated by M & A Advisory Firms or Non Banking Financial Institutions. Acquisitions however mean complete taking over of one company by another. The identity and books of the Inquisitor remains while the one acquisitioned is lost in identity. Subsequently the books of both the companies are merged together and so the company stock and assets are reconstructed wholly in to the new balance sheet. M & A Advisory Firms help in completing the legal and financial process of a merger or acquisition and also keep advising till the distressed asset values are recovered and the companies are satisfied. M & A Advisory Firms help in deciding over whether a company will go for a merger and acquisition based on the fundamental analysis of a company books and fundamental analysis of stock. Merger and acquisition in India are often initiated and carried out by Non Banking Financial Institutions like JM Financials that ultimately help in the growth and development of a business. Asset Reconstruction refers to handling of distressed assets in an attempt to recover their values. In short, after analyzing the annual equity research report, stock research report and industrial research report the financial advisors of the Company suggest measures for Asset Reconstruction methods.
Real Estate NBFC (Non Banking Financial Companies) like JM Finance, helps in Asset Reconstruction of Company in India. These NBFC aim at financial advisory and transactions, indirectly with no regular banking activities involved. Let us now find out what the reports actually mean and how they help in Asset Reconstruction.
When you invest your time and money into a startup organization, incurring a loss at some point is the harsh truth an individual needs to grasp and make peace with.
Your meticulously planned business may at times face a blow of great magnitude, where, recovery may be a debatable concept. The very real problems that close in on an unsuccessful business organization are:
Even the strongest of entrepreneurs are bound to balk under the pressure and quit. But facing a rough patch or hitting a road block doesn’t have to be an end game endeavor. It can easily be revamped to a momentary setback from which you rise to the occasion and perform some damage control. This damage control enforcer is called an asset reconstruction company. Asset reconstruction comes under the fundamental financial services proffered by investment banking firms and mergers and acquisition companies. Asset reconstruction companies are the link between a trust and a promoter. Companies, on the verge of bankruptcy, possess under performing assets that fail to curb the unsettled obligations. Asset reconstruction sine qua non includes making these assets profitable and helps provide a plausible solution to the debt accumulated. The ARC helps in the ridding the non performing asset acquisition to more worthy contenders from the troubled organization. The non-performing assets are given a revalued amount which is paid to the promoter (the organization in debt) by the trust (the more worthy competitor capable of up keeping the obligations) The backlog of NPAs can be relieved hence increasing the feasibility of incurring a profit by the unsuccessful business in question. The ARCs perform the following:
The ARCs also perform the following financial services which includes
JM Financial is one of the leading integrated finance service groups with over three decades of experience under its belt and a massively diverse clientele. Owing to these stellar credentials, asset reconstruction is performed with competent efficiency by this investment banking service. An Asset Reconstruction Company is a company which is registered under Section 3 of the Secularization and Reconstruction of Financial assets and Enforcement of Security Interest Act, 2002. These companies come under the jurisdiction of the Reserve Bank Of India as a Non-Banking Financial Company.
Most of the businesses in India are unsuccessful and close down due to the inability of the owners to deal with the financial pressures of the business. In these unsuccessful businesses, there is generally poor management or even sometimes mismanagement of the capital. Some of the other causes include pressure from banks, legal action and penalties. It is at this point that these businesses should take the help of asset reconstruction companies. One such prominent and highly skilled company is that of JM Financial. They offer their services in asset management and in alternative asset management. They help in the generation and development of both the existing assets and also further assets and convert them into profits for the company. These asset management companies in India lik JM Financial direct and oversee several forms of strategies which they device so as to enhance and develop a company’s assets and resources and to restore it to their former glory. The main goal of the asset reconstruction company, India is to oversee, strategies, enhance and develop assets of the company or business an do make them profitable in the long run. However, one of the demerits which these asset reconstruction companies face is the loss of income as they deal mostly with companies who are themselves facing losses in the business. But if they are able to reconstruct the company and restore them to their former glory, then they get to have a part of the profits. However, in order to be successful all the details and data of the stocks, bonds, profits and losses as well as management issues and the history of the country over the years are taken into consideration too before strategies and plans are worked upon. |
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