Capex recovery not fully reflected in bank credit growth

What is Leverage and how does it impact company valuation? Leverage refers to the use of fixed costs, either operating (fixed operating expenses) or financial (interest expenses), to magnify the effect of changes in revenue on profitability and returns to equity holders. Let’s break it down with an example: --> Company A: 80% Equity, 20% Debt --> Company B: 60% Equity, 40% Debt Company A relies more on equity, which is considered an expensive source of capital. Why? Because payments to equity holders (dividends, buybacks, capital gains) are not tax-deductible. On the other hand, interest paid on debt is tax-deductible, which reduces the effective cost of debt. This is why, holding everything else constant, Company B, by using a higher proportion of debt, could achieve a lower Weighted Average Cost of Capital (WACC) compared to Company A. A lower WACC translates to a higher valuation, as future cash flows are discounted at a lower rate. 👉 But there’s a catch: leverage adds value only up to an optimal point. Beyond that, excessive debt increases financial risk, raises the cost of equity, and eventually pushes WACC higher—destroying firm value instead of creating it. In short, the right balance of leverage can be a powerful tool to maximise shareholder value, but the wrong balance can erode it just as quickly. #Valuation #InvestmentBanking #PrivateEquity #Finance #WACC #CorporateFinance #FinancialModeling #IB #PE #BusinessValuation #Linkedin #CFA Parth Verma

Accurately valuing debt investments is more complex than ever — and getting it right is essential for compliance, transparency and investor confidence. Noam Hirschberger, CFA, Victor Peña, CPA, CGMA and Shalini Chandran, FRM outline key steps debt fund managers can take to strengthen their valuation process — from establishing robust policies and assessing collateral to managing risk and addressing non-performing loans. Read the full article here: https://bit.ly/3KDpbZd #PKFOD #KnowGreaterValue #DebtValuation

#PIMCO is right—Asset-Based Finance is reshaping private credit. Park Street Global extends that evolution cross-border, connecting international capital to U.S. ABF portfolios through regulated, tax-efficient note structures. #ABF #PrivateCredit #FixedIncome #GlobalCapital

Not all bonds are backed by collateral. Some rely solely on trust. That’s the case with debentures — a type of debt instrument supported only by the issuer’s creditworthiness and reputation. Companies and governments often use debentures to raise capital, and investors weigh the higher risk against the potential reward. Wondering how debentures work, and how they compare to other bonds? Here’s the full explainer: 🔗 https://lnkd.in/gCg7UQCv

https://lnkd.in/g_9B945a 💡 What drives investor decisions in Private Equity? One of the most important metrics is IRR – Internal Rate of Return. IRR measures the annualized return of an investment, while also factoring in the timing of cash flows. 👉 The faster the money is returned to investors, the higher the IRR. For example: $1M grows to $2M in 3 years = High IRR 🚀 $1M grows to $2M in 7 years = Much lower IRR 📉 That’s why IRR is a key benchmark to evaluate fund performance.

First Capital Floats Rs. 3 Bn Debenture Issue [Financial Sector] 📈 First Capital Holdings PLC has received in-principle approval from the CSE to issue debentures to raise up to Rs. 3 billion. • The issue comprises 10 Mn listed, rated, senior unsecured redeemable five-year Debentures at Rs. 100 each in the first tranche, aiming to raise Rs. 1 Bn. • Two further tranches will be offered if the initial tranche is oversubscribed, allowing for a maximum raise of Rs. 3 Bn. • The five-year bonds come in three categories: • Type A: 𝟏𝟏% 𝐩.𝐚. fixed coupon (annual payment). • Type B: 𝟏𝟎.𝟕𝟏% 𝐩.𝐚. fixed coupon (semi-annual payment). • Type C: Floating rate (364-day Treasury Bill + 2% p.a., re-priced annually). • The subscription list for the debentures opens next Tuesday, 23 September. Visit: https://lnkd.in/gm2SpCHC

Weighted Average Cost of Capital, or WACC, is simply the average rate a company pays to use money from both its owners and lenders. In our previous posts we saw, how the risk-free rate is like the safety baseline, how investors expect extra return for taking risks (that’s the equity premium), and how Beta tells us how much a stock moves with the market. Then there’s the cost of debt, the real price a company pays to borrow. WACC brings all these together and tells a company the minimum return it needs to earn on its investments to keep everyone happy- owners and lenders. Understanding WACC is key: it helps us figure out if a project or a company will truly grow value or just break even. Simple, practical, and essential knowledge for anyone serious about finance and valuation. Do share your inputs. Thanks for reading! #finance #valuation #linkedin Parth Verma

Fitch Ratings has released its final Feeder Fund Debt Rating Criteria, following feedback on the June 2025 Exposure Draft. The criteria set out how Fitch assigns and monitors credit ratings for debt issued by feeder funds that invest in one or more main funds. The methodology applies where Fitch can assess underlying cash flows primarily using sector-specific criteria. Eligible underlying assets include credit portfolios and non-credit assets such as diversified portfolios of alternative investment fund stakes, among others. View the final criteria: https://ow.ly/e00B50X2eJm #FitchRatings #FeederFunds #FundFinance #PrivateCredit

Capital isn’t free – it comes with a cost. 📊 WACC (Weighted Average Cost of Capital) is the benchmark that decides whether your business creates value or destroys it." In simple terms: Debt is cheaper but risky. Equity is costly but gives strength. WACC = True hurdle rate for every investment decision. 👉 Always remember: If ROI > WACC → You’re creating wealth. If ROI < WACC → You’re burning it. #Finance #Investment #Valuation #WACC #FinancialModeling #CorporateFinance #Investing #WealthCreation #CapitalMarkets #CA #Valuation #BusinessValuation #EquityResearch #FinancialModelling #InvestmentBanking #CorporateFinance #ValuationAnalysis #ValuationExperts #ValuationInsights #ValuationTraining #DCFValuation #ValuationMatters #ValuationSkills #StartupValuation #ValuationTools #FinancialValuation #ValuationLearning #ValuationJourney #ValuationCaseStudy #ValuationCommunity #ParthVerma #TheValuationSchool #DAY10

What is top of mind for the world’s leading private equity managers in 2025? FCM’s latest Private Equity Survey indicates higher deal volumes in 2025, supported by improved debt financing and fiercer competition for high-quality assets. Access the full survey here: https://lnkd.in/eF26fr7M #privateequity #PEMarket #FCMPESurvey2025