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Showing posts with the label Holding Company

Pros and Cons of investing in Holding Companies: The PE Perspective

Darius Pandole, Partner at PE Firm New Silk Route, has an article in Business Standard on the topic. Extracts: The +ves: Secondly, it can assist in raising capital based on the consolidated financial strength of its subsidiaries, which otherwise could be difficult for each individual subsidiary company. Flexibility to reorganize and structure finances is also available for individual businesses. Another key advantage of a holding company structure is that while it allows investment in multiple businesses under one parent company, it also ringfences each business from the risks of the other, by preventing the business performance of one business from affecting the performance and valuation of another.For investors, this offers the option to gain an exposure to any preferred business along with the flexibility to structure the investment (as debt, equity etc.) to meet their investment objectives. The -ves: As per the regulatory framework in India, holding companie...