John owns a chain of sugar factories in Maharashtra named ‘JB Sugar Production Private Limited. His business has been doing well with a turnover of Rs. 4500 crores this year. He started the manufacturing unit in 2015. As his business is growing, he has realized some issues which he is facing in the sugar industry.
The sugar industry is one of the most capital-intensive industries. It is with a huge amount of capital involved to start and run the sugar factories. The turnaround time for sugarcane to cash is also very high. Therefore, one of the foremost issues John is facing is financing sugar mills. The time gap between the production of sugar and the selling of sugar to the market is also very high. Most of the time the sale of sugar is controlled by the government. John’s sugar factories have sugar stock that is worth crores of rupees. But this stock is basically just idle unless it gets converted to capital.
| Company Turnover | Rs. 4500 Crores |
| Amount Required | Rs. 350 Crores |
| Mortgage Availability | Sugar Stock |
| Company Industry | Sugar Manufacturing |
After listening to John’s business situation, we suggested a sugar pledge loan to him. The process of a sugar pledge loan is an efficient way to raise capital funding. In a Sugar Pledge Loan, sugar factories get the required funds against sugar as a pledge. So, this option is very convenient for sugar factories because they generally have huge stocks of sugar that are idle. Taking a pledge loan for sugar mills against that sugar is thus a good option.
At first, we explained the entire sugar mill loan procedure to John and then helped John execute the end-to-end process. After the registration of the application at the respective financial institution, the application was considered by the sub-committee and the standing committee. The advice and opinion of the standing committee were processed further for the approval of the government. Thus, the loans for sugar industries were disbursed in two instalments after John complied with the conditions mentioned in the approval. Sometimes the amount of funds is so huge, that it cannot be funded by a single financial institution. It needs multiple banking institutions and arrangements for the consortium. Thus, we suggest to our clients whether the required amount can go in a single stand or if there is a need to arrange a cartel pool regarding the arrangement of the amount.
| Business Commencement Year | 2015 |
| Amount of Funding | Rs. 350 Crores |
| Total Execution Time | 7 Working Days. |
| Customer Service Experience | 4.3/5 |
With Terkar Capital’s assistance, John got his funding at the minimum rate of interest available in the market within 7 working days from the date he approached us. Since then Terkar Capital has been the preferred corporate debt fundraising partner for Mr. John and his company.
John, the owner of ‘JB Sugar Production Private Limited,’ has been facing challenges in the sugar industry despite his successful business. The industry’s high capital requirements and lengthy turnaround time have made it difficult for him to secure financing for his sugar mills. Additionally, the government’s control over sugar sales has resulted in idle sugar stock worth crores of rupees. Seeking financial advice, John approached Terkar Capital, which recommended a sugar pledge loan as a viable solution. Terkar Capital guided John through the loan process, including application registration, committee evaluations, and government approval.
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