Overview of Cavalry Advisors LLP
- Cavalry Advisors LLP (Cavalry) has been formed with a purpose to enable the Banks and Financial Institutions on its lending decisions.
- A Techno-economic feasibility study aims to objectively and rationally uncover the strength and weaknesses of an existing business or proposed venture, opportunities and threats present in the environment, the resources required to carry through and ultimately the prospects for success.
- Banks and Financial institutions require monitoring and an independent review of the progress of the sanctioned projects. Cavalry undertakes such studies to independently review the progress of the project and put forward a comprehensive analysis.
- A knowledgeable, involved and neutral Lender Engineer can bring tangible and definite advantages that go beyond the stamp of approval. The benefits of such an LE’s services in terms of project monitoring are, in fact, not limited to providing security to lending institutions – they are also an important component of risk management and value addions.
- The purpose of the study conducted by cavalry is to provide utility for sanctioning decision to conclude at an informed judgement as regards acceptance of the project for lending (or investment) purpose and its monitoring thereafter.
- We at Cavalry ensure encompassing the evaluation of a project as per the systematic procedure for weaving the technical and financial information about the project, with relevant data about its technological and economic environment, into one or a few criteria which forms one of the basis for recommendation, selection, modification or rejection of a project.
TEV Studies – Viability of Projects
- Cavalry employs a four-dimensional approach to projects/start-ups as shown below:
- Cavalry adopts a rigorous risk assessment process in arriving at the final conclusion on the viability of the project that considers macro – economic analysis, industry/commercial assessment, strategic analysis, technical evaluation and financial feasibility.
- Cavalry conducts multiple rounds of interview with the promoter, management, technical and project team to verify and understand various aspects of the proposed venture.
- The LLP draws on the expertise of independent experts who have had extensive operational and strategic experience in different industries in understanding current industry dynamics and future trends. This helps Cavalry analysts vet the assumptions made by the project sponsor regarding the project’s outlook.
- Our technical & financial experts visit the site to understand the important and related parameters, i.e. Adequacy of the plot, availability of support infrastructure at site, facility evaluation, Rail/Road connectivity, other social infrastructure etc.
- Our team carries out the benchmarking process by analyzing extensive industry-specific data and by consulting industry experts to vet the project cost and to gauge various operating norms required to assess the financial viability of the project.
- Our assessment is a culmination of the extensive research and assessment carried out by the analyst and approved by the review committee.
- Our opinion on a project’s risk is of the consolidated opinion gathered from fragmented SBU expertise and not of a particular analyst. This is done to remove individual bias.
Scope of Activity
Broad aspects covered while preparing a TEV Report
Management Evaluation
- Promoter’s experience assessment.
- Experience and capability assessment of key persons proposed to handle the project.
Strategic analysis
- Location analysis.
- SWOT.
- Risk analysis & mitigation.
Commercial Viability
- Market Analysis.
- Demand and supply analysis.
- Local demand assessment.
- Competitive analysis.
Financial evaluation & analysis
- Vetting of the project cost.
- Assessment of proposed means of finance.
- Economic analysis – estimation of revenue, fixed cost & variable cost.
- Assessment of projected financial statement.
- Estimation of project indicators – IRR, DSCR, etc.
- Sensitivity analysis.
Technical Feasibility
- Evaluation of Technology.
- Assessment of processes.
- Appropriateness of machineries (if any).
- Assessment of other input in terms of requirement and availability.
- Assessment of utility requirement.
- Infrastructure assessment in terms of land, buildings, utilities, etc.
- Assessment of Manpower planning.
- Quality control measures adopted.
- Assessment of Implementation Schedule.
Process Overflow
Project plan documents
(project rationale, project details, company overview, management details, etc.
Annual reports of the last 3 years of the company.
Financial model(in excel sheets duly formulas linked).
Implementation schedule showing various activities.
Current status of the proposed project in terms of expenses and physical progress.
Sale deeds of land.
Location map with details of connectivity.
List of statutory compliances needs to be fulfilled with the schedule of completion.
Technical aspects
Site layout with the demarcation of land allotted for the project.
List of machineries with specification.
Licenses and agreements for technology & machinery etc, if any.
Quotation or purchase order, if any, for machineries.
Approved building plan with area calculation.
A detailed estimate of civil work example: RCC structure in cubic meters and rate considered. (Bill of Quantity).
Various utilities like water, power, etc. required for the project, arrangement proposed for the same and status of application made to various concern departments, if any.
Manpower required for the project with cost, classification (technical, administration, etc. with qualification & experience of key persons, etc.)
Quality norms to be adopted.
Marketing aspects
Target market.
Marketing and selling arrangement, etc.
Estimated sales with prices.
Financial Aspects
Estimated project cost with basis of individual cost components like land, building, machineries, miscellaneous fixed assets, POP expenses, contingency, etc.
Proposed means of finance with detail of term loan like amount, moratorium period, loan drawn schedule, interest rate, repayment schedule, etc.
Detail of working capital assessment with inventory norms, interest rate, estimated working capital finance.
Consumption norms of consumables, unitalities, fuel, etc. with cost.
Various cost norms like repairs & maintenance.
Please note that this is an indicative list & requirement of documents may change on the basis of the nature of project & location. Detailed requirement of documents/inputs can be ascertained post site visit.
Techno- Economic Viability Reports :
Techno-Economic Viability study of a project encompasses the evaluation of a project as per a systematic procedure for weaving the technical and financial information about the project, with relevant data about its technological and economic environment, into one or a few criteria on the basis of which the project is assessed and recommended for selection, modification or rejection.
The feasibility report aims to objectively and rationally uncover the strengths and weaknesses of an existing business or proposed venture, opportunities and threats present in the environment, the resources required to carry through and ultimately the prospects of success.
We at Cavalry have an expert team of young and experienced professionals who have collective experience across all the industries in carrying out the feasibility study.
