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Pharma Writeup

The Indian OEM Industry typically has long cycles where they get orders and fix rates for around one year and maybe even more. But the supply or the exports are a continuous process throughout the year with 60 to 120 days business cycles. Here the exports are primarily in USD and Eur. They generally get subvention on PCRE and choosing between PCFC and PCRE and managing the same is a challenge. They may have some smaller imports also mostly in USD primarily from China. But essentially they are net exporters. Sometimes they have some CAPEX imports also where the payments are of longer nature.

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Get right price on your Fx and save cost

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FOREIGN EXCHANGE SOLUTION THAT WE PROVIDE

Cost reduction on import payments through import hedge strategy

We will monitor your payments bill by bill date by date and will advise at the right time to hedge along with specific advice on hedge instruments, price and tenor. Objective will be to minimise your payment Fx rate compared to either an unhedged position or against forward premium.

Rate improvement in Exports through Export hedge strategy

We will be monitoring your order book, invoice book, and also projected annual exports on a daily basis. We will advise you on when to hedge, how much to hedge, hedge instrument, right rate, hedge tenor, etc. We will help in the execution of the hedge and in any setup with the bank if required. The objective here is to achieve a high annual budget rate and also a higher realization rate compared to an unhedged position or forward rate. The inflows which come, whether to early utilize or convert at the market will also be advised.

Loan interest rate reduction

We will be evaluating your working capital and term loan portfolio. On the working capital, we will advise you when to go for PCFC, PCRE, EPC, FCTL, CC, CP, etc, and what rate you should get. On the term loan side, we will advise you on ECB, FCTL, RTL, and how you can manage Foreign currency risk or fixed floating risk so that overall you achieve cost savings.

Risk Reduction - Limit P&L volatility

We do not focus on savings alone but on risk-adjusted savings. Hence our strategies are conservative and limit risks both economically and on an accounting basis.

Ensure stability even if currency crisis happens or sharp move happens

There are times when your functional currency INR has moved sharply. Our strategies ensure that in such a scenario, you will never be caught off guard.

Implement discipline in forex management

We proactively reach out and ensure that there is required discipline in your forex management, and it is not put into backburner during stable times

Educate and introduce options and swaps for hedging where required.

Using options help at times. However, option-based hedging should not be done without deep understanding. We educate and handhold companies in understanding vols surface, Greeks like delta, gamma and how to use the Greeks for decision making and monitoring.

Analysis and Evaluation of alternative strategies on following parameters

IRR or net effective interest cost with hedging, Break even analysis, Cost & Risk optimisation, Regulation, Accounting impact, Cash impact, value at risk impact.

Advising on specific hedging and risk management decisions of the company on regular basis

Review every-day morning and afternoon by Senior advisors, Morning Customised advise Interim advice during the day if required Follow up during the day to ensure advice is implemented timely and not missed out

Strategizing and implementation of hedge execution leading to cost reduction

This will include getting the right price on hedge execution, Reduction of credit charge, Avoid trending mark-ups, Narrowing Bid-Offer spread, Using nuances of hedging to improve price, Unwind value calculation, and negotiation strategy

Providing regular market research, updates, data analysis, webinars, etc

This will include- Daily morning and evening update,Market Research Reports,Exclusive Reports,Webinars on Currency and related areas, Global markets, Industry movements etc ,Analysis and assisting in presentations for Board and Investor meetings if any

Training and capability building

This includes- Regular query resolution and explanation of practical concepts,Structured Training to senior management on specific areas/complexities as required ,Annual workshop with IIM Calcutta

Assisting companies in evaluation of documents

Hedge term sheets, Hedge covenants, Hedge deal confirmation, ISDA etc

Help in arranging hedge bank if needed

Support in counterparty selection, Arranging hedge lines in favorable terms ,Selection of right bank based on hedge type

Implementation of sophisticated methodologies of risk management

Live real time MTM, Value at Risk, Risk control, MIS & Control set up

MTM Valuation, Quarter End Valuation Certificate, CVA & DVA.

We provide third-party valuation certificate of hedge instruments which is well accepted in the market and CVA, DVA calculations as well if required. Besides we add value to corporates by negotiating well for unwinding values if required

Performance Reviews Weekly Performance reviews

Meeting and Calls on regular basis for “day to day” operations,Performance review weekly on strategy and plan with the Managing Director/Director ,Interim Assessment of performance based on the “objective to be achieved “for Your Company ,Quarterly Assessment of performance based on the “objective to be achieved for Your Company

Global Best Practices in Treasury

Updates to the client on Global best practices and assessment of the clients “Best practices and opportunities” Support in working out the Risk Management Policy

INTEREST RATE SOLUTION THAT WE PROVIDE

Loan interest rate reduction

We will be evaluating your working capital and term loan portfolio. On the working capital, we will advise you when to go for PCFC, PCRE, EPC, FCTL, CC, CP, etc, and what rate you should get. On the term loan side, we will advise you on ECB, FCTL, RTL, and how you can manage Foreign currency risk or fixed floating risk so that overall you achieve cost savings.

Loan hedging and strategy evaluation

We support in the evaluation of various hedge strategies like swaps, option-based hedging, short-term hedging with rollover, tranche hedging, partial amount hedging etc. Within swaps also there are multiple variants and IRR calculation for each of the choices will be evaluated. Within option structures, we will be evaluating plain calls, out-of-the-money calls, spreads, staggered call spreads, etc. Optimum hedge structure reduces interest cost

Pricing of loan strategies and IRR scenario analysis

We will be involved in the pricing of strategies and the computation of IRR under various scenarios. There is a deep understanding of credit charges and bank models which helps in the reduction of cost.

Pricing, Negotiation and cost savings

We will set up the system for Negotiation of the pricing, strategy for getting effective pricing, and support in negotiations if required. This will be an extremely important aspect as the possibility of leakages can be significant. Often banks charge the high prices on deal execution and considering we have worked in senior management positions in both Indian and Foreign banks we understand the psychology and the tricks of the trade. We help the companies in appropriate strategizing to get the right rate while dealing with the banks

Educate and introduce options and swaps for hedging where required.

Using options help at times. However, option-based hedging should not be done without deep understanding. We educate and handhold companies in understanding vols surface, Greeks like delta, gamma and how to use the Greeks for decision making and monitoring.

Structured financing

We bring structured financing ideas and execution to corporates. Structuring involves tweaking of securities, the composition of loans, fixed-floating switching, international borrowing, etc.

COMMODITY SOLUTION THAT WE PROVIDE

Commodity hedge set up

To hedge commodity risk, the set for hedging is needed. We do end-to-end set up of commodity risk management and hedging desk. Once the set-up is done, you can hedge your risks in appropriate exchange or in the OTC market

Should you hedge your commodity risk

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Below a short write up on the benefits of this service

Commodity Risk management Policy

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Below a short write up on this services benefits

Commodity Hedge Strategy making

Followed by Service and Sub Service Block which is relevant for Auto ( In each service pointers of what we do as subsurface). These blocks with the same image will be in other Industry pages where they may be relevant

Below a short write up on the benefits of this service

Training and Capability building related to commodity hedging

We do conduct commodity hedging and risk management training for our clients and executives. It involves an explanation of how hedging helps, how pricing is done, option structures, and many more details on commodity hedging.

Using option based commodity hedging

Options help you to mitigate risk while allowing you to benefit from the favorable moves. Often in commodity risk management, options are extremely useful. We provide calculators, structures, pricing, strategy, and monitoring of option-based hedging. Option structures are also used to reduce the cost of options.

Daily review and recommendations

We review your exposures and hedges every day and evaluate alternative strategies which would be useful. We select the right strategy and recommend the same in a timely manner. During market hours our team will come back to you promptly whenever there is a market movement.

Hedge Execution support

We support in hedge execution as well. We help you strategize for getting the right price and for the smooth execution of hedges. We use calculators, our understanding of bid-offer, and other nuances of the market to extract the right price for you.

Monitoring and Performance Management

We monitor your overall exposure, past deals, settlement details, etc to ensure that policy adheres, and strategy is aligned for achieving the objective. We remain focused on objectives like achieving cost reduction, profitability enhancement, or volatility elimination.

Place a single quote (each industry page different quote) that talks about how in delivery we differentiate our selves in terms of experience, knowledge, technology, etc

UPCOMING EVENTS

01

May

May PTA Meeting

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12

May

Parent Teach Conferences

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Pharma relevant case study

This client in the Auto sector has in the last six quarters has been seeing gains and saving consistently even when the markets were volatile by using forex. His saving amounted to 1.85% per Dollar.( 8.4 million ( 84lacs Samir can give percentage here instead of the exact number of saving)) This client has export exposure both in Euro and USD

We helped the client’s team to make money by identifying the correct instruments to use. There were times when the client was inclined to a particular hedging strategy basis their comfort zone. We worked with them to understand the available options, ran simulations to showcase future scenarios, and convinced them of certain strategies that were new but very useful for them. We brought in a discipline to hedge only at the right time specific to them -being identified regularly basis their contract dates and the financial market dynamics. We maintained close monitoring to review if the hedging advice was incorporated and immediate course corrections. A lot many nuances were discussed basis the contract type of our client and the prevailing market rates before we actually hedged. We also throughout the period advised them on rates and worked with them to develop strategies for bank negotiations. We also helped in actual negotiations.