A STUDY ON LEVERAGED BUYOUT MODELING FOR INFRASTRUCTURE FIRMS AT GVK POWER & INFRASTRUCTURE LTD

Abstract

A leveraged buyout approach is employed by GVK Power & Infrastructure Ltd. in order to evaluate the potential profitability of the acquisition. A comprehensive analysis of the infrastructure industry's risks, as well as the interplay between the firm's assets, cash flows, and debt, is included in the paper. Projects in this field require a lot of cash and have a lengthy duration, thus finding the optimal debt-to-equity ratio is the main goal of the research. The ability of the organization to continue borrowing money in the face of adverse circumstances is assessed using a battery of scenarios and stress tests. Controlled revenue and prolonged project schedules are two of the financing-related variables examined in the research. Additionally, it delves into the ways in which operational changes, refinancing, or asset divestitures can enhance investor returns. Structured loans, government assistance, and diverse revenue streams are all risk mitigation strategies that can help a business better manage its debt. The research delves deeper into the ways in which synergies and cost savings could enhance the reliability of cash flow. As an additional strategy for increasing value, reorganizing the portfolio is suggested.