A
- AIF — Alternative Investment Fund
- SEBI-regulated investment vehicle. Category-II AIFs (private credit funds) are major lenders for mezzanine debt, promoter funding and structured situations in India.
- ALOS — Average Length of Stay
- Hospital-sector metric — average days a patient stays per admission. Used in hospital project finance for cash-flow modelling alongside Bed Occupancy and ARPOB.
- ARC — Asset Reconstruction Company
- RBI-regulated entity that buys distressed loans from banks at a discount and recovers them. Plays in distressed debt market.
- ARPOB — Average Revenue Per Occupied Bed
- Hospital-sector metric — daily revenue per bed when occupied. Used for hospital project-finance cash-flow projections.
B
- Basis Point (bps) — Basis Point
- One-hundredth of one percent (0.01%). 100 bps = 1%. Used to express interest-rate differences and pricing changes.
- BG — Bank Guarantee
- Non-fund-based lending product where the bank guarantees payment to a third party if the borrower defaults on an obligation. Used for tenders, performance contracts, supplier credit.
- BOT — Build-Operate-Transfer
- Infrastructure concession structure — private developer builds, operates and transfers asset back to government after concession period. Revenue typically from tolls or user fees.
C
- CC — Cash Credit
- Revolving working-capital facility against current assets (stock + book debts). Interest only on actual outstanding. Most common Indian working-capital product.
- CERSAI — Central Registry of Securitisation, Asset Reconstruction & Security Interest
- Central registry where all mortgage charges in India must be registered. Mandatory for any secured loan above ₹10 lakh.
- CLA — Common Loan Agreement
- Single loan agreement signed by all participating lenders in a syndicated / consortium loan. Standardises terms across lenders.
- CMA — Credit Monitoring Arrangement
- RBI-prescribed format for working-capital loan applications. Includes projected B/S, P&L, fund flow and MPBF computation.
- CRAR — Capital to Risk-weighted Assets Ratio
- RBI-prescribed capital adequacy ratio for banks and NBFCs. Measures capital as percentage of risk-weighted assets.
D
- DPDP — Digital Personal Data Protection Act
- India's data privacy law (2023). Governs collection, storage and processing of personal data including by financial advisers.
- DPR — Detailed Project Report
- Comprehensive document describing a capex project — scope, design, cost estimate, schedule, financial projections. Mandatory for project finance.
- DSCR — Debt Service Coverage Ratio
- Annual cash flow available for debt service divided by annual debt obligation (principal + interest). Lenders typically require 1.30-1.50× minimum.
E
- EBLR — External Benchmark Linked Rate
- RBI-mandated lending rate benchmark — banks must price loans linked to an external benchmark (typically repo rate). Replaced MCLR for retail and SME loans.
- ECB — External Commercial Borrowing
- Debt raised by Indian entity from non-resident lender, in foreign currency, regulated under FEMA. Two routes: Automatic and Approval.
- Escrow — Escrow Account
- A separate bank account where designated cash flows are deposited and released per agreement terms. Standard mechanism in project finance, LRD, construction finance.
F
- FACR — Fixed Asset Coverage Ratio
- Total fixed assets divided by total debt. Lenders use as a security cover metric.
- FCNR(B) — Foreign Currency Non-Resident (Bank)
- Foreign-currency deposit-based loan product. Indian banks lend in FX from FCNR deposits — common short-tenor FX product.
- FEMA — Foreign Exchange Management Act
- India's law governing foreign exchange and cross-border transactions. ECB is regulated under FEMA.
- FPO — Follow-on Public Offering
- Secondary public issue of shares by an already-listed company. FPO bridge financing is a common pre-FPO debt product.
G
- GIFT City — Gujarat International Finance Tec-City IFSC
- India's only operational International Financial Services Centre, located in Gujarat. Foreign-bank IFSC branches offer simplified ECB-equivalent products.
H
- HAM — Hybrid Annuity Model
- Road concession structure — NHAI pays 40% during construction (5 tranches), 60% as annuity over 15 years post-COD. Most common road-sector structure today.
- Hypothecation
- Security creation method for movable assets (stock, book debts, machinery) without transferring possession. Standard for working-capital security.
I
- IIFCL — India Infrastructure Finance Company Limited
- GoI-owned dedicated infrastructure NBFC. Anchor lender for most large Indian infrastructure project finance.
- IM — Information Memorandum
- Detailed document describing borrower and proposed transaction, circulated to lenders for evaluation. Standard pitch document.
- Intercreditor Agreement
- Side agreement between lenders (not borrower) governing voting, enforcement coordination, payment ranking. Critical in multi-lender deals.
- IRR — Internal Rate of Return
- Annualised return percentage that makes net present value of cash flows zero. Used to price mezzanine debt and equity investments.
L
- LAP — Loan Against Property
- Secured term loan with property mortgage as security. End-use flexible; LTV 50-70% of property value.
- LBO — Leveraged Buyout
- Acquisition financed primarily with debt (60-70%) and a smaller portion of sponsor equity (30-40%). Common for PE-led transactions.
- LC — Letter of Credit
- Non-fund-based lending product where the bank guarantees payment to a supplier on behalf of the buyer. Used for trade.
- LIE — Lender's Independent Engineer
- Independent engineer appointed by lender to verify construction progress and certify tranche disbursements in project finance / construction finance.
- LRD — Lease Rental Discounting
- Secured term loan against future rental cash flow from leased commercial property. Up to 90% of net rentals, 15-year tenor.
- LRN — Loan Registration Number
- Number issued by Authorised Dealer bank to register an ECB with RBI. Required before drawdown.
- LTC — Loan-to-Cost
- Loan amount as a percentage of total project cost. Used in construction finance (where there's no completed market value yet).
- LTV — Loan-to-Value
- Loan amount as a percentage of asset market value. Used for LAP, LRD against completed property.
M
- MCLR — Marginal Cost of Funds-based Lending Rate
- Lending rate benchmark used by Indian banks. Pricing expressed as MCLR + spread.
- Mezzanine Debt
- Subordinated debt that sits between senior debt and equity in capital stack. Higher pricing (12-18% IRR), often with equity warrants.
- MPBF — Maximum Permissible Bank Finance
- RBI-prescribed formula for working-capital sanctions. Method II: 75% of current assets minus other current liabilities. Method III: more conservative.
N
- NABARD — National Bank for Agriculture and Rural Development
- GoI apex bank for rural / agricultural finance. Provides refinance to commercial banks for eligible agri-sector lending.
- NCD — Non-Convertible Debenture
- Debt instrument issued by company to raise capital from bond market. SEBI-regulated. Can be secured or unsecured, listed or unlisted.
- NCLT — National Company Law Tribunal
- Tribunal that handles insolvency and bankruptcy proceedings under IBC. Distressed asset auctions happen here.
- NHAI — National Highways Authority of India
- Government body responsible for highway development. Counterparty for HAM, BOT, TOT road concessions. Sovereign-equivalent for lender purposes.
O
- OC — Occupancy Certificate
- Certificate issued by municipal authority confirming a building is ready for occupation. Triggers transition from construction finance to LRD / inventory finance.
- ODI — Overseas Direct Investment
- Indian entity's investment in foreign company. Regulated under FEMA. Relevant for cross-border acquisitions.
P
- PIK — Payment-In-Kind
- Interest that accrues but isn't paid in cash — added to principal, repaid at maturity. Common in mezzanine debt.
- PLI — Production-Linked Incentive
- Government scheme offering financial incentives for domestic manufacturing in 14 sectors. PLI receipts factor into project finance DSCR.
- PPA — Power Purchase Agreement
- Long-term contract between power producer and offtaker (discom or corporate). Typical tenor 25 years. Backbone of renewable project finance.
- Project Finance
- Long-tenor debt where lender repayment is from project cash flow, with limited recourse to sponsor. Typically housed in SPV.
R
- RERA — Real Estate (Regulation and Development) Act
- Indian real estate law requiring project registration, escrow of 70% of receivables, and stricter developer accountability. Mandatory for construction finance.
S
- SARFAESI — Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act
- Indian law allowing banks/NBFCs to enforce security without court intervention. Speeds up recovery.
- SEBI — Securities and Exchange Board of India
- India's securities market regulator. Governs NCDs, AIFs, listed companies, debenture trustees.
- SOFR — Secured Overnight Financing Rate
- US benchmark interest rate replacing LIBOR. Most ECBs are now SOFR-linked plus spread.
- SPV — Special Purpose Vehicle
- Separate corporate entity created to house a specific project or transaction. Used in project finance to ringfence assets from sponsor balance sheet.
T
- TEV — Technical Economic Viability
- Independent appraisal of project's technical feasibility, capex estimate, market demand and financial projections. RBI requires for project finance above ₹250 Cr.
- TOT — Toll-Operate-Transfer
- Infrastructure concession variant — existing operational asset (typically road) auctioned to private operator who collects tolls for concession period.
- TRA — Trust and Retention Account
- Escrow-style account in project finance where all project cash flows are deposited and disbursed per pre-defined waterfall.
W
- WCDL — Working Capital Demand Loan
- Fixed-tenor (90-180 day) revolving working-capital tranche. Lower pricing than Cash Credit because lender liquidity planning is easier.
- WCTL — Working Capital Term Loan
- Term loan converted from existing working capital (often as part of restructuring). Tenor 5-7 years; frees up the WC limit.