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IRR is a financial metric, used to calculate what returns can one expect from the investment opportunity. It takes into account cash flows throughout the investment and the time value of money. What it means is that the INR 1000 that we hold today is worth more than the INR 1000 that we receive after 3 months taking the inflation into account. The major difference between ROI vs IRR is Time value of money. ROI is simply the growth rate of your investment.
A detailed evaluation is conducted to assess the financial viability of the project across two aspects: 1 - basic management hygiene (core leadership team, statutory non-compliance, board governance and legal proceedings) and 2 - financial due diligence (Historical performance, Operating ratio analysis; debt-equity structure, Projections etc.)
We only work with industry’s best EPC (Engineering, Procurement, and Construction) partners providing end-to-end services and install only Tier 1 category assets. For the entire project duration, we have annual maintenance contracts with the EPC partner. We have a tech-enabled system to remotely monitor the project performance and alert the EPC partner to repair/rectify if there is any unusual drop in performance. Additionally, insurance coverage by top insurance companies provides cover against any unforeseen damages to the assets.
Green Energy assets are tangible assets and will provide investors an additional layer of assurance as these assets have a physical form and a residual value. Tangible assets provide a form of value diversification and as a hedge against economic uncertainty.
Expected IRR varies from project to project and depends on the factors such as type, duration, and size of the project. These parameters vary on a project to project basis, meaning some projects will have higher IRR potential compared to others being evaluated. Parking capital usually targets projects with an IRR of around 75%.
Different Investment structures such as Limited liability partnership (LLP), Holding Company, Alternate Investment Fund (AIF) will be used based on the size and type of investment. Type of structure may also vary from project to project. However, for retail investors, the most common investment structure is an LLP. A LLP is created which holds the ownership of the assets until the end of the project term. Investors via Collective Capital are named as non-managing partners in such LLP.
Tax implications on the return are dependent on the structure of the investment made and vary from Alternate Investment Fund (AIF) to Limited liability partnership (LLP) to Holding Company. In an LLP, all the returns made are post-tax and investors don’t have to pay any further taxes. Investors are required to file ITR form 3 and declare the income from LLP.
No. Our income is tied to the performance of the project. Only after the expected IRR of the investor is met, any remaining revenue from each project is shared with Parking capital.
If the project client opts out before the completion of the agreement term, a buyout clause will come into effect, which is detailed in the agreement, on a year-on-year basis. The predetermined residual value for each year will safeguard the targeted IRR of the project and ensure it is met.
One of the main risks we address is the payment risk. In addition to rigorous due diligence prior to commissioning a project, client payments are backed by security deposits and bank guarantees against untimely payments.
Any Indian citizen, Hindu Undivided Family (HUF), Companies, and NRIs can invest with Parking Capital.
NRI investors can invest through an NRO or NRE Account or from a normal bank account in India. Your returns and sale proceeds, however, will be credited to your NRO account.
In the unlikely event that a property on our platform doesn't complete its funding target, any funds that have been committed by investors will be reimbursed to the verified bank account.
No, there is no need to visit the property in person. All required documentation will be signed digitally through a reputed digital signature provider.
Yes, there is an initial 9 Months lock-in from the time the property is registered. You are free to sell your holdings thereafter. However, if you have an investment horizon of fewer than 5 Months, it is recommended to not invest with Parking Capital or in real estate in general.
For each asset listed on the Parking capital Website, a Special Purpose Vehicle (SPV) is created in which funds are raised to purchase, own and manage the property. Your investment shall be towards subscription of the shares and compulsorily convertible debentures of the SPV that holds the property and represents your fractional investment.
A Special Purpose Vehicle is an entity incorporated/created under the law, being a Partnership firm, LLP, a private company, etc., for a specific lawful purpose.
Parking Capital undertakes the legal due diligence of the property before it is purchased by the SPV. All investment and property-related legal processes are handled by Parking Capital. However, you are welcome to seek tax and legal advice from your advisors to understand if the opportunity listed is suited for you. Should you engage any legal/tax advisor, we will be happy to answer any questions that they may have.