A financial world business of providing various financial services other than lending such as public issue management, underwriting such issues, loan syndication management, mergers and acquisition related services, etc.
Mezzanine financing is defined as a financial instrument which is a mix of ‘debt and equity finance. It is a debt capital that gives the lender the rights to convert to an ownership or equity interest in the company. It is listed as an asset on company’s balance sheet. As it is treated as equity in a company’s balance sheet, it allows the company to access other traditional sources of finance.
In the hierarchy of creditors, mezzanine finance is subordinate to senior debt but ranks higher than equity. The return on mezzanine finance is
higher in relation to debt finance but lower than equity finance. It is also available quickly to the borrower with little or no collateral. The concept of
mezzanine financing is just catching up in India.
Mezzanine financing is used mainly for small and medium enterprises, infrastructure and real estate. ICICI Venture’s Mezzanine Fund was the
first fund in India to focus on mezzanine finance opportunities.
The Mumbai Inter Bank Bid (MIBID) is the weighted average interest rate at which certain banks in Mumbai are ready to borrow from the call money market.