Job Purpose
- To analyze, research, recommend and execute in the management of foreign currency risk due to the company’s global operations and form a view on currency rates to ensure suitable hedging.
- To analyze, research, recommend and support in raising Long Term Borrowings and lead Credit Rating relationships.
- To analyze, research, recommend and support in Working Capital Optimization and Structured Financing Solutions
- To meet RBI and SEBI compliances as prescribed by statute.
Job Context & Major Challenges
Grasim is a large & diversified company with presence in 7 businesses, with most of them being market leaders in their respective industries. The Company has a successful past of incubating new businesses and has recently forayed into the Paints Business and B2B E-Commerce Business, with aggressive growth plans. Existing Businesses which are already on aggressive growth plans. In the past, the Company has funded the growth of its businesses largely through internal accruals and minimal borrowings; however, this has changed as the Company has currently borrowed (for long-term) an incremental (Rs. 12,000 cr) in the last 2 years to fund its growth in existing & new businesses. This has brought with it new dimensions & a significantly large landscape for the treasury function w.r.t Borrowing size, Interest Rate & Tenor Risk Management, Re-financing strategy, Different Borrowing Markets & Instruments, Commodity Price Risk Management and Working Capital Management. Ensuring maintenance of highest possible credit rating in both domestic & global markets will be a key deliverable to achieve the Company’s plans of continuous low-cost funding. So far, a healthy Net Debt situation has ensured it’s not been a challenge, however, this is a challenge as the Company is into an peak period of high borrowings coupled with inherent commodity price led volatility in earnings of our existing businesses & execution risk of two large size new business. The Company’s Solar Business (subsidiary) also has aggressive growth plans, and the Treasury Function guides them in their financing strategy while ensuring the maximisation of their potential in fundraising and minimal impact on Grasim’s credit profile. The Company now has a significant forex exposure of c. USD 1.3 bn every year. Increased volatility, uncertainty and complexity in global financial markets present a large Earnings Volatility Risk; a 5% change in the forex rate impacts the Operating Business’ EBIDTA by 10%.Major Challenges
- Timely hedging the open position to manage currency fluctuation risk as currencies are highly volatile and ensure that units timely report their respective open forex exposures and prepare forex MIS - business wise and currency wise for suitable hedging action in accordance with Grasim’s hedging policy.
- Borrowing from banks / financial institutions / money markets in the light of tighter capital and balance sheet restriction of banks and Mutual Funds at optimum cost. Ensure that sanction letters / other documents should not contain any restrictive covenants for company.
- Managing relationship with credit rating agencies and timely dissemination of information / key developments and continuous engagement with rating agency to maintain investment grade rating.
- Managing the increasing working capital requirements of new businesses and existing businesses using financial structures that support a negative working capital cycle, including factoring, supply chain finance, and asset-backed lending.
- Doing research / study to understand the currency and money market rates movement and to support in critical decision on borrowings and hedging foreign currency risk.
Key Result Areas
KRA (Accountabilities) (Max 1325 Characters)
Supporting Actions (Max 1325 Characters)
KRA1 Facilitate foreign currency management and mitigation of currency risk to ensure suitable hedging action as per risk management policy
- Timely hedging the open position to manage currency fluctuation risk as currencies are highly volatile and ensure that units timely report their respective open forex exposures and prepare forex MIS - business wise and currency wise for suitable hedging action in accordance with Grasim’s hedging policy.
- Monthly exposure management and acting as a central control for Forex and provide MTM details to units for hedge accounting.
- Monthly MIS presentations to CFO discussing Market Views, hedging strategy, it’s results.
- Provide banks with signed deal confirmations and assist units in submitting underlying to ensure compliance with RBI guidelines.
- Also, prepare presentations for audit committee meetings and unhedged foreign currency certificate on a quarterly basis.
- Analyse the forex market to identify opportunities for hedging over and above prescribed guidelines.
- Effective utilisation of EEFC account and exercising control on daily FX related payments.
- Recommend Hedging strategies.
KRA2 Assist in raising LT funds
- Prepare General Information Document (GID) and Key Information Document (KID) for NCD in conformity with SEBI Regulations, the Companies Act, 2013 and industry practice and issue Set-up on E-bidding with pre and post allotment activities.
- Assist in preparation of Offer letter for FCY Borrowing, arranging pre and post issue activities like set up of VDR, resolving queries of domestic and international legal counsel etc.
- Assist in raising long term borrowing from Bank, negotiation of Terms and Conditions of sanction letter and loan documentation.
- Recommend borrowing strategies / market opportunities to reduce the borrowing cost.
KRA3 Credit Rating Management
- Vet rating rationale shared by credit rating agencies CRISIL, ICRA, India Ratings, CARE, Moody’s and S&P regarding content / business description, disclosure of confidential information and factual inaccuracies in the report.
- Based on suggested modifications, the credit rating agencies revise the rationale and publish it on their websites to support Grasim’s AAA (Stable) / A1+ rating (Domestic).
- Negotiate with credit rating agencies to ensure cost minimization and timely revalidation of Grasim’s credit rating.
- Manage relationship with credit rating agencies and timely dissemination of information / key developments and continuous engagement with rating agencies to maintain stable investment grade rating.
KRA4 Conduct market research and form views on currency rates/money market movements to support in critical decisions on borrowing and hedging foreign currency risk. 1. Analyze movements in currency and capital market, impact of macroeconomic variables on exchange rate and measures introduced by RBI to maintain stability in the market assess impact of FDI inflows and outflows in the market.
- Form a view based on in-depth market analysis for timely and correct actions. Also, study key technical indicators including relative strength index, trend line and Fibonacci sequence to identify key support and resistance levels.
- Liaise with banks, brokers, primary dealers, AMC, and economists to obtain an understanding of market sentiment.
KRA5 Working Capital Optimization & Structured financing
- Design and execute financial structures that support a negative working capital cycle.
- Evaluate and implement structured finance solutions including factoring, supply chain finance, and asset-backed lending.
- Engage with various units to understand their working capital and funding requirements. Explore solutions with different banks and financial intermediaries.
- Liaise with banks and legal counsels to draft agreements for the structures planned, which pass auditor approval and drive implementation across divisions in Grasim
