Project Financing: A rewarding career for CAs!
Before trying to explain about project financing as a career option for chartered accountants, it is first important to understand what project financing is! Project financing is a relatively long term financing done for huge infrastructural projects and industrial ventures. The major difference between any other form of financing and project financing is that unlike the former that is done on the basis of balance sheets, project financing is based on the likely cash flows and estimated profitability of the concerned project.
What makes this field highly rewarding is that since the returns are based on future cash flows, the recruitment done in project financing firms is done only after a lot of scrutiny. And once the recruitment is made, the resources are then retained for a longer duration with lucrative packages.
Project finance starts with someone wanting something built. If it is a government, it is usually a school, a bridge, a power plant or an airport. For this the government takes out tenders and people bid for taking up that project. In this entire process, a company bidding will need a Project Finance Manager who would take care of all the legal requirements.
Project financing as a career for CA
Since chartered accountants have a thorough understanding of studying the financial statements therefore they are very good in preparing and assessing these financial statements. This specific skill proficiency will help chartered accountants to evaluate estimated project revenue and cash flows.
Chartered accountants are capable of undertaking detailed and high quality researches related to the industry as they have a strong hold in the areas of commerce and economics. On getting employed with these project financing firms, chartered accountants are expected to rationally evaluate the opportunities and threats related with the prospective project financing deal.
The most lucrative combination for chartered accountants who wish to work in project financing firm is an additional experience in the banking industry.
Since CAs have a strong foundation in economics and commerce, they carry out high quality industry research and analysis easily. This helps the companies in rationally evaluating the risks associated with any project financing.
When you are part of the project financing team in a bank or FI, you would typically get aligned to one sector. However, as you spend time working on different transactions in that sector, your expertise in that industry will build up.
Do you need more than a CA qualification?
First you need to pass all the three levels of Chartered Accountancy course conducted by the Instituted of Chartered Accountants of India (ICAI). After completing your article ship, you may opt to work under a practising CA. Make sure that you specifically work in the area of project financing. However, you can also get a certification called NCFM FLIP Equity Research Certification (http://www.nseindia.com). While the focus of this certification is on researching stocks to arrive at a price for it, it does cover industry and economy research apart from valuation of a company using different models.