Abstract
The case explores the intricacies of debt refinancing decisions in the context of large real estate assets. Neelima Patel, representing Roha Foods—a business-to-business food product supplier—faced a crucial financial decision. Having financed the company's expansion with a floating-rate mortgage loan from Cuttak Bank, she was now presented with a refinancing offer from Bharat Bank. The case provides a walk through the process of evaluating effective borrowing costs, loan amortisation and refinancing scenarios. The case offers an opportunity to delve into real-world applications of financial analysis, risk assessment and strategic decision-making in corporate finance, making it an engaging and practical tool for finance, real estate and accounting courses. Loan amortization, floating-rate loans, loan-to-value (LTV) ratio, debt-service-coverage ratio (DSCR or DCR) and effective borrowing cost (EBC) remain central to analyses.
Additional Information
| Product Type | Case |
|---|---|
| Reference No. | F&A0578 |
| Title | Roha Foods: Bharat Bank Refinances a Mortgage Loan |
| Pages | 9 |
| Published on | Aug 29, 2025 |
| Year of Event | 2023 |
| Authors | Das, Prashant; Purohit, Prashant; |
| Area | Finance and Accounting (F&A) |
| Discipline | Accounting, Finance |
| Sector | Agriculture and Animal Husbandry, Banking Finance Insurance (BFI), Infrastructure, Manufacturing |
| Learning Objective | An entrepreneur must decide whether, and how to refinance a floating-rate mortgage loan using a counter offer made by another lender. Key learning objectives include: 1. Understanding amortization schedules for floating-rate loans. 2. Calculating and analyzing the EBC for prepayment and refinancing options. 3. Evaluating loan refinancing decisions based on risk metrics such as Loan-to-Value (LTV) and Debt Service Coverage Ratio (DSCR). 4. Assessing the financial implications of different refinancing alternatives. |
| Keywords | Mortgage, Refinance, Loan underwriting, Real Estate |
| Country | India |
| State | Gujarat |
| City | Ahmedabad |
| Organization | Roha Foods |
| Courses | PhD, MBA (PGP), MBA-FABM, MBA-PGPX, EEP, ePGD-ABA, BPGP, AFP |
| Access | For All |
My Cart
You have no items
in your shopping cart.