Product details

This caselet is meant to introduce the students/participants to the concept and connotation of capital rationing as well as the impact of inflation on the project's profitability. After gaining relevant industry as well as academic experience, Pranay Reddy (Pranay) ventured to start his own pharmaceutical firm. Pranay was the Founder and Chairman of Pranay Pharmaceuticals Private Limited (PPPL). Though he earned decent returns in the first year, he was worried about the growing instability in the economy. He was worried about the estimated inflation rate of 12% and wanted to know the impact of inflation on the remaining 2 years of the project. Besides, as Pranay aspired to expand his product portfolio, he planned to add nine products to the existing portfolio. However, with the given capital constraint of INR45,00,000, he was to choose only those projects, which would fit into his budget. As he was puzzled and required an accurate solution, Pranay approached his friend and Financial Consultant Srinath Dasari to resolve his dilemmas.