Investment Feasibility Studies in Pakistan an investor's view of returns, risks and exit

A good project is not always a good investment

A project can be profitable and still be a poor investment for you, if the price is too high, the risks fall on the investor, tax takes a large share of returns or there is no realistic way out. An investment feasibility study looks at the deal from your side of the table.

We start with the opportunity itself: the business model, market, management, historical performance and plans. We then build or review the projections and test them, before focusing on the investor's position. That means modelling the cash you will invest and receive, including dividends, interest or a later sale, and calculating returns such as internal rate of return, money multiple and payback, under base, upside and downside cases.

Tax and regulation can change the picture significantly. We review how your returns will be taxed in Pakistan, including tax on dividends, capital gains on a sale of shares and withholding on payments to you, and for foreign investors, how tax treaties and the rules on repatriation of profits and capital apply. We consider registrations and approvals the investment needs, such as SECP filings for share issues and sector requirements, and any incentives for which the project may qualify.

Protection and exit complete the analysis. We review the proposed shareholding, share classes and key terms such as board seats, reserved matters, anti-dilution and transfer rights, and set out realistic exit routes and their timing. The report ends with a clear view on whether the investment is attractive at the proposed price and terms, and which conditions or protections we would recommend. We also note any conditions we would attach before funds are released, such as completed registrations, agreed financial reporting or specific warranties from the promoters.

Information is the investor's main protection at this stage. We prepare a request list for the promoters covering accounts, management accounts, contracts, licences, tax filings and the capital structure, and we meet management to understand the plan and test their assumptions. Where information is missing or inconsistent, we report it, because gaps at this stage often predict problems later. For overseas investors, we can manage the process locally and report in a format suited to their investment committee.

Investment studies draw on financial due diligence, tax and regulatory due diligence and company valuation. For a project you will run yourself, see feasibility studies.