Globalisation of business, raising of capital from international institutions /markets has substantially increased in the last decade as compared to earlier periods. To accommodate the demands of investors and fund raisers, Foreign Financial Institutions have dramatically changed the various products through which funds are lent and new products are being introduced to meet the specific requirements of customers. The opening of Indian Economy has also given opportunity for investments in India by
International investment brings 2 types of risks: Primarily The risk of the asset itself and secondarily the risk of forex rate fluctuations. Eventhough the basic principles of financial management i.e. efficient allocation of resources and raising at the economical costs continued to remain the same,the environment (viz. Political risks, tax structures, forex risks, sources of finance etc.) in which this is happening has changed.