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Capital Infusion

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Capital infusion
Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. In the context of venture capital, it can also refer to funds received from a venture capitalist to either get the firm started or to save it from failing due to lack of cash.

Capital Infusion
1. Within a firm, the provision of funds to a relatively unsuccessful division from the profits of another division. Management may infuse a division with capital if it believes that it will eventually become profitable.

2. Funds received from a venture capital firm. Capital infusion may help a start-up survive the first few months or years before it becomes profitable, or it may help a failing business maintain its operations as it restructures or reforms.


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The result is an affordable housing stock that is deteriorating and badly in need of capital infusions that are unlikely to come without changes in current tax rules.
Recently a section of the media reported that the national carrier Air India asked for a Rs 20,000 crore capital infusion from the government, Earlier there were reports that the carrier, struggling to cope with a cash crunch, sought an immediate loan of Rs 10,000 crore from the government and an annual capital infusion of Rs 2,500-3,000 crore for the next four-to-five years.
The need for capital infusions from the sovereign to domestic retail banks is also thought unlikely.
 
 
 
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