Question

The March 2020 contract offered by Baroda Bank for the lease of 100 DG sets was the opportunity that Hairiya and Patra had been anticipating for some time. Their company could expand from operating strictly in the highly competitive business of providing DG maintenance services into the new, vertical business market of leasing DG sets. Both Hairiya and Patra were eager to explore this lucrative new opportunity, which they hoped would bring a much-needed longer-term revenue scope and help diversify their business. The proposal was required to be structured in the form of a lease, rather than a sale, and had to include all incidental and operational costs. The COVID-19 lockdown had made the entire Rudra staff unavailable.

Answer 1

Hairiya and Patra viewed the opportunity to lease DG sets to Baroda Bank as a business diversification strategy that could lead to long-term revenue growth. The proposal needed to cover all costs and was structured as a lease, a process complicated by the unavailability of their staff due to the COVID-19 lockdown.

Step-by-step explanation:

The opportunity presented by Baroda Bank to lease 100 DG sets was a significant prospect for the company owned by Hairiya and Patra. This new venture into the leasing DG sets market was anticipated as a potential avenue for business diversification and long-term revenue growth. Given the circumstances, with the COVID-19 lockdown rendering the Rudra staff unavailable, the proposal for the lease needed to be inclusive of all incidental and operational costs, outlining the lease arrangement rather than a sale. This speaks to strategic planning and risk management aspects of running a business under unforeseen challenges such as a pandemic lockdown.