Financial Management - 1

Module 1: Financing Decisions

The Role and Environment of Managerial Finance,
Indian Financial System and Long Term Financing
Decisions
Module 2: The Core Concepts in Financial
Management
Risk and Return, Time Value of Money and Valuation
of Securities
Module 3: Investment Decisions
Cost of Capital, Capital Budgeting Decisions
Financial Management - 1
100% case based teaching
Continuous evaluation by way of:
Submission of case write up by students prior to case
discussion
Class participation based on assigned text book chapter
and case
 Financial Management – 1
Module 1 (10 sessions)
1. Inaugural Session - 1
2. Introduction to Financial Management
( 3 Sessions – 3 Cases)
3. Indian Financial System
( 1 Session – 1 Case)
4. Corporate Long Term Financing Decisions
(4 sessions – 4 Cases)
5. General Discussion on Financing Decisions and
Current Developments– 1 Session
 Introduction to Financial Management
Topics

The scope and functions of corporate finance and its

interface with other functional areas

The concept of shareholders’ wealth maximisation

The CFO in the changing environment of corporate finance

 Introduction to Financial Management
Student Preparation
Topic Cases

 The scope and functions of Unilever Limited: Transforming the

corporate finance and its Finance ‘Function’
interface with other functional
areas
 The concept of shareholders’ Infosys and Satyam Computers:
wealth maximisation Whose Wealth is Maximised?
 The CFO in the changing
environment of corporate
finance India’s Best CFO, Praveen Kadle

Financial Management, 9e, I. M. Pandey, Ch 1 The Role

and Environment of Managerial Finance (3-15)
 Unilever Limited: Transforming the
Finance ‘Function’ – Learning Objectives

To understand the position and importance of

finance function in an organisation
To analyse the interface of finance function with
other functional areas
To understand the required skill sets for an
effective CFO.
 Infosys and Satyam Computers:
Whose Wealth is Maximised?
Learning Objectives
To understand the concept of wealth
maximisation and the different ways of
maximising shareholders’ wealth
To contrast the way shareholders’ wealth was
managed at Infosys and Satyam over years
To debate on the role of CFO on maximising
shareholders’ value.
 India’s Best CFO, Praveen Kadle
Learning Objectives
To understand the core function of a CFO and
his/her changing roles with the increasing
business demands
To discuss the role of CFO in Tata Motors’
business between 2001 and 2005
To analyse the factors that made Praveen Kadle,
CFO of Tata Motors, the Best Indian CFO of 2006
To evaluate the challenges faced by Tata Motors’
CFO during 2006–2008.
 Module 1: Part 2
Indian Financial System
 Indian Financial System
Topics

An Overview of Financial System

Constituents of Financial System

Regulation of Financial System

 Indian Financial System
Learning Objectives
To analyse the role of a financial system in the
development of an economy
To understand various constituents of a country’s
financial system and debate on whether and how each
of these constituents should work together to have the
right influence on the economy
To understand the rules and regulations that govern
the Indian financial markets, along with the steps
taken by regulators to ensure stability amidst global
financial meltdown.
 Indian Financial System
Student Preparation
Case: Indian Financial System: A Young Entrepreneur’s
Dilemmas
Text Book Chapter: Financial Management, 9e, I. M.
Pandey, Ch 19: Capital Markets in India ( 421-431)
Internet:
 www.rbi.org.in
 www.sebi.gov.in
 www.nseindia.com
 www.bseindia.com
 Indian Financial System:
A Young Entrepreneur’s Dilemmas
Learning Objectives
Financial System and its Constituents

Deregulation and Latest Trends

Regulations and Regulatory Bodies

 Module 1: Part 3
Corporate Long Term Financing
 Corporate Long Term
Financing Decisions - Topics
Venture Capital Financing Equity Financing
Debt Financing Initial Public Offering
Debentures Follow On Public
Term Loans and Deferred Credit Offering
Private Placement
Rights Issue
Bonus Issue
 Corporate Long Term
Financing Decisions
Student Preparation
Financial Management, 9e, I. M. Pandey, Ch 20: Long
Term Finance: Shares, Debentures and Term Loans (432-
443)
Cases
Suzlon Energy: Financing Problems
Reliance ‘Power’ful IPO
Hindalco’s Rights Issue: India’s Largest Rights Issue Fiasco
Tata Steel’s External Commercial Borrowings: The Payoffs
 Corporate Long Term Financing
Learning Objectives
To understand the various financing options available
to run a business
To understand the advantages and disadvantages of
equity financing
To understand issues involved in public offering,
private placement, preferential allotment
To understand the issues involved in rights issue and
bonus issue
 Corporate Long Term Financing
Learning Objectives
To understand the advantages and disadvantages of
debt financing
To understand the important features of debentures
in India
To understand the important features of term loans
and deferred credit in India
 Suzlon Energy: Financing Problems
Learning Objectives

To understand the various financing options available

to run a business
To understand the nature of business of Suzlon and to
reflect upon various funding requirements through its
growth phase
To evaluate the reasons for the current crisis in Suzlon
To analyse the various options available for Suzlon to
come out of the liquidity crisis
 Reliance ‘Power’ful IPO
Learning Objectives
To understand the various methods of raising capital
To scrutinise the pricing issue involved in public
offering and highlight the difference between public
issue and private placement
To understand the public offering in the Indian
context and bring out the pros and cons of raising
capital via IPO.
 Hindalco’s Rights Issue:
India’s Largest Rights Issue Fiasco
Learning Objectives
To understand the efficacy and operating dynamics of
a rights issue and weigh the merits of this source of
finance vis-à-vis other sources of finance
To discuss and deliberate on the modalities of
Hindalco’s rights issue and debate on its mode of
financing its acquisition
To analyse the reasons for Hindalco’s rights issue
being undersubscribed and debate on what could have
prevented such a situation.
 Tata Steel’s External Commercial
Borrowings: The Payoffs
Learning Objectives
To understand the need and importance of ECBs and
its merits over other available fund raising options
To assess the potential of ECBs for funding foreign
acquisitions
To assess the efficacy of Tata Steel’s ECBs in the light
of its expansion efforts.