Professional Documents
Culture Documents
CHAPTER 1
INTRODUCTION
The "sell side" involves trading securities for cash or for other securities
(e.g. facilitating transactions, market-making), or the promotion of
securities (e.g. underwriting, research, etc.).
The "buy side" involves the provision of advice to institutions concerned
with buying investment services. Private equity funds, mutual funds, life
insurance companies, unit trusts, and hedge funds are the most common
types of buy side entities.
An investment bank can also be split into private and public functions with an
information barrier which separates the two to prevent information from
crossing. The private areas of the bank deal with private insider information
that may not be publicly disclosed, while the public areas such as stock analysis
deal with public information.
An advisor who provides investment banking services in the United States must
be a licensed broker-dealer and subject to Securities & Exchange Commission
(SEC) and Financial Industry Regulatory Authority (FINRA) regulation.
DEFINITION
'Investment Banking
In addition to the services listed above, investment banks also aid in the sale of
securities in some instances. They also help to facilitate mergers and
acquisitions, reorganizations and broker trades for both institutions and private
investors. They can also trade securities for their own accounts.
CHAPTER 2
JP Morgan
1896-1929
Prior to the great depression, investment banking was in its golden era, with the
industry in a prolonged bull market. JP Morgan and National City Bank were
the market leaders, often stepping in to influence and sustain the financial
system. JP Morgan (the man) is personally credited with saving the country
from a calamitous panic in 1907. Excess market speculation, especially by
banks using Federal Reserve loans to bolster the markets, resulted in the market
crash of 1929, sparking the great depression.
1929-1970
During the Great Depression, the nations banking system was in shambles,
with 40% of banks either failing or forced to merge. The Glass-Steagall Act (or
more specifically, the Bank Act of 1933) was enacted by the government with
the intent of rehabilitating the banking industry by erecting a wall between
commercial banking and investment banking. Additionally, the government
sought to provide the separation between investment bankers and brokerage
services in order to avoid the conflict of interest between the desire to win
investment banking business and duty to provide fair and objective brokerage
services (i.e., to prevent the temptation by an investment bank to knowingly
peddle a client companys overvalued securities to the investing public in order
to ensure that the client company uses the investment bank for its future
underwriting and advisory needs). The regulations against such behavior
became known as the "Chinese Wall.
1970-1980
In light of the repeal of negotiated rates in 1975, trading commissions collapsed
and trading profitability declined. Research-focused boutiques were squeezed
out and the trend of an integrated investment bank, providing sales, trading,
research, and investment banking under one roof began to take root. In the late
70s and early 80s saw the rise of a number of financial products such as
derivatives, high yield an structured products, which provided lucrative returns
for investment banks. Also in the late 1970s, the facilitation of corporate
mergers was being hailed as the last gold mine by investment bankers who
assumed that Glass-Steagall would someday collapse and lead to a securities
business overrun by commercial banks. Eventually, Glass-Steagall did crumble,
but not until 1999. And the results werent nearly as disastrous as once
speculated.
1980-2007
In the 1980s, investment bankers had shed their stodgy image. In its place was a
reputation for power and flair, which was enhanced by a torrent of mega-deals
during wildly prosperous times. The exploits of investment bankers lived large
even in the popular media, where author Tom Wolfe in Bonfire of the
Vanities and movie-maker Oliver Stone in Wall Street focused on
investment banking for their social commentary. Finally, as the 1990s wound
down, an IPO boom dominated the perception of investment bankers. In 1999,
an eye-popping 548 IPO deals were done among the most ever in a single year
-- with most going public in the internet sector.
That trend began to change in the 1980s as a new focus on trading propelled
firms such as Salomon Brothers, Merrill Lynch and Drexel Burnham Lambert
into the limelight. Investment banks earned an increasing amount of their profits
from proprietary trading. Advances in computing technology also enabled banks
to use more sophisticated model driven software to execute trades and generate
a profit on small changes in market conditions.
In the 1980s, financier Michael Milken popularized the use of high yield debt
(also known as junk bonds) in corporate finance and mergers and acquisitions.
This fueled a boom in leverage buyouts and hostile takeovers (see History of
Private Equity). Filmmaker Oliver Stone immortalized the spirit of the times
with his movie, Wall Street, in which Michael Douglas played the role of
corporate raider Gordon Gekko and epitomized corporate greed.
Investment banks profited handsomely during the boom years of the 1990s and
into the tech boom and bubble. When the tech bubble burst, it precipitated a
string of new legislation to prevent conflicts of interest within investment banks.
Investment banking research analysts had been actively promoting stocks to
investors while privately acknowledging they were not attractive investments. In
other instances, analysts gave favourable stock ratings to corporate clients in the
hopes of attracting them as investment banking clients and handling potentially
lucrative initial public offerings.
These scandals paled by comparison to the financial crisis that has enveloped
the banking industry since 2007. The speculative bubble in housing prices along
with an overreliance on sub-prime mortgage lending trigged a cascade of crises.
Two major investment banks, Bear Stearns and Lehman Brothers, collapsed
under the weight of failed mortgage-backed securities. In March, 2008, the
Federal government began using a variety of taxpayer-funded bailout measures
to prop up other firms. The Federal Reserve offered a $30 billion line of credit
to J.P. Morgan Chase to that it could acquire Bear Sterns. Bank of America
acquired Merrill Lynch. The last two bulge bracket investment banks, Goldman
Sachs and Morgan Stanley, elected to convert to bank holding companies and be
fully regulated by the Federal Reserve.
Moving forward, the recent financial crisis has weakened both the reputation
and the dominance of U.S. investment banking organizations throughout the
world. The growth of foreign capital markets along with an increase in pools of
sovereign capital is changing the landscape of the industry.
The growing international flow of capital has also opened up opportunities for
investment banking in new financial centers around the world, including those
in developing countries such as India, China and the Middle East.
The origin of investment banking in India can be traced back to the 19 th century
when European merchant banks set-up their agency houses in the country to
assist in the setting of new projects. In the early 20th century, large business
houses followed suit by establishing managing agencies which acted as issue
house for securities, promoters for new projects and also provided finance to
Greenfield ventures. The peculiar feature of these agencies was that their
services were restricted only to the companies of the group to which they
belonged. A few small brokers also started rendering Merchant banking
services, but theirs was limited due to their small capital base.
In 1967, ANZ Grind lays bank set - up a separate merchant banking division to
handle new capital issues. It was soon followed by Citibank, which started
rendering these services. The foreign banks monopolized merchant banking
services in the country. The banking committee, in its report in 1972, took note
of this with concern and recommended setting up of merchant banking
institutions by commercial banks and financial intuitions. State bank of India
ventured into this business by starting a merchant banking bureau in 1972. In
1972, ICICI became the first financial institution to offer merchant banking
services. JM finance was set-up by Mr. Nimesh Kampani as an exclusive
merchant bank in 1973. The growth of the industry was very slow during this
period. By 1980, the number of merchant banks rose to 33 and was set-up by
commercial banks, financial institutions and private sector. The capital market
witnessed some buoyancy in the late eighties. The advent of economic reforms
in 1991 resulted in sudden spurt in both the primary and secondary market.
Several new players entered into the field. The securities scam in may, 1992
was a major setback to the industry. Several leading merchant bankers, both in
bank financial services, SBI capital markets, Andhra bank financial services,
etc. leading private sector players involved in the scam included Fair growth
financial services and Champaklal investments and finance (CIFCO).
The market turned bullish again in the end of 1993 after the tainted shares
problem was substantially resolved. There was a phenomenal surge of activity
in the primary market. The registration norms with the SEBI were quite liberal.
The low entry barriers coupled with lucrative opportunities lured many new
entrants into this industry. Most of the new entrants were undercapitalized with
little or no expertise in merchant banking. These players could hardly afford to
be discerning and started offering their services to all and sundry clients. The
market was soon flooded with poor quality paper issued by companies of
dubious credentials. The huge losses suffered by investors in these securities
resulted in total loss of confidence in the market. Most of the subsequent issues
started failing and companies started deferring their plans to access primary
markets. Lack of business resulted in a major shake out in the industry. Most of
the small firms exited from the business. Many foreign investment banks started
entering Indian markets. These firms had a huge capital base, global distribution
capacity and expertise. However, they were new to Indian markets and lacked
local penetration. Many of the top rung Indian merchant banks, who had string
domestic base, started entering into joint ventures with the foreign banks. This
energy resulted in synergies as their individual strength complemented each
other.
CHAPTER 3
TYPES OF PLAYERS IN INVESTMENT BANKING
Full-
Service
Firms
Asset
Commerci
Managem
al Banks
ent Firms
Players in
Investmen
t Banking
Brokerage Boutique
Firms Firms
Full-Service Firms
These are type of investment banks who have significant presence in all
areas like underwriting, distribution, M&A, brokerage, structured
instruments, asset management etc. They are all rounder 0f the game.
Commercial Banks
Boutique Firms
Brokerage Firms
These firms offers only trading services to retail & institutional clients.
They have huge investor base which is also used by underwriters to place
issues.
CHAPTER 4
Technical Skill
Academic Background
In the early days of investment banking, not much importance was attached to
academic background. Today, the business has become very complicated and
the skill requirements have multiplied. Consequently, investment banks find it
important to recruit people with the right academic credentials. Typically, for
most of the important jobs, an MBA is a must. Investment banks rely heavily on
campus recruitments
Conceptual Soundness
Product Specialization
Legal Knowledge
While clear cut guidelines can be issued to the traders regarding their market
related activities that are governed by the law, the complexity multiplies for an
M&A deal. The regulators guidelines have to be strictly followed, even while
envisaging a combination. Legal knowledge is also important for structuring
such deals, which will help identify the constraints associated with proposed
solution. The situation gets more intense when the deal is a cross-border M&A
proposal. Apart from the knowledge of the inland laws, foreign laws also have
to be considered. Any regulation by the foreign government can make an
otherwise desirable deal, unviable.
More than any other industry, it is the investment banking industry that has a
direct bearing on the way capital markets function. Any changes in the capital
market regulations affect the brokerage side of the business, along with the trade
clearing and settlement houses. The trading personnel should be conversant with
the regulations, guidelines, procedural formalities and actual trade execution
processes involved in capital market. E.g. Trading system involves a lot of
additional skills than online trading. He has to be conversant with the codes,
symbols and conventions followed by the market. Quick signaling and accurate
interpretation are of utmost significance. Any mistake in these would lead to
faulty execution of orders and might entail additional costs to the firm in
correcting the errors.
One of the most important technical skills is the usage of computers, tools and
internet technologies. Marketing, brokerage, research and capital mobilization
have all undergone sweeping changes owing to technology.
The securities trader has changed into a tech-savvy professional, executing
online orders & maintaining databases. The technology helps management and
other departmental professionals and even the clients to disseminate such data in
negligible time. Asset managers have now complicated tools for scientific and
in-depth valuation of portfolios. Comp frameworks can be solved with
minimum effort using technology.
Communication Skills
Negotiation Skills
Personality Traits
Other Skills
Marketing Skill
Inter-Personal Skills
Networking Skills
CHAPTER 5
It was felt that a further strengthening of the criteria for registration of merchant
bankers was necessary, primarily through an increase in the net worth
requirements, so that the capital would be commensurate with the level of
activities undertaken by them. With this in view, the net worth requirement or
category I merchant bankers was raised in 1995-96 to Rs.5 crore. In 1996-96,
the SEBI (merchant bankers) regulations, 1992 were amended to require the
payment of fees for each letter of offer or draft prospectus that is filed with
SEBI.
Raising Capital
Mergers &
& Security
Acquisitions
Underwriting
CHAPTER 6
SCOPE OF INVESTMENT BANKS
There are four general types of public offerings: 1) Initial public offerings
(IPOs) of securities issued by companies that have never before issued any
public securities (normally common stock is the first security to be issued in an
IPO); 2) Initial public offerings of new securities that companies that are
already public have not before issued (e.g., a new class of convertible debt
security); 3) Further public offerings of securities that are already publicly
traded (e.g., the issuance of additional common stock when its price is
sufficiently high so that cost of capital is sufficiently low); 4) Public offerings
by company shareholders of securities that are already publicly traded (e.g.,
when an original large shareholder, say a private equity fund, wants to cash out
its position).In the past we could cleanly differentiate debt and equity securities
and put them into separate categories. Investment grade corporate bonds were
distinct from high-yield (junk) bonds. Today the old distinctions are fuzzy.
Debt and equity are more points on a continuum than boxes on a chart. Junior
subordinated zero-coupon convertible debentures can be thought more equity
than debt and dutch-auction preferred stock can be thought more debt than
equity. Geography, as well, is no longer a constraint: Companies can reach
anywhere in the world to lower their cost of capital.
This is the front-page stuff the huge acquisitions, takeover battles, hostile
attacks and fierce defences. But its not all war. The vast majority of M&As
are friendly. Investment bankers seek to optimize price and terms, so that the
best price may not be the highest price for client sellers (all cash or
confidence in closing may be more important) nor the lowest price for client
buyers (certainty of getting the deal done may be more vital). Investment banks
find, facilitate, price, and finance mergers and acquisitions. Also included in
M&A are leverage buyouts by private equity, the restructuring and
recapitalization of companies, and the reorganization of troubled companies.
Fairness Opinions
Risk Management
Merchant Banking
Finance / Securitization
Wealth Management
Alternative Investments
Brokers are commissioned agents who represent either buyers or sellers and
work much as do real estate agents; they carry no securities in inventory and
therefore assume no risk in price variation or interest-charge. Dealers set bid-
and-ask prices for each security they offer for trade; by maintaining an
inventory of securities, dealers assume a price risk since the market may go up
or down during the time they hold the securities. Market Makers establish (and
support) the entire market for a security on either side of a transaction. Brokers
and dealers are regulated by the various exchanges of which they are members
and the National Association of Securities Dealers (NASD), which is the self-
regulating organization to which they all belong.
CHAPTER 7
CORE INVESTMENT BANKING ACTIVITIES
I. FRONT OFFICE
Markets are then split into further divisions; sales, trading, some research and
also structuring. Though the average investment banker will make considerably
more than the average trader, the best trader will make significantly more than
the best investment banker.
INVESTMENT BANKING
On behalf of the bank and its clients, a large investment bank's primary
function is buying and selling products. In market making, traders will buy
and sell financial products with the goal of making money on each trade. Sales
is the term for the investment bank's sales force, whose primary job is to call
on institutional and high-net-worth investors to suggest trading ideas (on a
caveat emptor basis) and take orders. Sales desks then communicate their
clients' orders to the appropriate trading desks, which can price and execute
trades, or structure new products that fit a specific need. Structuring has been a
relatively recent activity as derivatives have come into play, with highly
technical and numerate employees working on creating complex structured
products which typically offer much greater margins and returns than
underlying cash securities. In 2010, investment banks came under pressure as a
result of selling complex derivatives contracts to local municipalities in Europe
and the US. Strategists advise external as well as internal clients on the
strategies that can be adopted in various markets. Ranging from derivatives to
specific industries, strategists place companies and industries in a quantitative
framework with full consideration of the macroeconomic scene. This strategy
often affects the way the firm will operate in the market, the direction it would
like to take in terms of its proprietary and flow positions, the suggestions
salespersons give to clients, as well as the way structures create new products.
Banks also undertake risk through proprietary trading, performed by a special
set of traders who do not interface with clients and through "principal risk"
risk undertaken by a trader after he buys or sells a product to a client and does
not hedge his total exposure. Banks seek to maximize profitability for a given
amount of risk on their balance sheet. The necessity for numerical ability in
sales and trading has created jobs for physics, computer science, mathematics
and engineering Ph.D.s who act as quantitative analysts.
B.COM (FINANCIAL MARKETS) 35 | P a g e
M.D.COLLEGE TYFM INVESTMENT BANKING
RESEARCH
The equity research division reviews companies and writes reports about their
prospects, often with "buy" or "sell" ratings. Investment banks typically have
sell-side analysts which cover various industries. Their sponsored funds or
proprietary trading offices will also have buy-side research. While the research
division may or may not generate revenue (based on policies at different
banks), its resources are used to assist traders in trading, the sales force in
suggesting ideas to customers, and investment bankers by covering their
clients. Research also serves outside clients with investment advice (such as
institutional investors and high net worth individuals) in the hopes that these
clients will execute suggested trade ideas through the sales and trading
division of the bank, and thereby generate revenue for the firm. Research also
covers credit research, fixed income research, macroeconomic research, and
quantitative analysis, all of which are used internally and externally to advise
clients but do not directly affect revenue. All research groups, nonetheless,
provide a key service in terms of advisory and strategy. There is a potential
conflict of interest between the investment bank and its analysis, in that
published analysis can affect the bank's profits.
RISK MANAGEMENT
Risk management involves analyzing the market and credit risk that an
investment bank or its clients take onto their balance sheet during transactions
or trades. Credit risk focuses around capital markets activities, such as loan
syndication, bond issuance, restructuring, and leveraged finance. Market risk
conducts review of sales and trading activities utilizing the VaR model and
provides hedge-fund solutions to portfolio managers. Other risk groups include
country risk, operational risk, and counterparty risks which may or may not
exist on a bank to bank basis. Credit risk solutions are key part of capital
market transactions, involving debt structuring, exit financing, loan
amendment, project finance, leveraged buy-outs, and sometimes portfolio
hedging. Front office market risk activities provide service to investors via
derivative solutions, portfolio management, portfolio consulting, and risk
advisory. Well-known risk groups in JPMorgan Chase, Goldman Sachs and
Barclays engage in revenue-generating activities involving debt structuring,
restructuring, loan syndication, and securitization for clients such as corporate,
governments, and hedge funds. J.P. Morgan IB Risk works with investment
banking to execute transactions and advise investors, although its Finance &
Operation risk groups focus on middle office functions involving internal, non-
revenue generating, operational risk controls. Credit default swap, for
instance, is a famous credit risk hedging solution for clients invented by J.P.
Morgan's Blythe Masters during the 1990s.The Loan Risk Solutions group
within Barclays' investment banking division and Risk Management and
Financing group housed in Goldman Sach's securities division are client-driven
franchises. However, risk management groups such as operational risk, internal
risk control, legal risk, and the one at Morgan Stanley are restrained to internal
business functions including firm balance-sheet risk analysis and assigning
trading cap that are independent of client needs, even though these groups may
B.COM (FINANCIAL MARKETS) 37 | P a g e
M.D.COLLEGE TYFM INVESTMENT BANKING
be responsible for deal approval that directly affects capital market activities.
Risk management is a broad area, and like research, its roles can be client-
facing or internal.
This area of the bank includes treasury management, internal controls, and
internal corporate strategy.
Financial control tracks and analyzes the capital flows of the firm the
finance division is the principal adviser to senior management on
essential areas such as controlling the firm's global risk exposure and the
profitability and structure of the firm's various businesses via dedicated
trading desk product control teams. In the United States and United
Kingdom, a financial controller is a senior position, often reporting to
the chief financial officer. Internal corporate strategy tackling firm
management and profit strategy, unlike corporate strategy groups that
advise clients, is non-revenue regenerating yet a key functional role
within investment banks.
This list is not a comprehensive summary of all middle-office functions
within an investment bank, as specific desks within front and back
offices may participate in internal functions.
OPERATIONS
TECHNOLOGY
OTHER BUSINESSES
ORGANIZATIONAL STRUCTURE
Investment banking is split into front office, middle office, and back
office activities. While large service investment banks offer all lines of
business, both "sell side" and "buy side", smaller sell-side investment
firms such as boutique investment banks and small broker-dealers focus
on investment banking and sales/trading/research, respectively.
CHAPTER 8
INDUSTRY PROFILE
There are various trade associations throughout the world which represent the
industry in lobbying, facilitate industry standards, and publish statistics. The
International Council of Securities Associations (ICSA) is a global group of
trade associations.
In the United States, the Securities Industry and Financial Markets Association
(SIFMA) is likely the most significant; however, several of the large
investment banks are members of the American Bankers Association
Securities Association (ABASA)[13] while small investment banks are
members of the National Investment Banking Association (NIBA).
Global investment banking revenue increased for the fifth year running in
2007, to a record US$84.3 billion, which was up 22% on the previous year and
more than double the level in 2003. Subsequent to their exposure to United
States sub-prime securities investments, many investment banks have
experienced losses. As of late 2012, global revenues for investment banks were
estimated at $240 billion, down about a third from 2009, as companies pursued
less deals and traded less. Differences in total revenue are likely due to
different ways of classifying investment banking revenue, such as subtracting
proprietary trading revenue.
The United States generated 46% of global revenue in 2009, down from 56%
in 1999. Europe (with Middle East and Africa) generated about a third while
Asian countries generated the remaining 21%. The industry is heavily
concentrated in a small number of major financial centers, including City of
London, New York City, Frankfurt, Hong Kong and Tokyo.
Revenues have been affected by the introduction of new products with higher
margins; however, these innovations are often copied quickly by competing
banks, pushing down trading margins. For example, brokerages commissions
for bond and equity trading is a commodity business but structuring and
trading derivatives has higher margins because each over-the-counter contract
has to be uniquely structured and could involve complex pay-off and risk
profiles. One growth area is private investment in public equity (PIPEs,
otherwise known as Regulation D or Regulation S). Such transactions are
privately negotiated between companies and accredited investors.
CHAPTER 9
TOP 10 BANKS
List of investment banks
The ten largest investment banks as of are as follows (by total fees from all
advisory). The list is just a ranking of the advisory arm of each bank and does
not include the generally much larger portion of revenues from sales and
trading and asset management.
Rank Bank Name Founded Headquarter Revenue
1 J.P. Morgan & 2000 270 Park Avenue, Manhattan, New US$ 94.20 billion
Co. York, New York, U.S.
2 Bank of 2009 Bank of America Tower, New US$ 85.11 billion
America York City, United States
Merrill Lynch
3 Goldman 1869 200 West Street, New York, New US$ 40.08 billion
Sachs York, U.S.
4 Morgan 1935 Morgan Stanley Building, New US$ 34.3 Billio
Stanley York City, New York, U.S.
5 Citigroup 1812 399 Park Avenue, Manhattan, New US$ 76.88 billion
York City, New York, U.S.
6 Deutsche 1870 Deutsche Bank Twin Towers, EUR 31.95 billion
Bank Taunusanlage 12 Frankfurt
Hesse, Germany
7 Credit Suisse 1856 Paradeplatz 8 Zurich, Switzerland CHF 25.22 billion
8 Barclays 1690 Canary Wharf, London, United EUR 25.288
Kingdom billion
9 Wells Fargo 1852 San Francisco, California, U.S. US$ 84.3 billion
10 UBS 1854 Bahnhofstrasse 45 Zrich, CHF63.526 billion
Switzerland
World's biggest banks are ranked for M&A advisory, syndicated loans, equity
capital markets and debt capital markets.
The Financial Times, The Wall Street Journal and Bloomberg often cover
mergers and acquisitions and capital markets. League tables are also available:
CHAPTER 10
FINANCIAL CRISIS OF 2008
The 2008 financial credit crisis led to the notable collapse of several banks,
notably including the bankruptcy of large investment bank Lehman Brothers
and the hurried sale of Merrill Lynch and the much smaller Bear Stearns to
banks which effectively rescued them from bankruptcy. The entire financial
services industry, including numerous investment banks, was rescued by
government loans through the Troubled Asset Relief Program (TARP).
Surviving U.S. investment banks such as Goldman Sachs and Morgan Stanley
converted to traditional bank holding companies to accept TARP relief. Similar
situations occurred across the globe with countries rescuing their banking
industry. Initially, banks received part of a $700 billion TARP intended to
stabilize the economy and thaw the frozen credit markets. Eventually, taxpayer
assistance to banks reached nearly $13 trillion, most without much scrutiny,
lending did not increase and credit markets remained frozen.
The crisis led to questioning of the business model of the investment bank
without the regulation imposed on it by Glass-Steagall. Once Robert Rubin, a
former co-chairman of Goldman Sachs, became part of the Clinton
administration and deregulated banks, the previous conservatism of
underwriting established companies and seeking long-term gains was replaced
by lower standards and short-term profit. Formerly, the guidelines said that in
order to take a company public, it had to be in business for a minimum of five
years and it had to show profitability for three consecutive years. After
deregulation, those standards were gone, but small investors did not grasp the
full impact of the change.
CHAPTER 11
MAJOR INVESTMENT BANKS IN INDIA
Bajaj Capital
Barclays India
Barclays unveiled its Global Retail and Commercial Banking division in India
over the past year as part of its plan to be a leading global bank. In a very short
time, Barclays is already making waves in one of the worlds fastest growing
countries.
web site url: http://www.barclays.in
A subsidiary of ICICI Bank the largest and most recognized private bank in
India ICICI Securities Ltd is premier Indian Investment Bank, with a dominant
position in its core segments of its operations Corporate Finance including
Equity Capital Markets Advisory Services, Institutional Equities, Retail and
Financial Product Distribution.
Website url: http://www.icicisecurities.com/
ICRA Limited
IDFC
IDFC Private Equity (IDFC PE) was set up in 2002 as a 100% subsidiary of
the Infrastructure Development Finance Company (IDFC). IDFC PE manages
two funds with a current corpus of INR 1,734 crore (USD 400 million). India
Development Fund and IDFC Private Equity Fund II. Both these funds provide
growth capital to promising enterprises in the area of infrastructure in India.
web site url: http://www.idfcpe.com/
IFCI, the first Development Finance Institution in India, was set up in 1948, as
a Statutory Corporation, to pioneer institutional credit to medium and large
industries IFCI was also the first institution in the financial sector to be
converted into a Public Limited Company. IFCIs record of performance has
broadly run parallel to the course of industrial and economic development of
the nation. IFCIs principal operations include Project financing, Financial
services & Comprehensive corporate advisory services web site url:
http://www.ifciltd.com/
SBI Capital Markets Ltd. is amongst the oldest players in the Indian Capital
Market, offering an entire range of Investment Banking Services. With strong
fund mobilization strengths, we are one of the leading players in the areas of
fund raising through Capital Market Issues / Private Placement.
web site url: http://www.sbicaps.com/
Yes Bank
SSKI Group
CHAPTER 12
ROLE/CHALLANGES OF INVESTMENT BANKING
COMPANISE IN INDIA
About a couples of years back, when a world economy was reeling under a
recession, many investment banking either collapsed or were on the brink of
closure. Even a few firms in India were affected by this global downturn. This
led to many skeptices writing off the revival of those firms.
CHALLENGES
For example, trading bonds and equities for customers is now a commodity
business structuring and trading and trading derivatives retains margins in good
times and the risk of large losses in difficult market conditions, such as the
credit crunch that begin in 2007. Each over-the-counter contract has to be
uniquely structured and could involve complex pay-off and risk profiles.
CHAPTER 13
Investment banking has always been very crucial for smooth flow of market
transaction between various investors, companies, firms and the government.
These banks will have a role to play even in future, irrespective of the
economic conditions in the country.
1.Claw-backProvisions
In order to make the volatile market of investment banking more secured from
crashes caused by imprudent individual traders or groups, banks may tighten
up the claw-back provisions. This provision requires those whose trades cause
subsequent losses, to pay back all or part of their bonuses. However, this might
result in the transition of traders from big names to less well-known boutiques,
in order to avoid scrutiny.
As the giant investment banks faced heavy losses, which in turn affected the
government and investors, in future there will be fewer big banks and more
boutiques. This will force the big shot investment banks to be careful about
their position, as they will face stiff competition from small firms. In any case,
the charm of investment banks is something which will not decrease in near
future.
CHAPTER 14
CONCLUSION
The investment banker plays a vital role in channelizing the financial surplus
of the society into productive investment avenues. Hence before selecting a
investment banker, one must decide what the services for which he is being
approached are. Selecting the right Intermediary who has the necessary skills
to meet the requirements of the client will ensure success.
It can be said that this project helped me to understand every details about
Investment Banking and in future how its going to get emerged in the Indian
economy. Hence, Investment Banking can be considered as essential financial
body in Indian financial system.
CHAPTER 15
BIBLIOGRAPHY
WEBILOGRAPHY
www.economictimes.com
www.wikipedia.com
www.sebi.com
www.managementparadise.com
www.scribd.com
www.indiastat.com
www.jpmorgan.com
www.wallstreetprep.com/knowledge/about-investment-banking
www.investopedia.com
www.morganstanley