FUTURE OF INDAIN FINANCIAL SERVICES

Overall the world economy is approx. to 60 trillion dollar, out of these, 32 trillion dollar (USA 16 T.D.
EUROPE 7 T.D. UNITED KINGDOM 4 T.D AND JAPAN 6 T.D) worth of economy is passing through
recessionary phase, off late China has also shown a slowdown which means 10 T.D of economy and God
forbids if it lands up into massive slowdown or early phase of recession it would mean that there is crisis
in financial market.

Amidst, all these happening in the financial market thankfully India is growing at a very decent phase,
thanks to growing consumption and production story of Indian Economy. As seen in these recession
period across the world the prices of oil crashing to $30 a barrel and crashing of metal prices fairly a bit
means that there is no massive demand in those economy and this has created a grim situation across
the financial market.

Generally recession means, falling of the production, in those economy as majority of the population are
dependent and not young to ideally demand or to help in production processes. This as a whole scenario
has led to big opportunities in Indian economy for which our honourable PM Mr. MODI has been
projecting and propagating a concept known as MAKE IN INDIA.

Make in India requires three things:

1. Money/Capital (less)
2. Resources (less)
3. Labour (plenty)

Money / Capital can flow in two types firstly, in form of equity that means share capital that means
equity investment. And equity investment can come in the form of FII and similarly as FDI. This Equity
investment is required by corporate sector (Tata, Birla, reliance etc. they all require investment in form
of equity investment), second midsize corporate and thirdly small and medium enterprises i.e. SMEs
they all require equity investment.

As a result of Make in India, massive fund flow will happen in equities and bonds.

Bond market is yet to flourish in India, because there is less of trade ability or less of liquidity in the
bond market , but the govt. SEBI and other regulatory are taking so much of the pain to develop this
bond market because this is one of the massively growing markets in the world and it will happen in
Indian economy as well for which lots many steps has been taken across which means in the times to
come equity market along with the bond market will have massive growth and growth in the profile are
as follows [slide 6].

MERCHANT BANKING

Examples SBI Capital, HDFC Capital, these helps in raising the money in form of IPOs/ FPO (initial public
offering). Whole processes require book binding process in which book has to build in terms of cut of
price, what should be the bond prices for issuing the shares or debenture or bond the IPOs and FPO
pricing and then stock listing for the SMEs and corporate in the relevant stock exchange and relevant
bond exchange. Presently we have liquid stock exchange but in times to come there will be massive
opportunities in bond exchange as well.

FINANCING

All the corporates whether it is big corporates or mid-size corporates or SMEs they all require money.
And one of the ways to get money is IPOs/FPO that is to raise money from common public.

SMEs in India is one of the massive growing field, have realised they have to raise money from public so
they can build up reputation in market. Ideally SMEs wants to grow in size. A lot many SMEs require
private equity so that they can rise in their life however the massive challenge for the private equity or
the venture capital coming from abroad investing on SMEs is ideally how to exit, i.e. if I have invested in
SMEs and I have to exit, my exit options is only to get this company listed in the exchange so that I can
sell my shares to the common public, so ultimately this SMEs has to get listed so that private equity
player can get exit route that means SMES getting listed is in things. And this growing in leaps and
bounds. BSE has already set BSE-SME Exchange and a lot of steps have been taken so that more and
more SMES can be listed on these exchange.

INVESTMENT BANKING

Massive money coming in the form of private equity venture capital will lead to more of merger
equations which will further leads to dynamic profile which will lead to a lot of equity research. They
hire resources that can do a lot of researches on equity of company irrespective of small, midsize or
large corporates.

Secondly, valuation; before investing in company we should know value of the company so this is one of
the big growing profiles. Third profile is modelling which can include financial modelling, risk modelling,
merger modelling, acquisition modelling are big big profiles, coming up and thanks to this massive
opportunities.

Next is the big E portfolios and the fund management. Every big company, SMES every big investors
needs his funds to be managed. Company like ADELE WISE etc. have been managing funds of big big
companies saying in billions and billions of dollar. For doing so they need resources with good education
that can handle the funds and port folios of this companies.

Thankyou

Kushagra Verma

MBA (Fin) Class of 2020