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INTRODUCTION
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Investment Banking
is bright with scope for merchant banks to convert themselves into
investment banks. Much of the investment banking in its present form,
thus owes its origins to the financial market in U.S.A due to which,
American investment banks have been leader in the American & Euro
market as well. Therefore, the term ‘investment banking’ can be said to
be American origin. Their counterparts in U.K were termed as ‘merchant
banks’ since they had confined themselves to capital market
intermediation until the U.K & European markets & extended the scope
of such businesses.
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STRUCTURE OF INDIAN INVESTMENT BANKING INDUSTRY
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- The Indian investment banking industry has a heterogeneous structure.
The bigger investment banks have several group entities in which the
core & non- core business segments are distributed. Others have either
one or more entities depending upon the activity profile. The
heterogeneous & fragmented structure even if Indian investment banks
are classified on the basis of their activity profile. Some of such as-
SBI,IDBI, ICICI, IL & FS, Kotak Mahindra, Citibank & other offer
almost whole of investment banking services permitted in India. Among
these, the long term financial institutions transforming themselves into
full service universal banks. They also have full service investment
banking under their fold. Other entities such as NBFCs or subsidiary of
public sector banks mainly offer merchant banking & corporate advisory
services. There are also several others who are providing only corporate
advisory services but prefer to hold merchant banking or underwriting.
- Presently, there are no global Indian investment banks although there is
a number of investment banks in India that have some overseas presence
to serve Indian issuers & their investors. At the middle level are several
niche players including the merchant banking subsidiaries of some public
sectors banks. Some of these subsidiaries have been either shut down or
sold off in the wake of the securities scams.
- However certain banks such as Canara Bank & Punjab National Bank
have had successful merchant banking activities. Among the middle level
players are also merchant banks structured as non- banking financial
services companies such as Rabo India Finance Ltd., Alpic Finance etc.
There are also in the middle level, some pure advisory firms such as-
Lazard Capital, Ernst & Young, KPMG, Price waterhouse coopers etc. At
the lower end are several niche players & boutique firms, which focus on
one or more segments of the investment banking spectrum.
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POTENTIAL FOR INVESTMENT BANKING IN INDIA
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SERVICE PORTFOLIO OF INVESTMENT BANKS
Wide & narrow geographical presence like global & local firms.
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in USA. SEBI vide its guidelines dated June 11, 1992 introduced free
pricing of securities in public offers for the first time in India. The
purpose of this law is to require security issuers to fully disclose all
information that affects the value of their securities. Over the last ten
years, there have been two distinct phases of primary market boom- the
first between 1992-1996 & the second between 1998-2001. The third
wave of the primary market issuers could be shape up in near future. This
market is very closely regulated by SEBI. In the days when the public
offers market is very vibrant, this area of service forms the main activity
for investment banks. In the past few years, through public offers have
been very few, the private placement market, especially in the debt
segment have been very active & has served as an important source of
funds for prime rated corporate. Once the private placement markets also
come under regulatory stipulations, investment banks would have a wider
role to play in such issuances.
The merger & acquisitions industry was pretty nascent in India prior to
1994 & continues to be tiny compared to the global scale transactions.
However, two main factors that given below given a big push to this
industry are:
The forces of liberalization & globalization that have forced the Indian
industry to consolidate.
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M&A, other valid merchant banking licences from SEBI also manage the
open offers arising out of such corporate events.
The investment bankers play the role of an advisor in M&A deal. The
financing capability of the investment banks is beginning to play a crucial
role in securing the goal. Those firms that have networks with banks &
other financial institutions & thereby can provide finance or have
necessary resources to finance the deal themselves a better chance of
success of deal. Investment banks thus helps in finding a buyer/seller, in
working out the terms of the transaction, financing the structure,
arranging bridge loans. It is necessary that the M&A group keep a close
watch on the various industries, companies in order to identify the
potential M&A candidate. Similarly, close relationship with the securities
research people, traders also help to identify the companies vulnerable to
takeovers. The task of doing M&A deals begins with analyzing &
structuring the transaction. This comprises of analyzing the companies
that offer attractive strengthening or diversification possibilities & then
which among these could be purchased. The M&A group will value the
prospect companies & estimate what price will have to be paid to acquire
them. Once the target for the merger or acquisition is identified, the banks
would advice the firms on how to approach for that. Financing is the final
aspect in structuring an M&A. The form of financing includes cash,
common stocks, preferred stocks or debt or convertible securities. When
these negotiations reach to a point agreement, the investment banks of the
parties must ensure that all the regulatory & legal aspects of the deal are
complied with. Thus investment bankers act as chain for companies.
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Put major trades together by negotiating with the salespeople, client &
the other dealers.
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segments of secondary market. In addition several other investment banks
such ad JM Morgan Stanley, DSP Merrill Lynch have a strong presence
in this area of activity. In the past few years, the derivative segment has
been introduced in the Indian capital market & this provides an additional
avenue of specialization for investment banks. Derivative trading, & risk
management & structured product offerings are the new segments that are
fast becoming the areas of future potential for Indian Investment banks.
The securities business also provides extensive research offerings &
guidance to investors. The secondary market services cater to the both the
institutional & non- institutional investors.
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In the present scenario, the financing needs are immense for both
corporates & governments, while the investment managers are constantly
on the lookout for optimal allocation of funds for optimal Returns. The
link between the two is filled by investment banks, in particular, by the
sales & Distribution operations. Sales & Distribution bring together the
primary issuers & secondary sellers with the buyer of the instruments.
These could be equity, fixed income instruments.
In general, there could be two product categories:
Retail segment
Institutional segment
Retail segment
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Research
Equity Research
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Fixed-income research
Institutional investing
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Corporate Advisory
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other investment banks which can do so upto 20 times their net owned
fund.
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The business of venture capital & private equity by such funds that are
incorporated in India is regulated by the SEBI(venture capital)
Regulations,1996 & by those that are incorporated outside India is
regulated under the SEBI ( Foreign venture capital funds)
Regulations,2000.
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Technical Skill
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products that would suit their risk profile should be identified. The
clients will also feel at home while dealing with a product specialist.
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involved. A thorough knowledge of all such bodies is absolutely
essential to perform extraordinarily. In India, the SEBI & central bank
acts as a watchdog and regulator of market related activities.
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Communication Skills
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clients & team members. It is essential when solutions are to be
identified for complex problem. Innovations & creativity are required
structure deals.
Other Skills
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• Highest standards of professionalism.
Banks &
Financial
Investment
Institutions
(financial
economy)
Capital Market /
Money Market
(financial
economy)
Foreign
Exchange Market
Production of
(financial
Investors Investment Business activity goods and
economy)
(generate Bankers services (real
savings) economy)
Commodity
futures Market
(financial
economy)
Real Estate /
Gold etc (real
economy)
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EXPLANATION
3) Business Activity: All these investments from the investors will lead
to business activity in different sectors. The funds deployed by the
investors will be utilized by the users of the deployed funds will lead
production of goods and services in the economy.
4) Twin Advantage: The investors will not only earn returns, capital
appreciation etc but also they will utilize the goods and services
produced by the users of the deployed funds. This will in return create
satisfaction in the minds of consumer/investor and will also earn
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profits for the user of the funds because of utilization of goods and
services.
This will be a win-win factor and also will develop the economy as a
whole.
CASE -STUDY
INTRODUCTION
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.The portfolio Management Services provide top class service, catering to
the high end of the market. Portfolio Management from Kotak Securities
comes as an answer to those who would like to grow exponentially on the
crest of the stock market, with the backing of an expert.
Institutional Business
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Kotak Securities has a comprehensive retail distribution network,
comprising approximately 7000 agents, 13 branches and over 20
franchisees across India. This network is used for the distribution and
placement of a range of financial products that includes company fixed
deposits, mutual funds, Initial Public Offerings, secondary debt and
equity and small savings schemes.
Depository Services
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Once you invest with Kotak Securities, you can enjoy access to a wide
range of products and services to help you make the most of your
investments.
Easy Equity: Want your capital to appreciate fast? Invest in Easy Equity.
a) Sms Alerts
b) Call & Trade
c) Top Gainers and Losers notification
d) Super multiple
e) Portfolio Tracker
Easy Derivatives: The higher your risk, the greater the returns on your
investments.
a) Put Call ratios
b) Top value traded
c) Open interest
d) Stock future/Stock options
Easy Insurance: Secure your future and your family’s. There’s more to
insurance than just security.
a) How does the plan work?
b) Advantages of the plans
c) Eligibility
d) Other Benefits
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ACCOUNT TYPES
If you are new to trading, Kotak Securities opens the gateway to a world
of investing opportunities for you - online and on-phone. Their in-depth
research will guide you in making smart investment decisions. Open the
Kotak Securities Gateway Account and get started.
Your Benefits:
⇒ Kotak Securities Knowledge Center that helps you learns more
about stock markets and investments.
⇒ Enjoy higher returns by investing early - through Easy IPO.
⇒ Research Reports on the economy, select industries and
companies help you make informed investment decisions while
dealing in Easy Equity.
⇒ Research advice via Kotak Securities SMS alerts, so you don't
miss out on important buying and selling opportunities.
⇒ Buy and sell stocks on phone using Call & Trade.
⇒ Access to 14 top-performing mutual funds through Easy Mutual
Fund.
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How to activate?
You can activate Kotak Securities Gateway with any amount between Rs
20,000 to 5, 00,000/- as margin. This can be in form of cash deposit or
the value of the shares you buy.
Step 2: They will inform you as soon as your account is activated, and
you can start trading instantly
⇒ This procedure is common for all accounts.
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Your benefits:
⇒ Kotak Securities Knowledge Center that helps you learn more
about stock markets and investments.
⇒ Their Research Reports on the economy, select industries and
companies help you make informed investment decisions while
dealing in Easy Equity.
⇒ Buy and sell stocks on phone using Call & Trade.
⇒ Invest in IPO’s with Easy IPO.
⇒ Access to 14 top-performing mutual funds through Easy Mutual
Funds.
⇒ Research advice via Kotak Securities SMS alerts, so you don't
miss out on important market movements.
⇒ Free news and market updates.
⇒ The facility to trade in amounts 5 times greater than your
capital.
⇒ Lower delayed payment interest.
⇒ Access to K.E.A.T Desktop - specialised financial software that
makes trading easier.
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How to activate?
You can activate Kotak Securities Value with any amount between Rs.
5, 00,000/- and Rs. 10, 00,000/- as margin. This can be in form of cash
deposit or the value of the shares you would have currently.
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Kotak Securities offer you nothing but the best. At Kotak Securities, they
make sure you get to enjoy premier and top-line trading services - with
Kotak Securities Privilege Circle
Your benefits:
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How to activate?
You can activate Kotak Securities Privilege Circle with any amount more
than Rs. 10, 00,000/- as margin, by way of cash or stock
Kotak High Trader Account:
For daily traders, they have the Kotak Securities High Trader exposure -
an account specially designed for intra-day traders. This is an Auto
Square Off product where you can enjoy the benefits of intra-day trading.
All open orders will be automatically squared off at 3.10 pm.
Your benefits:
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How to activate?
You can activate Kotak Securities High Trader with any amount less than
Rs 5, 00,000/- as margin, by way of cash or stock.
Your benefits:
How to activate?
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You can activate Kotak Securities Freeway with any amount less than Rs.
1, 25,000/- as margin, by way of cash or stock.
You need to plan to protect yourself and your family against financial
risks. Sure, no financial planner can protect you from the risks you face in
life. But good financial planning can protect you from suffering the
financial loss that may result when any of those risks become reality.
Step 1: Sound financial planning can help you chart a clear course to your
retirement goals. So no matter whether you're just starting out or
approaching the end of your career, Kotak Securities provides you with
comprehensive planning and support.
Step 2: Plan taxes as ongoing process and not a one-time event. Good
planning will increase your after-tax cash flows, and may mean greater
savings during tax time.
Step 3: Make your money work smarter and harder. Get higher returns
from your investments. Here's how.
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Say if you were to invest Rs. 100. Tax-saving schemes like Post Office
Schemes, Mutual Funds and Government Bonds are safe and long-term
avenues. Fixed Deposits also give you a 5.5%* interest, while the share
market brings you returns of 18.88%#.
PORTFOLIO MANAGEMENT
Count on experience
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Through quarterly account performance statements, delivered to your
doorstep.
Go digital, stay updated
They e-mail all your financial statements to you, doing away with the
hassle of paperwork.
Special Report:
These reports give you an in depth coverage on special events such as the
Budget Report, Quarterly results, RBI Credit & Monetary Policy,
Monsoon Report and much more.
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Market Morning:
Sectoral Reports:
Deciding which sector to invest in? Their Super Sector report can guide
you. Know details including the effect of government policies and
regulations and estimates about how the sector is expected to behave.
Stock Ideas:
Ever wanted to pick a needle from a stack of Hay. That's exactly what a
stock Idea is. Their research desk picks out potential stocks which can
provide immense scope for returns on investments. This is a report which
is completely based on fundamentals.
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Derivative Reports:
You can view the put call ratio, the most active derivative contracts and
the top change in open interest. You can also get FII Statistics, the top
gainers and losers and the cost of carrying out various derivative
contracts.
Portfolio Advice:
You can avail the advice of our experts by simply writing an email to
them. Whether it is on choosing a stock or sector or anything regarding
investments all your queries will be answered. If you need advise simply.
And last, but not the least, you can get these expert tips and
recommendations as SMS on to your mobile phone.
Check out the returns on investments that our clientele has enjoyed over
the past year.
Get access to in-depth research. Or zero in from our concise list of funds,
stocks and bonds based on your preferred criteria.
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Analyse with in-depth research
Get independent research with reports, ratings, and rankings from expert
analysts; plus, insight into current analyst recommendations and their
historical performance.
Monitor your investments
Get breaking news and set alerts for your portfolio, and track
performance with watch lists
At Kotak Securities, this is precisely what they believe in. They are
committed to make trade easy for you. They understand your level of
expertise in trading and provide you solutions to fit your needs - whether
you are a beginner, a seasoned investor or a professional trader. They can
help you invest wisely while taking into account, the amount you wish to
invest. Kotak Securities conducts research for all class of customers.
Beginners
Looking to invest but don't know where and how? Wondering whether
online trading would be a good and reliable way to invest? At Kotak
Securities, they make online investing really easy for you - so you can
trade from the comfort of your home or office, or even while you are on
the move.
Seasoned Investors
Given the volatile nature of the stock markets, you can never be really
sure of getting stable returns every time, from your investments. If you
have a family to look after, the need for planning your investments in the
long run becomes greater than ever. So whatever you’re life goals,
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investing wisely could make all the difference between a fortune gained
and an earning lost. Kotak Securities, help you plan investments keeping
your future in mind.
Super Trader
If the research for beginners and seasoned are taken care of by them,
super traders—having a huge volume of transactions, who are dedicated
customers, research is conducted to maximize their returns with
minimizing risks.
MARKET SURVEY FOR KOTAK SECURITIES
Yes No
Kotak HDFC
ICICI Others
1 2 3
4 5
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1 2 3
4 5
1 2 3
4 5
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Kotak Securities
10%
Yes (%)
No (%)
90%
Total No of Person Kotak (%) HDFC (%) ICICI (%) Others (%)
40 40 25 20 15
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Others (%)
15%
Kotak (%) Kotak (%)
ICICI (%) 40% HDFC (%)
20% ICICI (%)
Others (%)
HDFC (%)
25%
No (%)
38%
Yes (%)
No (%)
Yes (%)
62%
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5 (%)
7%
4 (%)
11% 1 (%)
1 (%) 2 (%)
3 (%) 44% 3 (%)
15%
4 (%)
5 (%)
2 (%)
23%
Easy
Insurance
7%
Easy Easy
Easy Equity
Mutual Equity
Fund 34% Easy IPO
13% Easy Derivatives
Easy Mutual Fund
Easy
Easy IPO Easy Insurance
Derivative
13%
s
33%
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5 (%)
12%
1 (%)
4 (%) 31% 1 (%)
13% 2 (%)
3 (%)
4 (%)
3 (%)
5 (%)
17%
2 (%)
27%
5 (%)
10%
4 (%) 1 (%) 1 (%)
13% 40% 2 (%)
3 (%) 3 (%)
10% 4 (%)
5 (%)
2 (%)
27%
LIMITATIONS
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RECOMMENDATIONS.
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CONCLUSION
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strategy they are tying to capture retail investors, in order to increase their
goodwill in the market. In future the company will expand and diversify
its business in terms of new products and innovations in existing products
to cater to the needs of their valuable customers.
BIBLIOGRAPHY.
Source:
WIBLIOGRAPHY.
Source:
www. kotaksecurities.com
www.google.com
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