Professional Documents
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RESEARCH REPORT
ON
A FUNDAMENTAL ANALYSIS OF INVESTMENT BANKING
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DECLARATION
I, the undersigned Mst. Bhujbal Omkar Sanjay hereby, declare that the work embodied in
this project work titled “A fundamental analysis of investment banking”, forms my own
contribution to the research work carried out under the guidance of Asst. Prof. Bhavana
Parab is a result of my own research work and has not been previously submitted to any
other University for any other Degree/ Diploma to this or any other University. Wherever
reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography. I, hereby further declare that all information of this document
has been obtained and presented in accordance with academic rules and ethical conduct.
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CERTIFICATE
This is certified that the report entitled “A fundamental analysis of investment banking”
submitted by Bhujbal Omkar Sanjay (Admission no. 2019PC1639 and Date: 15 February,
2022) for the fulfillment of the requirement for the degree of Bachelor of Management
Studies of the University of Mumbai, is his/her original research work carried out under my
supervision. To the best of my knowledge, the results presented have not been submitted in
part or full for any other diploma or degree of this or any other University.
ACKNOWLEDGEMENT
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To list who all have helped me is difficult because they are so numerous and the depth is so
enormous. I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project. I take this opportunity to thank the University of
Mumbai for giving me the chance to do this project. I would like to thank my Principal, Dr.
Gajanan Wader for providing the necessary facilities required for completion of this project. I
take this opportunity to thank our BMS Co-ordinator Mrs. Nithya Varghese, for her moral
support and guidance. I would also like to express my sincere gratitude towards my project
guide Asst. Prof. Bhavana Parab whose guidance and care made the project successful. I
would like to thank my College Library, for having provided various reference books and
magazines related to my project. My genuine thanks are due to the rest of the workforce, staff
of the Mahatma Education Society's Pillai College of Arts, Commerce and Science
(Autonomous), New Panvel for their significant exhortation and direction. Ultimately, no
words can satisfactorily offer my obligation of thanks to my parents and my parents in law
for producing in me a lasting interest in higher investigations.
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ABSTRACT
The aim of module is to gain insights into the business of investment banks as well as the
competitive forces between investment banks. Rather than giving a general overview of
investment banking, this module discusses the theoretical background the helps explain the
behavior of investment banks in specific business lines, e.g. M&A, IPOs, and the conflicts of
interest for analysts working in investment banks.
However, valuation also lies at core of investment banking and this module aims to provides
a comprehensive analysis of the main valuation tools that investment banks use in investment
decision,M&A, IPOs, spin-offs and leveraged-buyouts.
Hence, this module covers the “deal” but also the behavior of investment bankers conducting
this deals and how their motives affect their recommendations to clients. Moreover, this
module assumes that students already known the basics of M&A and IPOs at least from the
company perspective (motives, process, etc.)
INDEX
CHP.NO. TOPIC PAGE NO.
1 INVESTMENT BANKING
1.1 INTRODUCTION
1.2 DEFINITION
1.3 EVOLUTION OF INVETMENT
BANKING
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CHAPTER 1
1.1 INTRODUCTION
Investment Banks assist corporations in raising funds in the public markets both equity and
debt, as well as provide strategic advisory services for managers, acquisition and types of
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transactions. Investment banks differ from Commercial Banks which serve to directly take
deposits and make loans.
Investment banks also differ from brokerages, which in general assist in the purchase and sale
of stocks, bonds and mutual funds. However some firms operate as both brokerage and
investment banks; this includes some of the best known financial services firms in the world.
Investment banks help companies and government and their agencies to raise money by
issuing and selling securities in the primary market. Investment Banking is dedicated to fulfill
the needs of trade and includes by acting as an intermediary and a financer too.
Investment bankers with the confidence of the investors of the General public, command a
high reputation for passing on accurate, adequate and timely information which helps and
facilitates in the functioning of capital markets, money markets and international financial
systems. Investment bankers preserve their skills as personal possessions for their
competitive strength in their profession.
Investment banks offer a plethora of services to its clients. These services include providing
valuable advice to the clients on the type of finance to be raised, issue management process,
corporate restructuring strategies, underwriting services, project feasibility and planning, etc.
They provide various pre-issue and post-issue services to the clients.
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Investment Banking is one of the most global industries, and is hence continuously
challenged to respond to new developments and innovation in the global financial markets.
1.2 DEFINITIONS
In the strictest definition, Investment banking helps in the raising of funds both in debt and
equity, and the division handling this in an investment bank is often called the “Investment
Banking Division”(IBD). However, a few small firms solely provide these services. Almost
all investment banks are heavily involved in fixed income, foreign exchange, commodity, and
equity securities.
An Investment banker acts as an intermediary between the issuers and the ultimate purchasers
of securities in the primary securities market. These institutions provide guidance in raising
capital, issue management services, underwrites corporate securities and provides other
advisory services.
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Investment banks help companies and governments (or their agencies) raise money by
issuing and selling securities in the capital markets (both equity and debt).
Almost all investment banks also offer strategies advisory services for mergers, Acquisitions,
divestiture or other financial services for clients, such as the trading of derivatives, fixed
income, foreign exchange, commodity. Trading securities for cash or the promotion of
securities or referred to as “sell side.” The “buy side” constitutes the pension funds, mutual
funds, hedge funds, and investing public who consume the products and services of the sell-
side in order to maximize their return on investment. Many firms have both buy and sell side
components.
The term “ Investment bank ” does not have a precise definition, but is generally applied to
financial houses which, starting from trading as merchants, expanded their role to financing
the trading and commercial activities of others, especially in the international market place.
For many years, the British houses were know as investment banks reflecting their origins,
Investment banks have retained this strong international flavour and often have offices in
many other countries, particularly in the major financial centers.
Investment Banking in one of the most global industries, and hence continuously challenged
to respond to new development and innovation in the global financial markets. Throughout
the history of investment banking, many have theorized that all investment banking products
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and services would be commoditized. New products with higher margins are constantly
invented trading know-how in new markets. However, since these can usually not be patented
or copyrighted, they are very often copied quickly by competing banks, pushing down trading
margins.
For example, trading bonds and equities for customers is now a commodity business, but
structuring and trading derivatives is highly profitable. Each OTC contract has to be uniquely
and could involve complex pay-off and risk profiles. Listed option contracts are traded
through major exchanges, and are almost as commoditized as general equity securities,
products have been commoditized.
In addition, while many products have been commoditized, an increasing amount of profit
within investment banks has come from proprietary trading, where size a positive network
benefit (since the more trades an investment bank does, the more it knows about the market
flow, allowing it to theoretically make better trades and pass on better guidance to clients).
Vertical Integration
Another trend in Investment Banking at the dawn of the 21st century has been
the vertical integration of debt securitization. Previously, investment banks had assisted
lenders in raising more lending funds and having the ability to offer longer term fixed interest
rates by converting the lenders’ outstanding loans into bonds. For example, a mortgage lender
would make a house loan, and then use the investment bank to sell bonds to fund the debt.
The money from the sale of the bonds can be used to make new loans, while the lenders
accepts loan payments and passes the payments on to the bondholders. This process is called
securitization. However, lenders have begun to securitize loans themselves, especially in the
areas of mortgage loans. Because of this, and because of the fear that this will continue, many
Investment Banks have focused on becoming lenders themselves, making loans with the goal
of securitizing them. In fact, in the areas of commercial mortgage, many Investment Banks
lend at loss leader interest rates in order to make money securitizing the loans, causing them
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to be a very popular financing option for commercial property investors and developers. This
vertical integration was root cause of “SUB PRIME CRISIS”.
Investment banks will typically be concerned with several business units, including Corporate
Finance (concerned with managing the finances of corporations, including mergers,
acquisitions and disposals), often called the Investment Banking Division of the firm;
Research (concerned with investigating, valuing and making recommendations to clients-both
individual investors and larger entities such as hedge funds and mutual funds-regarding
shares and corporate and government bonds); and Equities or sales and trading (concerned
with buying and selling shares both on behalf of the bank’s clients and sometimes also for the
bank itself).Management of the bank’s own capital, or Proprietary Trading, is often one of the
biggest sources of profit; for example the banks may structure their books so the they profit
form a fall of bond yields (a rise of bonds prices).
An Investment bank provides its clients expert advice, innovative solutions, outstanding
execution and comprehensive access to the world’s capital markets. Whether the clients
require investment banking, equities, fixed income or foreign exchange, investment banks
have the intelligence, markets insight and global coverage to help them to capture
opportunities and manage risk.
An Investment banks offers a plethora of services to its clients. These services include
providing valuable advice to the clients on the type of finance to be raised, issue management
process, corporate restructuring strategies, underwriting services, project feasibility and
planning, etc. They provide various pre-issue services to the clients.
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1) CORPORATE COUNSELLING
It advises the company to raise fund through equity issue in the primary market or
issuing debentures or the public depending on the quantum of capital required.
2) PROJECT COUNSELLING
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3) LOAN SYNDICATION
The capital issues are managed by category- I investment bankers and Constitute the most
important aspect of their services. The public issue of corporate securities involves
marketing of capital issue of new and existing companies, additional issue of existing
companies including rights issues and dilution of shares by letter of offer. The public
issues are managed by involvement of various agencies, i.e. underwriters, broker’s
bankers, advertising agencies, printers, auditors, legal advisors, registrar to the issue and
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investment bankers providing specialized services to make the issue a success. However,
investment bankers is the agency at the apex level who plan, co-ordinate and control the
entire issue activity and direct different agencies to contribute to the successful marketing
of securities. The procedure of managing a public issue by investment bankers is divided
into two phases.
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(1) To verify and confirm that the issue is subscribed to the extent of including
development from underwriters in case of under subscription.
(2) To supervise and co-ordinate the allotment procedure of registrar to the issue as per
prescribed Stock Exchange guidelines.
(3) To ensure issue of refund order, allotment letters/ certificates within the prescribed
time limit of 10 weeks after the closure of subscription list.
(4) To report periodically to exchange regulatory about the progress in the matters
related to allotment and refunds.
(5) To ensure the listing of securities at Stock Exchange.
(6) To attend the investors grievances regarding the public issue.
The investment bankers for managing public issue can negotiate a fee subject to a ceiling.
This fee is to be shared by all lead managers, advisers, etc.
Cities are done by all categories of investment bankers except category-IV. This activity is a
good business option if due care is taken in selecting and marketing the issue so that likely
development is generated. The investment bankers are authorized to take a maximum
underwriting of 5 times its net wroth at any point of time.
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and minimize the risk along with other objectives like stability of income, capital growth,
liquidity, safety, tax incentives, etc.
The financial services of equipment leasing and hire-purchase are offered by most of the
investment bankers. Leasing and hire-purchase income constitute a major portion of total
income generation of present day investment banking organizations. The
rental/installments provide returns of about 20% and in addition provide a tax shield.
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The lending investment bankers also deal in sale/purchase of securities in secondary market
on their own. This activity is followed on account of availability of expertise in finance, in
general and capital markets and equity research in particular company.
For investment bankers mergers and acquisitions is promising to be new business. New
entrants view mergers and acquisitions more seriously. Mergers and acquisitions is an
important additional business. M&A was not in focus till recently but now all investment
bankers are planning to the largest investment bank are in the low thousands. Success in
the Investment banking business depends on the ability to provide whatever financial
services a client may require, and people employed need particular qualities of flexibility,
innovativeness and client handling skills.
Investment bankers assist the management of the client company to successfully restructure
various activities, which include mergers and acquisitions, divestitures, management buyouts,
joint venture among others.
To help companies achieve the objectives of these restructuring strategies, the investment
bankers participates in different activities at various states which include understanding the
objectives behind the strategy (objective could be either to obtain financial, marketing or
production benefits), and help in searching for the right partner in the strategic decision and
financial valuation of the proposal.
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In providing financial assistance, investment banks offer a full understanding of all facets
of the capital markets. This includes all types of debt and equity financing available from
both the domestic and international markets. An investment bankers, cognizant of capital
costs, looks for the best sources of capital.
It should be understood that interest rates are not only definition of capital costs.
Restrictions on availability, prepayment terms, and operating effectiveness can often
outweigh what might appear to be inexpensive capital with low interest rates. Too often,
capital includes costs, which force an entrepreneur or a business to undertake undesirable
actions. In short- run, some actions might be necessary, but often in the long run are
detrimental.
The traditional investment banker understands these capital limitations and can structure a
transaction, which is beneficial to all sides of the table-not just the capital source.
He also know how to substitute one type of capital for another, sometimes utilizing
internal sources from asset repositioning or cash creation from improvements in working
capital. He understands fully the risk versus return elements necessary to complete the
capital procurement process.
Investment banker’s offer customized solutions to solve the financial problems of their
clients. Advice is sought in areas off financial structuring. Merchant bankers study the
working capital practices that exist within the company and suggest alternative policies.
They also advise the company on rehabilitation and turnaround strategies, which would
help companies to recover from their current position. They also provide advice to
appropriate risk management strategies like hedging strategies.
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Factoring involves the outright sale of account receivable. By such sale a client (the
exporter or manufacturer) transfers his/her ownership of the accounts to a factor (an
organization, firm). It is short – term debt financing. Here three parties are involved.
The investment bankers may act as factor organization with a view to earning a great
amount of commission.
1) Financing
2) Advisory services if necessary
3) Collection of bills / Account Receivable against sales produced.
4) Maintenance of sales ledger
5) Provide further if necessary
6) Covering losses if there are any.
It is a process through which some inactive assets (mortgage assets) are converted into
cash / active assets. It is long – term debt financing. Here assets are converted into long –
term bonds. In this approach, the investment banker for issuance of security bonds against
the assets with a matching of time and terms between mortgage property and security
bonds. Here the selection of assets is generally considered on the basis of the following :
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1) Quality of assets
2) Certainty of repayment
3) Good ranking from the credit rating agency.
With the continued developmental activities in the country as well as liberalization of the
economy the industry and trade requires funds for its expansion which are in excess of
that, which is available from institutions. Thus there is a need to collect the funds from
capital market and investment bankers are needed to help in mobilizing the funds. This
factor has contributed to the steady growth of investment banking in the country. In order
to regulate the market and check unfair trade practices on the stock Exchange, the
Government of India in 1992 passed the Securities and Exchange Board of India (SEBI)
Act. SEBI for the first time formally defined investment banking and framed rules and
regulations for investment bankers.
SEBI classified investment bankers into four categories on the basis of capital
adequacy :
(1) Category – I :
The capital adequacy requirement for category-I investment bankers in that net wroth
should not be less than Rs. 1-crore. The bankers should be allowed to :
a) Carry on any activity of the issue management which will in turn consists of preparation
of prospectus and other information relating to the issue, determining financial structure,
tie up of financial, financiers and final allotment and refund of the subscription.
b) Act as adviser, Consultant, manger, underwriter, portfolio manger.
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(2) Category – II :
The minimum capital adequacy requirement is a net wroth of Rs.50 lakhs. The
category-II investment banker is allowed to act only as an adviser, consultant, Co-
manger, underwriter and portfolio manager.
The Investment banker should have a minimum net wroth of Rs.20 lakhs to meet the
capital adequacy requirement. The permissible activities are to act as underwriter, adviser
and consultant to an issue.
(4) Category – IV :
No capital adequacy requirement has been specified for category-IV investment banker.
The Investment banker is only allowed to act as an advisor or consultant to an issue.
I Rs.1 Crore
II Rs.50 Lakhs
III Rs.20 Lakhs
IV NIL
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It is evident from the above that according to central Government, the role of
investment banker is restricted to activities related to capital market.
However investment banking cannot be restricted to the above descriptions and cover a
wide range of activities which are fund based non-fund based financial and investment
services encompassing both capital as well as money market activities in domestic as well
as international financial markets.
Fund based source of finance refers to those sources of finance which actually gets funds
or money in the organization e.g. secured loan, equity shares, etc.
The fund based activities undertaken by investment bankers encompass the following:
(1) Dealing in money market instruments like placement of commercial papers, fixed
deposits, treasury bills, etc.
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Non – fund based source of finance refers to those sources of finance which only assure the
supply of fund but does not get the fund in real terms.
(2) Consultancy and advisory services including corporate and project counseling.
An investment bank is split into the so-called Front office, Middle Office and Back
Office. The individual activities are described below :
Front Office
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Investment Banking is the traditional aspect of investment banks which involves helping
customers raise fund in the Capital markets and advising on mergers and acquisitions.
Investment bankers prepare idea pitches that they bring to meetings with their clients,
with the expectation that their effort will be rewarded with mandate when the client is
ready to undertake a transaction. Once mandate, an investment bank is responsible for
preparing all materials necessary for the transaction as well as the execution of the deal,
which may bidders, or negotiating with a merger target. Others terms for the investment
banking division includes merger & acquisition (M&A) and corporate Finance.
Financial Markets is split into four key divisions: Sales, Trading, Research and
Structuring.
Sales and Trading is often the most profitable area of an investment bank, responsible for
the majority of revenue of most investment banks. In the process of market making,
traders will buy and sell financial products with the goal of marketing an incremental
amount of money on each trade.
Sales is the term for the investment banks sales force, whose primary job is to call on
institutional and high-net-worth investors to suggest trading ideas (on 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
new that fit a specific need.
Research is the division which reviews companies and writes reports about their
prospects, often with “buy” or “sell” ratings. While the research division generates no
revenue, its resources are used to assist trades in trading, the sales force in suggesting
ideas to customers, and investment bankers by covering their clients. In recent years the
relationship between investment banking and research has become highly regulated,
reducing its importance to the investment bank.
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Structuring has been a relatively recent division 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.
MIDDLE OFFICE
Risk management involves analyzing the market and credit risk that traders are taking
onto the balance sheet in conducting their daily trades, and setting limits on the amount of
capital that they are able to trade in order to prevent ‘bed’ trades having a detrimental
effort to desk overall. Another key Middle Office role is to ensure that the above
mentioned economic risks are captured accurately (as per agreement of commercial terms
with the counterparty) correctly ( as per standardized booking models in the most
appropriate systems) and on time (typically within 30 minutes of trade execution). In
recent years the risk of errors has become known as “optional risk” and the assurance
Middle Office provide now include measures to address this risk. When this assurance is
not place, market and credit risk analysis can unreliable and open to deliberate
manipulation.
BACK OFFICE
Operations involves data-checking trades that have been conducted, ensuring that they are
not erroneous, and transacting the required transfers. Whilst it provides the greatest job
security of the divisions within an investment bank, it is a critical part of the bank that
involves managing the financial information of the bank and ensures efficient capital
markets through the financial reporting function. The staff in these are often highly
qualified and need to understand in depth the deals and transaction that occur across all
the division of the bank.
(1) Research :
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An Investment bank must have quality data available as per the needs of Client
Company in order to provide advisory services. It must have update information
about market on-goings. The data collected should be authentic and from reliable
sources.
(2) Analysis :
(6) Contacts :
An Investment banking business mainly depends upon the sociable nature and wider
contacts. The scope of contract of an investment banker covers:
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Investment bankers have to widen the contacts and continue to maintain them by
meeting people in person, in special gatherings and through writing to them.
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Investment banking in the country has come to be primarily associated with the capital
markets. With the de-regulation of the Indian economy since 1991, there are several new
sectors open to private investment which have consequently created an opportunity for
private financing.
The need for this banking was not met, by either commercial banks or the financial
institutions and hence there was a huge gap which needed to be filled. This gap could be
met through capital markets or a range of finance products and hence a good scope
existed for the various services offered by an investment 1992 heralded an era free market
pricing of equity shares. Investment bankers in particular have been assigned a greater
responsibility in the fixation of issue price and premium, if any. In the CCI regime
investment bankers had restricted role to play in that regard. Their role was confined
mainly to getting clearances from the CCI and ensuring the success of capital issues
through their marketing efforts.
There were also no disclosure norms. Investment bankers were seldom held accountable
for the correctness of the information disclosed in the prospectus and letter of offer. But
with the issuance of comprehensive guidelines for free market pricing, code of conduct
for investment Bankers, etc. by SEBI the role of investment bankers has considerably
increased.
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in future they may play a major role by their increasing participation as managers/lead
managers.
Foreign Direct Investment (FDI) as also investment by NRIs have risen considerable due to
number of incentive offered to them. They need the services of investment bankers to advise
them for their investment in India. Further, increasing investments in joint Ventures abroad
by Indian Corporations also require expert services of investment bankers. For the first time
in India the concept of debt market has set to work through NSE and OTCEL. Experts feel
that of the estimated capital issue a good portion may be raised through debt instruments. The
development of debt market will offer tremendous opportunity to investment bankers.
Recently, Indian capital market has also witnessed innovations in the financial instruments
such as non-convertible debenture with detachable warrants, cumulative convertible
preference shares, zero coupon bonds deep discount bonds, triple option bonds, floating rate
bonds, secured premium notes, auction rates bonds, etc. This has further” extended the role of
investment bankers as market markers for these instruments. Securities and Exchange Board
Of India (SEBI) has laid certain guidelines to ensure fair business practices in the Indian
markets.
(1) Authorization :
Any person or body proposing to engage in the business of investment banking would need
authorized by the Securities and Exchange Board of India (SEBI) in their prescribed format.
This will also apply to those presently engaged in investment banking activity, including as
mangers, consultants, or advisers to issue of management, which inter-alias will consist of
preparation of prospectus.
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(3)Authorization Criteria :
All investment bankers are expected to perfume with high standards of integrity & fairness in
all their dealings. A code of conduct for investment bankers will be prescribed by SEBI .
Within this context, SEBI’s authorization criteria would take into account mainly the
following –
a) Professional competence
b) Personnel, their adequacy & quality, & other infrastructure
c) Capital adequacy
d) Past track record, experience, general reputation & fairness in all their transaction
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(1) An Investment banker in the conduct of his business shall observe high standards of
integrity and fairness in all his dealing with his client and other investment bankers.
(2) An Investment banker shall render at all times high standards of service, exercise due
diligence, ensure proper care and exercise independent professional judgments.
(3) He shall wherever necessary, disclose to the client possible sources of conflict of
duties and interests , while providing unbiased services.
(4) A investment banker shall not make any statement or become privy to any act,
practice unfair competition, which is likely to be harmful.
a. To the interests of other investment bankers or
b. Is likely to place such other investment bankers in a disadvantageous position
in relation to the investment banker, while competing for or executing any
assignment.
(5) An Investment banker shall not make any exaggerated statement, whether oral or
written, to the client either about the qualification or the capability to render certain
services or his achievements in regard to services rendered to other clients.
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a. Render the best possible advice to the client having regards to the clients
needs and the environment and his own professional skills;
b. Ensure that all professional dealings are effective in a prompt, efficient and
cost effective manner.
(9) An Investment banker shall not generally and particularly in respect of issue of any
securities be party to:
a. Creation of false market;
b. Price rigging or manipulation;
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(10) An Investment banker shall abide by provisions of the Act, Rules and
Regulations, Notifications, Guidelines, etc. which may be applicable and relevant to
the activates carried on by the investment banker.
Investment banking activates in India originated in 1969 with the investment banking
division set up by the Grind lay’s Bank, the largest foreign bank in the country, at that
time. The main service offered to the corporate enterprises by the investment bank
included management of public issues and financial consultancy. Other foreign banks like
Citibank, Chartered Bank also assumed the investment banking activity in India. State
Bank of India started investment banking in 1973 followed by ICICI in 1974. Both
emerged as leaders in investment banking with significant business during the period of
1974-1985 in comparison to foreign banks. Mid-seventies witnessed a growth of
investment bank organizations in the country with various commercial banks, financial
institutions, broker firms entering into the field of investment banking.
The growth in investment banking business during the early seventies was due to
Foreign Exchange Regulation Act, 1973 (FERA) where in a large number of foreign
companies operating in India were required to dilute their foreign holding in order to
continue business in the country. This resulted in expansion of capital markets providing
enough in India economy opened new doors for investment banking business to enter in
the diversified area of activities, but at the same time this has brought competition in the
investment banking sector. This sector has traditionally been dominated by financial
institution, banks and their subsidiaries.
Now, various private sector investment bankers have emerged and some of them are
having international reputations.
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Important reasons for the growth of investment Banks in India has been development
activities throughout the country, exerting excess demand on the sources of funds for ever
expanding industries and trade, thus leaving a widening gap un-bridged between the supply
and demand of investible funds. All India Financial Institution had experienced constraint of
resources to meet ever increasing demands for funds from the corporate sector enterprises. In
such circumstances corporate sectors had the only alternative to avail of the capital market
service for meeting their long term financial requirements through capital issue of equity
shares and debenture.
Growing demand for finds put pressure on capital market that enthused commercial
bank, share brokers and financial consultancy firms to enter into the field of investment
banking and share the growing capital market. As a result, all the commercial banks in
nationalized and public sector as well as in private sector including foreign banks in India
have opened their investment banking and are competing in this field.
Need for investment banking is felt in the wake of huge public savings lying
untapped. Investment bankers can play highly significant role in mobilizing funds of savers to
investible channels assuring promising returns on investment and thus can assist in meeting
the widening demand for investible funds for economic activity. With growth private and
public sectors would be able to raise required amount of funds annually from the capital
market to meet the growing requirement for funds for establishment for funds for establishing
new enterprises undertaking expansion, modernization, diversification of the existing
enterprises. This reinforces the need for a vigorous role to be played by investment banking.
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Investment Bank advise the investors of the incentives available in the from of tax
relief’s, other statutory relaxations, good return on investment and capital appreciation in
such investment to motivation them to invest their savings in securities of the corporate
sector. Thus investment banks help industries and trade to raise funds and the investors to
invest their saved money in sound and healthy concerns with confidence, safety and
expectations for higher yields. Finance is the backbone of business activities._ Investment
Banks make available finance for business enterprises acting as intermediaries between them
raising demand for funds and the supplies of funds besides rendering various other services.
The following are some of the reasons why specialist investment banks have a crucial role to
play in India :
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bankers like SBI, Canara Bank, Punjab National Bank, Bank of India, etc. Some firms are
also organized by financial and technical consultants and professionals. Securities and
Exchange Board of India has dividend the investment bankers into four categories based on
their capital adequacy. Each category is authorized to perform certain functions. From the
point of organizational set up, India’s Investment banking organizations can be categorized
into four groups on the basis of their linkage with parent activity. They are :
These organization have brought professionalism in investment banking sector and they help
their parent organization to make a presence in capital market.
In the recent past, there has been an inflow of qualified and professionally skilled brokers in
various Stock Exchange of India. These brokers undertake investment banking related
operations also like providing investment and portfolio management services.
These investment banking firms are originated in private sector. These organization are the
outcome of opportunities and scope in investment banking business and they are providing
skill oriented specialized services to their independently or through some collaboration with
their Indian counterparts. Private sector investment banking firms have come up either as sole
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Investment Banking
proprietorship, partnership, private limited or public limited companies. Many of these firms
were in existence for quite some times before they added a new activity in the from of
investment banking services by opening few division on lines of commercial banks and All
India Financial Institutions.
An Investment bank through its various services provided, help customers reap
benefits of hiring their services. An investment bank provides apt and services to the clients.
The services provided by these organization range from raising capital from the
market, corporate restructuring to instrument designing or pricing (debt or equity). Financial
engineering issue management, designing and publishing the issue prospectus, marketing &
advertising, Loan syndication, etc. are other specialized service provided by the institutions.
Specialized Services :
Advisory Services :
Investment banks provide valuable advisory services to their clients on various areas.
They have the expertise to advise client in decision making and make profits thereof.
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Investment Banking
Therefore in this section we propose to throw light on the following most important
activities undertaken by an Investment Banker.
1. IPO Process
2. Debt Syndication
In Modern times IPO is considered as a major source for raising equity finance by the
companies. The Public Offerings are of 2 types. The process of an IPO is in one way or the
other similar to the process of an FTO.
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Investment Banking
Fixed Price Issue : A fixed price issue is where the issuing price of the share id fixed in
advance before the opening date of the issue.
Book Build Issue : In this type of issue, the issue of the share is stated in terms of a range /
price band. The final issuing price can be anything in between this range. E.g. A Price Band
of Rs.100 to 110.
STEP 1
The first step includes all activities prior to the IPO. The process followed in this step
are as follows:
Acceptance : After the offer by the Client Company, the Investment Bank before accepting
the offer conducts a Due Diligence of the client. They look at the past record of this company
and decide whether to take up the IPO or not.
Mandate Letter : Once the Investment Bank agrees to act as the Lead Manger to the Issue,
they are issued a Mandate Letter by the Client. This is the official permission by the company
to the merchant bank to act as the Lead Manager.
IPO Team & Various Appointments : In this case the Investment Banker and the Client
Company constitutes a dedicated IPO Team. This team works together towards the execution
is made of the company. This presentation contains a past performance of the company.
Preparation of DRHP : Draft red herring prospectus has to be filed with the SEBI, before
the official announcement of the IPO. This is the most important document of the entire IPO
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Investment Banking
process, as the permission for an IPO depends on this document. It is very lengthy process
and has to be drafted very carefully. It has different sections. The various agencies appointed
above are asked to prepare their relevant sections of DRHP, which is then compiled.
Here apt attention should be paid to the financials of the company. Every bit of
information mentioned in the DRHP should be true to the fullest extent; otherwise it may
attract heavy penalty. The contents of DRHP should be signed by the relevant agencies.
The Investment Banker has to not only assisted in compiling information, but also has
to prepare the sections of the DRHP falling under his scope of activity such as the financial,
the valuation of shares, etc.
Completion of Preliminary Formalities: This is the crucial aspects of an IPO. Here the
Investment Banks assume of an advisory role. They advise the company as regards the capital
structure to be met for the listing requirements of the stock exchanges, modify and amend
articles through proper resolution to meet the legal requirement of the company law board,
etc.
a) Conduct and service on legal and financial due – diligence advised by the legal
council.
b) Discussion with the auditor for the final reporting requirement to SEBI.
c) Drafting and finalization of the DRHP for filling with SEBI.
d) Initiate the process of connectivity with depositories in co-ordination with
Registrations. NSDL, CSDL.
e) Finalize communication strategy, corporate advertisement strategy and issue
advertisement strategy.
The last step in this section is filing the DRHP with SEBI, application for listing of shares
with the stock exchange.
STEP 2
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(a) Preparation of a detailed research report on the company and the industry. This report
is always based n the past performance of the company and does not include future
projection.
(b) Circulation of this report to the Institutional Investors.
(c) Hold a meeting with the institutional investors. In this meeting they are spoken to and
convinced to buy the shares of the company. Also their advise is taken on various
issues such as the valuation of shares, etc.
In this step the company primarily targets the Qffi’s. This is due to the following
reasons :
STEP 3
Prior to the commencement of this step the following activities have been completed.
(a) DRHP field with SEBI and comments and feedback have been received.
(b) Reply to the comments provided through the red herring prospectus.
(c) Permission obtained from SEBI for commencement with the Issue.
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ISSUE MARKETING :
This is relatively the most important step, which might ensure the success or failure of
the issue. In this step the entire issue is marketed to the various investors. The following are
the major activities :
STEP 4 :
Before the start of this step, the Issue has been opened, subscribed to and also closed.
During the issue, the Investment Banks have no major work. The only activity that they
undertake during that period is supervision as to the collection of subscription money and
make sure everything is being carried out smoothly.
They oversee the accounting aspects of the issue. In case the issue is subscribed or
over subscribed, they proceed with the following steps. However in case the issue is
undersubscribed, then underwriting agreements are enforced and shares are allotted to
underwriters, and after that the following activities are carried out :
(a) Issue –price advertisement: Under this the merchant bankers announce the final issue
price. This is the price at which the shares allotted to the investors.
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(b) Prepare a consolidated report applications received, publicize the performance of the
issue and decided the basis of allotment depending upon the response from the
formalities.
(c) Updating the prospectus for the prices, issue size, the basis of allotment and other
statutory formalities.
(d) File the updated prospectus and the underwriting agreement with SEBI.
(e) Submit the 3 day report to SEBI.
(f) Announce dates of allotment of shares, transfer of money from the Escrow account to
the public issue account.
(g) Allotment of shares to the general public in co-ordination with the registrar, Stock
Exchange and the public Representatives.
(h) Announcement of Allotment o shares, basis of allotment of shares and the expected
date of delivery of shares in the DEMAT A/c. and transfer of money or dispatch of
refund order as the case may be to the public.
(i) Obtain listing permission and Listing of shares on the stock Exchanges.
(j) Transfer of shares in the DEMAT A/c. Passing of ECS for refund in co-ordination
with bankers and dispatch of refund orders if any.
(k) Filing of the VS day report with SEBI.
(l) Obtain trading permission from SEBI and the Stock Exchange.
(m)During the entire IPO process, investment Banks have to comply with many Rules
and Regulations.
In modern time business many companies require financial resources to carry out their
expansion / development activity, etc. there can be 2 ways of finance, Debt & Equity. Above
we saw one of the methods of raising equity capital. Now we shall have a look at a method of
raising borrowed funds / Debt Capital.
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Debt in company’s capital structure has its advantages as well as disadvantages. The
main reason for the companies to prefer to use debt as a source of finance is due to its easy
availability and low procurement cost.
When the requirement of funds is small / the amount to be raised via debt is small,
than it is possible to take the entire amount form one bank. However when the requirement of
loan is huge. Which cannot be financed by one bank, than there is need for one or more banks
join together and collectively provide the required loan. The second phenomenon is called
debt syndication and this will be the crux of discussion in this case study.
Debt syndication in not an easy activity. It is very lengthy and a time consuming
activity. The entire activity from the start to end takes 2 months of time. The compliance of
the legal formalities is what makes the entire procedure lengthy.
Under this step, the business opportunity is identified. This business opportunity may
arise when the Investment Bank approaches the client company or the client company
approaches the Investment Bank. In majority of the cases, latter happens. The Client
company approaches the Investment Bank with an offer letter / proposal to raise a loan for
them.
After the receipt of the letter, before confirmation the Investment bank carries out
internal due diligence from its end. Here the task of the Investment Bank becomes relatively
simple if the client is an Already existing one. However in the case of a new client, proper
credit rating needs to be done. For this purpose various credit rating agencies are approached,
information is found out from other sources. After the analysis of this information, if the
company is found be worthy, then the offer is accepted.
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The entire due diligence process is carried out by the credit rating committee of JM
Financial, which is a Board Level Committee.
Please take note that it is not necessary that Investment Banks has to be a soul
Investment banks to the syndication. There can also be co- Investment Bank to the
syndication process. However this does not make any different to the process of syndication
STEP 4:
After the receipt of the appointment Letter / Mandate, the following are the activities
undertaken by the Merchant Bank:
(a) The bank based on the requirement of the company decide the kind of loan to be
raised. In India there are 2 loan Markets. Rated and non rated Markets. Rated
markets is the bond market, whereas the non-rated market is the Banks Loan
Market.
The former is not very popular in the country. Bank loan market is the one which is
widely used the various companies. One of the biggest reasons as to why companies
prefer non- rated market, is due to the case of availability of loan at lower rate of
interest compared to the rated market. Also the rules and regulations in the non-rated
market are far less compared to the rated market. This is the reasons why the client
company as well as the Investment Banks, both prefer the non- rated market.
(b) After deciding the type of market, the investment bank now proceeds to find out
whether the Balance sheet and the financial statements can support the amount of
loan required by the company. Here the investment bank undertakes a detailed
study of the past performance of the company and compares it with the present
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performance. The financial statements of the company are the most important tool
used to find out this information.
(c) After determining the quantum of loan that can be supported by the company as
per its statement of accounts, the Merchant banks proceed to find out the possible
banks that would be interested in funding the requirements.
For this purpose they may approach the banks which the client companies may
specify in case of no specification, they approach the banks that have a direct dealing
with them. The banks are given various details about the nature of company, amount
of loan, expected rate of interest, etc.
(d) After the banks have been approached, the work of investment banks is more or
less complete. Now onwards they would merely act as communicating links
between the lending bank and the client company.
I. The books take approximately 40-45 days to give their acceptance of the loan. During
this time in co-ordination with the Merchant bank, the lending bank words out the Credit
worthiness of the company. Various statistics of the financial performance of the
company. This gathered about financial performance of the company. This information is
deeply studied and various ratios are found out, sensitivity testes are conducted, etc. also
one of the most important aspect is the valuation of the borrowing company, assessment
of the repayment capacity based on the revenues, etc.
II. All this while the Investment Bank is in constant co-ordination with the lending bank and
the borrowing company. They make available to the lender all the information required
by it and try their best make sure that the loan is granted.
III. After the bank is satisfied that the company is worthy of the loan, the bank proceeds with
the legal formalities. It is made sure that the entire loan is secured by collaterals,
guaranteed and everything company through the merchant bank.
IV. The company gets the documents scrutinized form its end, with the help of solicitors, etc.
if the terms and conditions of the banks such as interest rates, repayment period are
acceptable, than the company givers its conformation.
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V. Thereafter forms are filled, papers are signed and the loan is finally disbursed.
VI. After the completion of all the formalities, the Investment bank is paid the fees. This is a
percentage of the total loan disbursed.
Investment generally undertakes debt syndication for Tier II companies, because these
are the companies who are not blessed with the procedures, formalities and contacts to get
loans raised.
Before we move on to see the buy back process and services of Investment banks in
the buy back process, let first understand what buy back of shares means?
Buy back is a phenomenon under which the company’s purchase back the shares it
has previously sold to the public. In order to fund this activity the company makes use of the
free- serves and the surplus with itself.
There are a lot of rules and regulation enacted by SEBI to make sure that there are no
manipulation in the buy back process and investor’s rights are protected. Therefore a lot of
responsibility is assigned to an investment bank in initiating the entire buy back process.
Let us move on to see the role of a Merchant Bank in the Buy Back process:
This step is the same as in the previous case study where the capital client company
approaches the Investment bank asking for assistance and advice in completing the buy back
process.
Here the Investment bank after receipt of the Mandate starts its work. It determines
the exact amount of shares the company can buy back from the public. Decides the rates at
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which they can bought back and check whether the financial statements of the company and
various SEBI rules regarding the buy Back permit Buy Back, otherwise the company is likely
to attract heavy penalty.
Once all the financial are worked out and the buy back price decided, The Investment
bank proceed with drafting the letter of offer. Before the drafting can be started, the company
and the investment Bankers have to get a resolution passed by the Board and Shareholders in
an EGM. Thereafter decided the buy back date buy back period. After completing all these
formalities, they can start with the drafting of LOF.
Once the LOF is drafted, it has to be field with the SEBI within the prescribed time
period after the passing of the resolution in the EGM and the Board Meeting.
Once the LOF is filed with the SEBI, it gives its comments and modification on the
same. Within twenty-one days from the date of submission of the draft letter of offer, SEBI
specifies modifications, if any, in the draft letter of offer. The investment banker and the
company shall carry out such modifications before the letter of offer is dispatched to the
shareholders.
After the official nod is received from SEBI, the company and Merchant Banks
proceed to dispatch the OLF to the shareholders.
After dispatching the LOF to the shareholders, the company and the Merchant Banks
do to the statutory advertisement to provide information to the shareholder about the buy
back.
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The offer for buy back shall remain open to the members for a period not less than
fifteen days and not exceeding thirty days. The date of the opening of the offer shall not be
earlier than seven days or letter than thirty days after the specified date. The letter of offer
shall be sent to shareholders so as to reach them before the opening of the offer.
In case the number of shares offered by the share holders is more than the total
number of shares to be bought back by the company, the acceptances per share holder shall
be equal to the acceptances tendered by the share holders dividend by the total acceptances
received and multiplied by the total number of shares to be bought back.
The company shall complete the verifications of the offers received within fifteen
days of the closure of the offer and the shares lodged shall be deemed to be accepted unless a
communication of rejection is made within fifteen days from the closure of the offer.
An Escrow account is the mechanism put in by SEBI to protect the shareholders and
hive them security. The company shall by way of security for performance of its obligations,
on or before the opening of the offer, deposit in an escrow account a sum equivalent to the
total buy back amount.
The SEBI in the interest of the shareholders may in case of non-fulfillment of obligations
under the regulations by the company, forfeit the escrow account either in full or in part. The
amount forfeited may be distributed pro rata amongst the share holders who accepted the
offer and balance, if any shall be utilized for investor protection.
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The company shall immediately after the date of closure of the offer open a special
account with a bankers and deposit therein, such sum as would, together with the amount
lying in the escrow account make-up the entire sum due and payable as consideration for
buyback and for this purpose, may transfer the funds from the escrow account.
The company shall within seven days of time make payment of consideration in cash
those shareholders whose offer has been accepted or return the share certificates to the
security holders.
The company shall extinguish and physically destroy the security certificates so
bought back in the presence of a Registrar or the investment banker, and the statutory auditor
within seven days from the date of acceptance of the securities.
The securities offered for buyback if already dematerialized shall be extinguished and
destroyed in the manner specified under securities and exchange board of India (Depositories
and Participants) Regulations, 1996 and the bye laws framed three under.
a) The registrar and whenever there is no registrar through the merchant banker;
b) Two whole-time Directors including the Managing Director and;
c) The statutory auditor of the company, and compliance within seven days of
extinguishment and destruction of the certificates.
The particulars of the share certificates extinguished and destroyed shall be furnished to
the stock exchange where the shares of the company are listed, within seven days of
extinguishments and destruction of the certificates.
The company shall maintain a record of the share certificates, which have been can
celled and destroyed.
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Merger happens when 2 companies come join together and from a separate entity.
This could be a company with a new brand name, new business, etc.
Acquisition happen when one company has been taken over by another company.
This means that the acquiring company after the takeover controls the management of the
acquired company, whereas this is not the case in mergers.
In case of mergers and acquisition, investment bankers may act from the sell side or
the buy side. The investment bankers collect data on various companies, which are looking
for mergers. They also identify potential targets of takeover / acquisition, which could benefit
their client.
The main role of an investment banker in an M & A is to make sure that his client is
not cheated. The investment banker through various analyses finds out the minimum amount
that his client should get. Thus an investment banker tries to protect the interest of his client
from the other party.
Step 3: identify the potential targets for merger or acquisition as the case may be.
Step 5: Proposal on behalf of the client for merger or acquisition as the case may be.
Step 6: Receipt of confirmation from the 2nd party for regards merger or acquisition.
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Step 10: Negotiation between both the parties and try to reach a conclusion.
Step 11: Make changes in the agreement, prepare final agreement and get it signed.
Step 12: Assist in the formation of a new entry in case of merger and assist in the process of
investment in the case of acquisition.
This is how an investment banker helps in the M & A process. Due to shortage of
time, only the above mentioned information could be gathered for M & A.
It is popularly believed that venture capitalists fund only established players and
proven products. There is a lot of cynicism amongst many about all type that private equity
and venture capital is getting in India of late.
The national venture capital association defines venture capital as: “Money provided
by professionals who invest alongside management in young, rapidly growing companies that
have the potential to develop into significant economic contributors.”
Investment bankers provide not only financial, but also, managerial (technical,
marketing and HR), support to achieve success. This support is lent in many forms by private
funding and incubation organizations such as venture capitalists.
Clients looking for setting up a venture capital fund take help and advice of the
investment banker on the various issue from selecting a business proposal to legal
framework, rule and regulations.
The following paragraphs broadly the various steps of the evaluation process.
Initial Screening
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Investment bankers are in the business of making more the then average returns for
their clients interested in venture capital funding and only the proposals which can match or
exceed the VCs expectation will get an attention from them. Thus initial screening is a step in
which the venture capitalist reaches an initial decision to investigate the investment (or not)
The initial screen is a cursory glance at the business plan determine whether or not the
proposal fits within the client’s areas of expertise. Investment bankers carry out initial
screening of all projects on the basis of some broad criteria.
For example, the screening process may limit projects to areas with which the venture
capitalist is familiar in terms of product, technology or market scope. The size of investment,
stage of financing and geographical location could be as the broad screening criteria.
If the plan manages to clear the initial screening round then the investment bankers
call for the detailed business plan from the entrepreneur. This business plan is the main tool
with the help of which client would make up his mind. Thus the entrepreneur should present
clarity of thinking about the business in the plan as the “Surprises can be great for parties, but
potentially could be fatal for businesses.”
Due Diligence
In the next and the help most important phase, due diligence is conducted by the client
with help from investment bankers to verify the accuracy of the statements made by the
entrepreneur. The two main types of due diligence conducted are business and legal.
The legal due diligence involves verification of the documents by the lawyers of the
VC. These documents include Memorandum and Articles of the Association, important
contracts, patents, copyrights, et cetera.
Business due diligence involves looking at the quality of people, quality of business
and the quality of investment. Quality of people is one of the most important criteria. There is
unanimity among theorists that venture capitalists prefer a grade A team with a grade B idea
to a grade B team with a grade A idea. However, how the quality of team is evaluated is a
source of controversy.
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Many feel that the integrity of the team members is the most important criterion. Past
research shows that trustworthiness, enthusiasm and expertise of the entrepreneur are the
most important factors considered by the VCs. It has also been that about 50-60 per cent of
the projects which are seriously considered for financing but are ultimately rejected is due to
the factors related to the entrepreneur.
Though visibility and transparency in a business may not necessarily inverse its
attractiveness, it is more of a necessity. One of the most important considerations for
investment bankers while judging an investment proposal is clarity of the exit mode and the
expected return from the project, which is quality of the investment. This is because the VC is
ultimately a fund and they (like mutual fund mangers) need to manage their portfolio to get
maximum return.
Finally, if the investment banker is positive after the due diligence, he will issue a
term sheet which is an indication that he seriously looking at the proposal. It is pertinent to
note that the term sheet is not the final document, but only a basis for further negotiations.
So, behind those mind boggling returns lies serious evaluation. Apart from luck and
being in the right business at the right time, venture capitalists must also be given due credit
for the detailed evaluation that they carry out before deciding to invest.
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CHAPTER 2
RESEARCH METHODOLOGY
Exploratory research design is used to perform the study. The random sampling
method used to collect the primary data from the customers in Mumbai city. The sample of
100 respondents was collected. Both primary and secondary data is used to perform the study.
A questionnaire was prepared for customer’s survey.
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The main purpose of the research was to confirm whether items loaded correctly to
the corresponding factors as identify by previous research. Through objectives, hypothesis is
tested to find out the relationship between factors affecting towards malls shopping.
The study falls under the category of descriptive research and uses survey method.
Descriptive research includes survey and fact finding enquiries of different kinds..it is
description of state of affairs as exists at present.
To collect the necessary information, carious parameters were developed with the
help of literature. The responses to these parameters were gathered, coded, tabulated and
analyzed. To measure the intensity of parameters close ended questionnaire was used. To
measure the attributes were measured on a point scale and the final score has calculated by
using weighted ranking method.
Primary data
Primary data are those which are collected for the first time and which could be
original in character. There are several methods of data collection, be particularly in
descriptive researches. This includes following methods. Observation method, Interview
method, Collection of data through questionnaires, such as warranty cards, contract analysis,
projective techniques, depth interviews and systems audits etc. A structured questionnaire
was built in correlation with objective of research and hypotheses. Thus data using
questionnaire was collected from shoppers.
The total sample size decided by researcher was 100 across Mumbai city. All clusters
namely, students, service class, business class, professional and others was considered for the
same. Research had made an attempt that the sample size was adequate, representative and
estimator with sufficiently high precision.
Secondary Data
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Secondary data represents a very powerful tool for the researcher as entire research
work is carried out on the basis of secondary data. It is nothing but the backbone of research
work. Secondary data is the one which has already been collected and analyzed by someone
else. Usually this analyzed data is available in the published from.
The concept regarding consumer behavior and other literature were taken from the different
reference books and text books. The articles which were based on the related topic were taken
from newspapers & magazines which were published. Literature from the research journals
were taken on have an insight of the research problems so that the gap in this research was
identified and hypotheses was formed. Last but not the least Literature from Websites was
also reviewed.
The data will be collected from shoppers responses were analyzed by using
appropriate statistical tools. Thus the research adopted for the study will be Quantitative
Descriptive Cross-sectional design to cover the various factors of the study.
Sampling Unit : The sampling unit was identified by the researcher before selection of a
sample. A sampling Unit may a natural geographical unit such as state, a district, a village. It
may be a social entity such as a family or a school. It may also be an individual.
CHAPTER 3
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OBSERVATION:
According to the above pie-chart the more number of investment is done in fixed deposit i.e.
29%, while the less numbers of investment is done in saving accounts i.e. 10%.
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Investment Banking
OBSERVATION:
According to the above pie-chart the more numbers of investment is done in life insurance
i.e. 45%, while the less numbers of investment is done in bonds i.e. 11%.
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Investment Banking
OBSERVATION:
According to the above pie-chart the more numbers of investment in traditional avenues is
done in real estate i.e. 63%, while the less numbers of investment is done in chit funds i.e.
10%
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Investment Banking
OBSERVATION:
According to the above pie-chart the more number of investment is done in private equity
investment i.e. 41%, while the less numbers is in hedge funds i.e. 10%.
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Investment Banking
OBSERVATION:
According to above pie-chart the more numbers of investment is done in private equity
investment i.e. 41%, while the less numbers is in hedge funds i.e. 10%
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Investment Banking
OBSERVATION:
According to the above pie-chart the more numbers of saving objectives is in home purchase
i.e. 29%, while the less number is retirement i.e. 13%.
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Investment Banking
OBSERVATION:
According to the above pie-chart the more number of investment objectives is in growth and
income i.e. 43%, while the less number is in short-term growth i.e. 10%.
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Investment Banking
OBSERVATION:
According to the above pie-chart the more numbers of investments purpose is in wealth
creation i.e. 32%, while the less numbers is is tax saving i.e. 16%.
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Investment Banking
OBSERVATION:
According to the above pie-chart the more numbers of people have budget for family
expenditure i.e. 96%, while the less numbers is 4%.
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OBSERVATION:
According to the above pie-chart the more numbers of people want their growth of
investment to be steadily i.e.45%, while the less numbers of peoples want their growth of
investment to be fast i.e. 26%.
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Investment Banking
OBSERVATION:
According to above pie-chart the more numbers of factors before investing is in safety of
principle i.e. 31%, while the less numbers of factors before investing is in low risk i.e.19%.
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OBSERVATION:
According to above pie-chart the more number of peoples invested in share market is 72%,
while the peoples who does not invested in share market is 28%.
A) If yes: Imagine that stock market drops after you invest in it then what will you do ?
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OBSERVATION:
According to above pie-chart the more numbers of people said yes will withdrawn their
money i.e. 42%, while the less numbers is 25%.
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Investment Banking
OBSERVATION:
According to above pie-chart the more numbers of peoples had sources of Investment advice
in internet i.e. 34%, while the less numbers is of magazines i.e.0%.
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OBSERVATION:
According to the above pie-chart the more numbers of peoples takes help of investment
bankers i.e. 83%, while the less numbers of peoples invest themselves in market i.e. 17%.
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Investment Banking
OBSERVATION:
According to above pie-chart the more numbers of peoples get to know about the investments
bankers by newspaper i.e.45%, while the less number is 13%.
13. Do you feel investments bankers are helpful in making good investments ?
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Investment Banking
OBSERVATION:
According to above pie-chart the more numbers of peoples feel investments bankers are
helpful in making good investments is 86%, while the less numbers of people does not feel
investment bankers are helpful in making good investments i.e. 14%
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