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Investment Banking Semester III Course Handout Credits: 3 Course Code: SL BK 610

Instructor: S.P.R.Vittal, sprvittal@ibshyderabad.org, sprvittal@gmail.com

MBA - Class of 2012

Sessions: 33

1. Course Objective, description: In spite of the recent turmoil in the IB industry, still it plays a dominant role in the areas of M&A deal structuring, corporate valuation, corporate advisory, and Public Issue management. The course is designed to familiarize students with field of investment banking and to make students understand various functions of investment banks. The contents of this course include financial markets, raising finance from domestic and international markets, merchant banking, corporate restructuring, valuation, Private equity funding, and Hedge fund operations. The recent developments in the field will be given due preference while delivering the course. Students are expected to have through knowledge of spreadsheets and all the fundamentals of finance. 2. Course dates : June 13 October 7, 2011 3. Session Timings: Section A Monday 10.45 12.00 Tuesday 10.45 12.00 4. Text Book Stowell, David P. (2010). An Introduction to Investment Banking, Private Equity and Hedge Funds, Academic Press (DPS) 5. Additional Material 1. Liaw, Thomas K. (2006). The Business of Investment Banking: A comprehensive overview. John Wiley & Sons, Inc. 2. Rosenbaum, Joshua & Pearl, Joshua. (2009). Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions. John Wiley & Sons, Inc 3. Subramanyam, Pratap G. (2008). Investment Banking: Concepts, Analysis and Cases. Tata McGraw Hill. 4. Subramanyam, Pratap G. (2006). Investment Banking: An odyssey in High Finance. Tata McGraw Hill. 5. Ellis, Charles D. (2008). The partnership: the making of Goldman Sachs. The Penguin Press. 6. Burrough, Brian & Helyar, John (1989). Barbarians at the Gate: The fall of RJR Nabisco. Harper Collins. 7. Annual Reports of Prime Database, various years 8. Wall Street ( Movie) 9. Barbarians at the Gate ( Movie) 10. Inside Job ( documentary) Section B Thursday 10.45 12.00 Friday 10.45 12.00 Section C Monday 3.25 4.40 pm Tuesday 2.00 3.15 pm

5. Course preparation and Methodology The course requires a thorough preparation on the part of the student. Students are expected to go through all the reading prescribed before every class and make a meaningful contribution through active class participation. The course is delivered through case discussions and problem solving. 6. Evaluation The evaluation consists of internal evaluation and end-semester examination. The internal evaluation consists of four components for a total of 60 marks. The end-term will be a three hours case-based examination for 100 marks with a weightage of 40%. Component 1 Description 1 Quiz (individual) 2 Written Case Analysis - 2 (group) 3 4 5 Group Project Class Participation End-Term examination 1 Date TBA TBA TBA Continuous TBA Sessions 8th session 17th & 27th session 23rd session Continuous TBA Weightage 10% 15% 15% 30% 30%

7. Schedule of classes, readings and cases Session Date No. 1 2 Topic Readings Case/Note/Article

5 to 10

Introduction to the course, Course Handout readings, and evaluation Chapter 10 - DPS Overview Investment Chapters 1 & 2 - DPS Banking : Post-crisis global investment banking firms, the business of investment banking, Regulation of the securities industry in USA and various other countries Financings Chapter 3 DPS Capital market financings Financing Considerations Financing alternatives IPO & FPO - Role of IB Distribution alternatives Shelf registration Green Shoe option Mergers and Chapter 4 DPS Acquisitions The core of M&A Credit rating and acquisition currency Role of IBs Acquisitions Due diligence and documentation Alternative sale processes Corporate restructuring Takeover defenses Valuation

History of Investment Banking (Note) HBSP 9-902-168

A Note on the Initial Public Offering Process HBSP 200018 Motilal Oswal Financial Services Ltd.: An IPO in India HBSP - 9-807-095

Freeport-McMoran: Financing an Acquisition DPS Case No.3 - KEL345-PDF-ENG Chen & Ritter (2000). The Seven percent solution. The Journal of Finance, Vol LV, No.3. Ritter, J.R., & Welch, Ivo. (2002). A Review of IPO Activity, Pricing, and Allocations. The Journal of Finance, Vol. LVII, No. 4. The Best Deal Gillette Could Get: Procter and Gambles Acquisition of Gillette DPS Case No.4 - KEL183-PDF-ENG Acquisition of Consolidated Rail Corp. (A) HBSP - 298006-PDF-ENG Acquisition of Consolidated Rail Corp. (B) HBSP - 298095-PDF-ENG Richard B. Robinson Jr. & John A. Pearce, Hostile Takeover Defenses That Maximize Shareholder Wealth - BH107

11 to 14

Session Date No. 15, 16, 17 & 18

Topic

Readings

Case/Note/Article A tale of two hedge funds: Magnetar and Peloton DPS Case No. 5KEL402-PDF-ENG Deutsche Bank: Finding Relative Value Trades - 205059-PDF-ENG Securities Trading: Front, Middle, and Back Office - 110070-PDF-ENG Note on the Asset Management Industry - 311013 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings - 705026-PDF-ENG Kmart, Sears, and ESL: How a Hedge Fund became one of the Worlds Largest Retailers DPS Case No.6 - KEL133-PDF-ENG Investment Banking in 2008 (A): The rise and fall of the Bear DPS Case No.1 - KEL378-PDF-ENG Investment Banking in 2008 (B): A brave new world DPS Case No.2 - KEL380-PDF-ENG Martingale Asset Management LP in 2008, 130/30 Funds, and a LowVolatility Strategy HBSP - 209047-PDF-ENG

Trading Chapter 5 - DPS Client related trading - equity trading FICC trading - Proprietary trading Risk Monitoring and Control - International banking Euro markets Japans markets Chinas financial markets Emerging financial markets Asset Management, Wealth Chapter 6 & 7 - DPS Management & Research, and Credit Rating

19, 20 & 21

22, 23, 24, 25 & 26

Hedge Funds Overview composition of investors industry concentration Performance Financial innovation Hedge fund investment strategies -

Chapter 11, 12 & 15 DPS

27, 28 29 & 30

Private Equity & Venture Capital Overview participants financing bridges secondary markets for private equity management practices and productivity value propositions for corporations - private equity as an alternative model for corporate governance Leveraged d Buyout LBO financial model determining cash flow available for debt service financial sponsors IRR determination

Chapters 16, 18 and 20 DPS

Cerebrus and the U.S. Auto Industry DPS Case No. 10 - KEL315PDF-ENG Shenzhen Development Bank - 210020-PDF-ENG How Venture Capitalists Evaluate Potential Venture Opportunities 805019-PDF-ENG

31, 32 & 33

Chapter 17 - DPS

Michel, Allen & Shaked, Israel. (1991). RJR Nabisco: A Case Study of a Complex Leveraged Buyout. The Financial Analysts Journal, Sept-Oct. The Toys R Us LBO DPS - Case No. 9 - KEL168-PDF-ENG