1. Zero based budgeting A method of budgeting in which all expenses must be justified for each new period.

Zero-based budgeting starts from a “zero base” and every function within an organization are analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one. It is, however, a time-consuming process that takes much longer than traditional, cost-based budgeting 2. Financial restructuring Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring. 3. Off shore financing An offshore financial centre (OFC), though not precisely defined, is usually a small, low-tax jurisdiction specializing in providing corporate and commercial services to non-resident offshore companies, and for the investment of offshore funds. An offshore financial centre (OFC), though not precisely defined, is usually a small, low-tax jurisdiction specializing in providing corporate and commercial services to non-resident offshore companies, and for the investment of offshore funds. 4. Technical and fundamental analysis Technical Analysis operates on the theory that market prices at any given point in time reflect all known factors affecting supply and demand for a particular market. Consequently, technical analysis focuses, not on evaluating those factors directly, but on an analysis of market prices themselves. This approach theorize that a detailed analysis of, among other things, actual daily, weekly and monthly price fluctuations is the most effective means of attempting to capitalize on the future course of price movements. Technical strategies generally utilize a series of mathematical measurements and calculations designed to monitor market activity. Trading decisions are based on signals generated by charts, manual calculations, computers or their combinations. Fundamental Analysis is based on the study of factors external to the trading markets which affect the supply and demand of a particular market. It is in stark contrast to technical analysis since it focuses, not on price but on factors like weather, government policies, domestic and foreign political and economic events and changing trade prospects. Fundamental analysis assumes that markets are imperfect, that information is not instantaneously assimilated or disseminated and that econometric models can be constructed to generate equilibrium prices, which may indicate that current prices are inconsistent with underlying economic conditions, and will, accordingly, change in the future.

5. Badla system As the term itself signifies, 'Badla' means 'something in return'. Badla is the charge, which the investor pays for carrying forward his position. This hedge tool lets the investor take a position in a scrip without actually taking delivery of the stock, thus carrying forward his position on the payment of small margin. The badla system of transactions has been in practice for several decades in the Stock Exchange, Mumbai and serves 3 needs of any stock exchange: A) Quasi-hedging: If an investor feels that the price of a particular share is expected to go up or down, without giving or taking the delivery he can participate in the possible volatility of the share.

. they are called dealer papers. X will only have to pay interest on the funds he has borrowed. Reverse repo: Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. A CP when issued by a company directly to investor is called direct paper. A reduction in the repo rate will help banks to get money at a cheaper rate. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. Commercial papers and ICDs Commercial papers: It is a short-term unsecured promissory note with a fixed maturity issued by firms who enjoy fairly good credit rating. An investor can either take the services of a badla financier or can assume the role of a badla financier and lend either his money or securities. It can cause the money to be drawn out of the banking system. the financier steps into the CF system and provides the finance to fund the purchase The scheme is known as "Vyaj Badla" or "Badla" financing. if you have a sale position and do not have the shares to deliver. but these bonds also give the bondholder the option to convert the bond into stock 9. X has bought a stock and does not have the funds to take delivery he can arrange a financier through this carrying-forward mechanism. FCCB A type of convertible bond issued in a currency different than the issuer's domestic currency. advisor or rendering corporate advisory services in relation to issue management. 7. consultant.B) Stock lending: If a stock lender wishes to short sell without owning the underlying security. Maturity period could be varying between 3 months and less than one year. Vis-à-vis. The financier would make the payment at the prevailing market rate and would take delivery of the shares on X's behalf. It acts like a bond by making regular coupon and principal payments. or subscribing to securities as a manager . The rate of interest on ICD varies depending upon the amount involved and time period. When the repo rate increases borrowing from RBI becomes more expensive. Merchant banker The securities and exchange board of India rules 1992 defines merchant banker as “ a person who is engaged in the business of issue management either by making arrangements regarding selling. Generally the interest rates are higher than the bank interest rate. It is sold at a discount from its face value but redeemable at the face value. Minimum size of cp: RS 25 lakhs Denomination of cp: 5 lakhs or multiple thereof. Banks are always happy to lend money to RBI since their money are in safe hands with a good interest. A convertible bond is a mix between a debt and equity instrument. When CPs are issued by securities dealers on behalf of their corporate customers. he employs the badla system and lends his stock for a charge. 8. 6. C) Financing mechanism: If he wishes to buy the share without paying the full consideration. In other words. The company can borrow funds from other companies having surplus liquidity. For example. buying . ICD (Inter corporate deposits): ICDs are taken by 1 company from another. you can still arrange through the stock exchange for a lender of securities. the money being raised by the issuing company is in the form of a foreign currency. Repos and reverse repo Repo: Repo rate is the rate at which our banks borrow rupees from RBI.

The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year. The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. GDR: It refers to equity shares issued by Indian companies outside india in the form of depository receipts. It helps the company to diversify share holder base . It fetches higher price from international market. make acquisitions. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. during the period for which the book for the issue is open. it involve risk. The LIBOR is fixed on a daily basis by the British Bankers' Association. It support entrepreneurial talent and business skills by financing them to exploit market opportunities and obtain long term capital gains. 12. Private equity fund Equity capital that is not quoted on a public exchange. It provides greater prestige and recognition to BLUE chip companies as they get listed on NYSE. commerlization of new technologies and support to small and medium entrepreneurs in the manufacturing and service sector. Capital for private equity is raised from retail and institutional investors. expand working capital within an owned company. bids are collected from investors at various prices which are above or equal to the floor price. 11. 14. It is basically capital issuance process used in mega public issues.10. The process aims at tapping both wholesale and retail investors. in marketable size. It is a mechanism where. The interest rate at which banks offer to lend funds in the interbank market. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company. It is a provision of risk bearing capital usually in the form of participation in equity companies with high growth potential . The offer issue price is then determined after the bid closing daye based on certain evaluation criteria. or to strengthen a balance sheet. and can be used to fund new technologies. Venture capital It is a institution that focus on new entrepreneurs. 13. It injects long term capital into small and medium sector. which aids price abd demand discovery. 15. from other banks in the London interbank market. An interest rate at which banks can borrow funds. It is a process used for marketing a public pffer of equity shares of a company.return spectrum. ADR/GDR ADR (American deposit receipts): It refers to equity share issued by indian company in US market in the form of depository receipts. It taps US equity market. The trade freely in the overseas market like any other dollardenominated security. Book building process. wellestablished and financially sound companies across key sectors. . Prime lending rate/ LIBOR London Inter Bank Offered Rate. Sensitive index It was calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing large.

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