Fin Fastrack

Session on IB/PE
 Awareness Preparation

 What is Investment Banking?

 Valuation basic
Agenda  Equity, Debt market
 Deals
 Deal Flow
 Company specific prep
What is IB/ PE
  Raising Capital
 Debt, Equity
Investment  Primary Market- ECM , DCM
Banking  Secondary Market- Private placements (Debt, Equity)
 M&A advisory
  Making Industry Overview
 Company Profiles
 Pitch Books, Information Memorandum
 Analyzing Financial, Legal and Commercial Due Diligence
 Building / Vetting Valuation Models
Investment  Co-ordinating between various parties like investor, seller,
Banking consulting firms doing Due Diligence, I Bankers
 Maintaining Data Rooms
 Vetting Term Sheet
 Reading sector reports
 Using Bloomberg for getting bond details, league tables etc.
 Finding transaction multiples of the deals relevant to your sector
  Take fees ~ 0.5-1.5% of the issue size
 Benchmark fees + performance fees (variable)
Investment  MNC banks have edge in doing cross border deals
Banking-  Some banks only do big ticket size transactions ( >$100-200 mn)
Business Model  Local banks- Axis, Yes ,etc- they do Indian deals – small size –
competitive pricing
 Virtual Room:
Buyer/Seller Advanced
All Data
scout Stage NDA
Disclosed

Banks Prepare Queries

Bidding
Pitch Book Answered
Deal Flow
(M&A)- Sell side
case Selection IM Given to TS Acceptance
Process Counterparties & Deal Signing

Teaser to
NDA Signed;
Prospective Deal Closing
IM Prepared
Buyers
  Buyer or seller scouts for Investment banks
 Banks prepare pitch books
 Selection happens-Cover letter, Statutory Terms and Conditions
 Teaser to prospective buyers- investment opportunity snapshot
(growth projection)
 NDA signed and Preparation of IM
Deal Flow  IM given to prospective counterparties
 IM- Information Memorandum – full details of the asset (future projections,
(M&A)- Sell side assumptions, detailed info about asset)

case  (equivalent to DRHP- in case of equity primary market/IPO)

 Queries of prospective buyer answered
 Advanced stages NDA signing
 Virtual room – all the data disclosed
 Bids submitted
 (Term sheet) Acceptance and signing of deal
 Deal closing ( money transfer, legalities, Competition commission clearance, etc etc)
 Institutional
Buyer/Seller Investors; Allotment of
scout Retail Shares; Listing
Subscription

Banks Prepare Anchor

Deal Flow (IPO) Pitch Book Investors

RHP Filing with

Selection
SEBI (Price
Process (DRHP)
Band)
  Buyer or seller scouts for Investment banks
 Banks prepare pitch books
 Selection happens- Preparation of DRHP
Deal Flow (IPO)  RHP filing with SEBI- price band
 Anchor investors
 Institutional investors , Retail subscription (3 day open)
 Allotment of shares and listing
Preparation
  HR Questions – Why IB, Finance, Goldman or Morgan etc – VERY CRUCIAL
 Macro Economic View – E.g. - Bonds, NPAs, Oil, Japan, China, Fed, RBI
 Valuation basics- DCF, Multiples
 ( Refer Damodaran videos on youtube)
 FCFF, FCFE, WACC, cost of equity, cost of debt
 Enterprise value, minority interest
Preparation  Looking balance sheet and income statement ( FA basics)
 Multiples (P/E, EV/EBITDA, EV/sales, etc etc)
 Industry specific valuation-Valuation matrix (absolute / relative) used for your
industry and the current average multiples in your specific industry.

Knowledge about 2-3 sectors ( in-depth)

Strategic View- Pick any 1/2 sectors of your choice or based on your CV –
know their value chain, industry structure, key strategic drivers, Porters 5
forces (maybe), top 3 market players (incl. their share, market cap),
difference between the market players, their few accounting ratios and
multiples
  Read about Investment Banking business – Deal flows
in India, rankings, debt deals, M&A Deals, PE Deals etc.
 Recent deals in past 1 year across all sectors
 Know the transactions / deals in your sector preferable
past 3 years and the multiples at which deals were
completed
Preparation
 Read comprehensively about at least 2-3 deals so that
you can talk about the same during calls, interviews
(Read bank specific which you are targeting)
 Big deals MUST – Time Warner-AT&T; Makemytrip-
Ibibo
  Read about the Bank and about the deals which they have done in
India. Know few facts about Banks like Barclays do not have IPO
division.
 Avendus- Concentrated on Startups PE fundings, Taxiforsure-ola(
Preparation- can ask a estimate like no. of cabs in Bangalore or India)
Company  Citi – major focus on primary markets
 Temasek- also do PIPE- no sector specific- invest on themes (It will
Specific test your investment methodology)
Thank You!