Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
COLLEGE OF COMMERCE
BORIVALI (WEST), MUMBAI-400092
PROJECT REPORT ON
INVESTMENT BANKING
UNIVERSITY OF MUMBAI
TYBMS (FINANCE)
SEMESTER VI
ACADEMIC YEAR: 2018-2019
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DECLARATION BY LEARNER
I the undersigned MAYUR PATEL here by, declare that the work embodied in
this project work titled “INVESTMENT BANKING” forms my own
contribution to the research work carried out under the guidance of Sandip
Rawool 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, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical conduct.
Certified by
Name and Signature of the Guiding Teacher
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ACKNOWLEDGMENT
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TABLE OF CONTENT
Executive Summary 06
3. Definition 10
4
18. Players in Investment Banking 48
19. Conclusion 56
20. Bibliography 57
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EXECUTIVE SUMMARY
Although Investment banking activity was ushered in two decades ago, it was only in 1992
after the formation of Securities and Exchange Board of India that it is defined and a set of
rules and regulations in place. Today an investment banker is who has the ability to
merchandise that is, create or expand a need and fulfill capital requirements.
I have given an overview about the financial markets and the role of investment bankers in
the growth of these markets. My project covers how the investment banks works, rules &
regulations laid by SEBI & its impact on the Investment banking activities. Their
importance in the economy is expected to grow even further in the coming years with an
increasing proportion of household savings getting invested in corporate & other securities.
Hence, my project covers the challenges and advantages, which India will get and is getting
by Investment banking activities. I have covered several services provided by Investment
bankers & the role of Investment bankers in providing those services to the business world.
Finally, the top players, which exist in investment banking, are also covered; their services
are also been focused. To get the practical knowledge about Investment banking activities I
have interviewed visited State bank of India, Kotak mahindra bank and SPA Investment
bankers ltd.
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INTRODUCTION TO INVESTMENT BANKING
The term Investment banking has its origin in the trading methods of countries in the late
eighteenth and early nineteenth century when trade-taking place was financed by bill of
exchange drawn by investment in houses. At that time the investment s were merely
financing their own activities. As international trade grew and other lesser-known names
wanted to import goods from abroad, the established investment s ‘lent their names’ to the
newcomers by agreeing to accept bills of exchange on their behalf. The acceptance houses
would charge a commission for this service and thus there grew up the business of accepting
bills of finance trade not merely of themselves, but of others. Acceptance business thus
became and to a degree always has been hallmark of true Investment Banks.
The second historical of Investment Banks was the raising of capital for foreign Government.
In many cases, the Investment Banks have been trading in the countries concerned and
gained the confidence of Governments and other authorities in those countries. Thus the
second principal ingredient of Investment banking became and still is raising of capital
through the issue of stocks and bonds. Therefore, investment banks can be accepting houses
or issuing houses or both. Investment banking started in the beginning of 20 th century in UK
and USA. More recently, the services offered by Investment Banks have entered into the
other areas of operations. Their role is wide ranging and they can now provide most of the
financial services required by a company, touching almost all aspects of establishing and
running of industrial units on sound financial footing.
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HISTORY OF INVESTMENT BANKING
During the seventeenth and most of the eighteenth century international finance was centred
on Amsterdam. Consequently Amsterdam investment s became the first masters of the
various financial techniques and developments which, in the course of time, became
identified with the emergent profession of ‘Investment bankers’.
Commercial Banking and Investment Banking are often confused with Investment Banking.
In many ways, there may be similarities in their functions. However, in certain ways,
Investment banking is distinctly different from commercial Banking and Investment
Banking.
The primary function of a commercial bank is to receive deposits from the public and lend
the same to others. Commercial Banks can undertake some of the Investment banking
activities like Issue Management whereas Investment banking Units can not undertake
commercial banking activities. However, the functions of Investment banking may not
widely vary from Investment Banking. The Investment Banker mainly deals with Issue
Management, post issue services, corporate adviser services etc. the Investment Banker
undertaken trading in securities, Investment advisers and Bought out deals which are not the
main activities of Investment bankers.
In today`s Scenario the Investment banker and management consultants undertake advisory
services to the corporate sector. The Investment Banker advices corporation and firms
relating to opening of issues, receiving loans etc, which the management consultants also do.
The management consultant have a wide area operations like production, Marketing,
Personnel Relations, of finance etc. but they lack statutory recognition to undertake capital
market related activities which has enabled the investment banker to cater to the needs of the
Corporate Sector.
An investment bank may be considered as an institution which centres its operation on all or
most of the following activities.
corporate financial advice, on such diverse matters as new share and bond issues, capital
reconstructions, mergers and acquisitions;
The taking of deposits and currency, money market operations including foreign exchange
dealing
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Medium-term lending and syndication of loans;
Acceptance credits and all forms of export finance;
The holding and dealing in quoted and unquoted investment; and
Fund management on behalf of clients, most typically pension funds, unit trust, investment
trusts and wealthy individuals.
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DEFINITION
The first authoritative definition for the term ‘Investment Banker’ has been given in the Rule
2 (e) of SEBI (Investment bankers) Rules, 1922. Accordingly, “A Investment Banker means
any person who is engaged in the business of Issue Management either by making
arrangements regarding selling, buying or subscribing to Securities as Manager, Consultant,
Adviser of rendering Corporate Advisory Service in relation to such Issue Management.
Sec/5 (b) of the Banking Regulation Act, 1949 defines Banking as “accepting, for the
purpose of lending or investment of deposits of money from the public, repayable on demand
or otherwise and with drawable by cheque, draft, order or otherwise.
The Notification of the Ministry of Finance defines a investment banker as, “any person
who is engaged in the business of issue management either by making arrangements
regarding selling, buying or subscribing to the securities as manager, consult, adviser or
rendering corporate advisory service in relation to such issue management”.
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EVOLUTION & EMERGENCE OF INVESTMENT
BANKING
India has entered the 21st century as one of the Asia`s most dynamic economies. This is the
part of the assessment made by International Financial and Capital Market Institutions based
on India`s economic and financial reforms initiated in 1991 and brought to fruition in various
budget.
The progress of any economy mainly depends on the efficient financial system of the
country. Indian economy is no exception financial system of the country. The importance of
the financial sector reforms affirms an effective means for solving the problems of economic,
financial and social in India and elsewhere in the developing nations of the world. The
progress of the Securities Industry of any country depends mainly on the flow of funds. In
fact, capital generation is the lifeblood of the capital market without which the health and
soundness of the financial system cannot be geared and for which well-developed capital
market as well as money market is essential.
India`s capital market is among the largest in the developing world. The market is comprised
of 24 stock exchanges transacting long-term debt; debentures and equity shares both
electronic and physical forms. Derivatives financial instruments are also be added to the
market shortly. The number of firms listed on the Indian Stock Exchange is more than the
USA. Market Capitalisation of listed firms is 1980s was similar to Brazil, Malaysia,
Singapore and Denmark.
The capital market of the country, however, underwent dramatic changes since the beginning
of 1980s basically because of a progressive realization that the command economy on which
the emphasis was placed could not lead to higher levels of economic development and that a
slant towards a market-oriented economy is necessary.
It is in the context of fast expanding economy and a liberalized and deregulated atmosphere
that the growth of the Indian Stock Market activities has to be viewed. No wonder that the
markets have registered a quantum jump judge by any standards.
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INVESTMENT BANKING SERVICES: SCOPE &
SERVICES RENDERED
In the present dynamic environment where public money is playing a vital role in financing a
large number of projects, both in the public and private sectors, Investment banking has a
significant role in managing the show and meeting the growing demands for funds by the
corporate sector. Investment banking includes a whole gamut of activities which meet the
needs of both corporate and individual investors and which range from identification,
evaluation, promoting and financing of projects (both domestic and overseas) by raising
resources in the equity and long-term loans, to organize and participate in international
consortia, to raise foreign currency loans and to offer advisory services on various matters
related to finance, investment, capital management, structure, mergers, amalgamation,
takeovers and acquisitions. They also play a useful role in the portfolio management, money
market operations, venture capital, leasing, etc. Investment bankers act as a guide for the
entrepreneurs who are unaware, or have little knowledge or experience, of the complexities
involved in the above spheres.
In addition to the above, the scope of Investment banking services has extended to providing
advisory services to companies to increase or divest their stakes, public sector undertaking
disinvestments, international issues, etc. With the OTCEI being operation now, Investment
bankers will have a key role to play in terms of appraising the projects and offering two-way
quotes for market making in case of entrepreneur going for listing in the above exchange.
Investment bankers act as a critical link between the corporate who are intend to raise funds
and the investors who are interested to invest in securities Industry. Besides issue
management, the Investment bankers are also undertake the activities like underwriting
connected with the public issue management business, Managing/advising on International
offerings of Debt/Equity i.e., GDR, ADR, Bonds and other instruments, Private placement
securities, Primary or Satellite dealership of government securities, Corporate Advisory
services related to securities market (e.g., Takeovers, acquisitions, disengagement), Stock-
Broking, Advisory Services for projects, Syndication of rupee term loans and International
Financial Advisory Services. The services can be represented as follows:-
Among the important financial intermediaries are the investment bankers. The services of
Investment bankers have been identified in India with just issue management. It is quite
common to come across reference to Investment banking and financial services as though
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they are distinct categories. The services provided by investment banks depend on their
inclination and resources - technical and financial. Investment bankers (Category 1) are
mandated by SEBI to manage public issues (as lead managers) and open offers in take-overs.
These two activities have major implications for the integrity of the market. They affect
investors' interest and, therefore, transparency has to be ensured. These are also areas where
compliance can be monitored and enforced.
Investment banks are rendering diverse services and functions, which are as follows:
ISSUE MANAGEMENT:
The public issue of securities is the core of Investment banking function. At one time it was
constructed as the sole function. Investment bankers were identified as issue houses. It was
later perceived that they provide other financial services. When companies seek to raise
resources for implementation of a new project or finance expansion or modernization or
diversification of an existing unit or fund long term working capital requirement, they retain
the services of a investment banker. To a large extent the type of issue would vary with the
purpose for which funds are raised. Investment bankers when retained as managers to issue
will have to assist the company in all the stages connected with public issue.
The investment bankers help corporate to raise money from the markets through the issue of
shares, debentures, bonds etc. They are designated as managers to the issue. Their main
business is to attract public money to capital issues.
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Obtaining the daily report of application money collected at various branches.
Obtaining subscription to the issue.
After the close of the issue, obtaining consent of stock exchange for deciding basis of
allotment etc.
The promoter also needs to decide whether to go in for a fresh issue or to go for a rights
issue. However this will depend mainly on the quantum of funds that the company needs to
raise. The success of the issue is dependent on the selection of the right type of security. In
this matter, the expert advice of investment bankers is of immense importance.
In the issue management the investment bankers have to coordinate the various agencies to
the issue. The success of the issue depends on the cooperation of all the agencies involved.
The investment bankers offer following services during the public issues:
Preparing an action plan and budget for the total expenses for the issue.
Preparation of application to SEBI and assistance in obtaining the consent from SEBI.
Drafting of the prospectus.
Selection of underwriters, Brokers etc.
Selection of bankers to the issue.
Selection of advertising agency for publicity.
Obtaining approval of the institutional underwriters and stock exchanges for publication of
the prospectus.
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Companies are free to appoint one or more agencies as Managers to an issue. SEBI
guidelines insist that all issues should be managed by at least one authorized investment
banker, functioning either as the sole or lead manager to the issue. Ordinarily, not more than
two investment bankers should be associated as lead managers, advisors and consultants to a
public issue. In issues of over Rs. 100 crores, the number could be up to a maximum of four.
The responsibilities of investment bankers in management of public issues are many. Some
of these are:
We have seen that many unscrupulous promoters have raised money from the market. This
has hurt the investors a lot and has also made investors nervous about stock market
investments. This in turn affects the functioning of stock markets both the primary and the
secondary markets. It is therefore necessary that investment bankers are satisfied with the
viability of the project, which they can then sell to the investors with confidence. It is
therefore important for the reputation of investment bankers, to only associate themselves
with good issues.
The investment banker should act as the custodians of the investors money and this puts a lot
of responsibility on them. To discharge this function the investment bankers have to exercise
due diligence independent by verifying the contents of the prospectus and the reasonableness
of the views expressed therein.
It is the responsibility of the investment bankers to get the securities listed on all the stock
exchanges mentioned in the prospectus. With the introduction of Demat accounts the
complaints about allotment have surely gone down. It is the responsibility of the investment
bankers to ensure timely refunds and allotment of securities to the investors.
The investment bankers have to certify that they verified everything and that they believe it
to be true. This assures the investing public about the safety of their investment. The
precautions by the investment bankers would ensure that all the fake companies, whose
intention is to defraud the investors, don’t have access to the market.
UNDERWRITING
Underwriting is like insurance against the failure of an issue. It is a guarantee to the issuing
the company, that the money that it requires for its project will definitely be raised. It means
that even if the issue is not fully subscribed to by the public, the underwriters will make up
the short fall.
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Underwriting involves the underwriter agreeing to subscribe directly, or to procure
subscription for the unsubscribe portion of the issue, which is not taken up. For the risk that
the underwriter takes, he is paid commission. New companies entering the markets for the
first time, always face number of problems in raising funds from the market. One of the
biggest problems of course that the company is not well known to the investors and many of
them will be unwilling to invest their money in such ventures. Many a times even existing
companies may find it difficult to raise money, due to some reasons. Issuing companies
therefore approach different underwriters with a request to underwrite the issue.
Underwriters on their part need to satisfy themselves about the viability of the project and
also about the integrity of the promoters of the company. It must be noted that when an issue
is under subscribed, the underwriters will pick the shares and only if the project is good
enough, then in future they can sell the shares in the market and get not only their money
back, but can also make a decent profit as well.
It is obligatory for the investment bankers to accept a minimum 5% underwriting in the issue
subject to a ceiling. By taking underwriting in an issue managed by them, they show their
full commitment to the issue that they are managing.
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being takeover may work out an anti takeover strategy to counter the threat. Investment
bankers provide following services in M&A: -
Identification of potential takeover targets.
Financial & Technical appraisal of the merger/takeover proposal.
Negotiation with the parties for arriving at the suitable price or exchange ratio.
Assistance in obtaining necessary approval & addressing procedural & legal issues.
PROJECT COUNSELLING
Project counseling is very important and lucrative Investment banking services which only
very few investment bankers having advantages of knowledge, skills and experience over
others are able to render satisfactorily. The corporate seek advice in respect of identification
of profitable investment opportunities in the related business areas (like forward/backward
integration) or as part of diversification process. The investment bankers carry out detailed
studies on product demand patterns, cost structures, etc., to enable the corporate in
preparation of feasibility study may involve arrangement of a foreign collaboration, advice
on technical parameters and also legal issues.
Scope of services
Project counseling services are needed by industrial entrepreneurs in India in the following
areas: -
Preparation of project report
Deciding upon the financing pattern to finance the cost of the project.
Aspects of project appraisal with financial institutions/banks.
Project report
Project report consists of technical process, location, management profile, means of
financing, reports on market surveys and market explorations. Investment bankers advise the
clients on project preparation. Investment bankers, on behalf of their clients, engage
technical consultants specialized in the specific area, and marketing experts to prepare
technical feasibility report and market survey reports. Investment bankers maintain the list
of such experts approves by financial institutions and assign the work to these experts.
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Project report about the proposed activity is prepared to obtain government approvals
particularly in the following areas:
Grant of industrial license to undertake specified industrial activity.
Foreign investment and technology tie-up.
Grant import license for importing raw material, plant, machinery and equipments.
Grant of foreign exchange allocation for import of capital goods or raw materials, etc.
Grant of subsidies and other concessions from the government at center or state
levels or from government sponsored agencies, etc.
LOAN SYNDICATION
It refers to assistance rendered by investment banks to get mainly term loans for projects.
Such loans may be obtained from a single development finance institution or a syndicate or
consortium as in the case of large term loans. Investment banks can also help corporate
clients to raise syndicated loans from commercial banks.
Scope of service
Once the client company has decided about the project proposed to be undertaken, the next
step is looking for the sources wherefrom funds could be procured to implement the project.
The responsibility of locating the sources of finance, approaching these sources by putting in
requisite prescribed applications and complying with all the formalities involved in the
sanction and disbursal of loan rests with the investment bankers who provide the service of
loan/credit syndication.
Loan syndication in the case of domestic borrowing is undertaken with the institutional
lenders and the banks. Amongst institutional lenders the following institutions are the main
suppliers of the long and medium term funds with which the investment bankers contact,
liaison and arrange loans working for and on behalf of their clients.
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iii. State Industrial & Investment Corporations (SIICs)
3. All India level investment institutions
i. Life Insurance Corporation of India (LIC)
ii. Unit Trust of India (UTI)
iii. General Insurance Corporation of India (GIC) & its subsidiary companies.
4. Commercial banks: Commercial banks join in consortium loan being provided by
the above institutions.
5. Mutual Funds & Venture Capital Funds: these funds generally invest in equity but
mutual funds contribute to the issues of Debentures/Bonds on private placement basis as well
as subscribe to public issues.
RESTRUCTURING SERVICES
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
banker participates in different activities at various stages which include understanding the
objectives behind the strategy (objectives 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.
CAPITAL ASSISTANCE
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.
It should be understood that interest rates are not the 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 the 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.
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He also knows 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.
FACTORING SERVICE
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). The
factor buys all the client`s outstanding invoices and takes over all the subsequent dealings with the
buyer/importer/customer. It is short-term debt financing. Here three parties are involved
1. The factoring organization /firms
2. The manufacturer/exporter/seller
3. The importer/customer/buyer
ASSET SECURITIZATION
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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. The whole process is done by the Special Purpose Vehicle (SPV). 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 asset is generally considered on the basis of the following:
(I) Quality of assets
(ii) Certainty of repayment
(iii) Good ranking from the credit rating agency.
The process of asset securitization takes place in the following firms:
Originating Institutions/Firm
Special Purpose Vehicle (SPV)
Investment Banker (MB)
FOREX SERVICES
This aspect of banking is becoming increasingly important as the forex flow in the country is
increasing and the international markets are funding the operations of the corporate in India.
The success of any business is measured by the fund management; this makes treasury
management as a very critical finance function. Management of treasury profit center
requires a wide variety of knowledge in the area of global money markets and financial
instruments such as deposit certificates, treasury bills, forecasting, source evaluation and cost
of domestic and foreign currency funds. Treasury and risk management ensures cost
effectiveness in planning strategies in this era of deregulation.
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HIRE PURCHASE SERVICE
It involves a system under which term loans for purchases of goods and services are
advanced to be liquidated in stages through a contractual obligation. The goods whose
purchases are thus financed may be consumer goods or producer goods or they may be
simply services such as air travel. Hire-purchase credit may be provided by the seller himself
or by any financial institution. However, unlike in other countries, the emphasis in India is
on the provision of instalment credit for productive goods and services rather than for purely
consumer goods.
VENTURE CAPITAL
Venture capital is money provided by professionals who invest alongside management in
young, rapidly growing companies that have the potential to develop into significant
economic contributors. Venture capital is an important source of equity for start-up
companies. Professionally managed venture capital firms generally are private partnerships
or closely-held corporations funded by private and public pension funds, endowment funds,
foundations, corporations, wealthy individuals, foreign investors, and the venture capitalists
themselves.
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Role of Investment Banker
Investment bankers assist ventures proposals of technocrats, with high technology, which are new,
and high risk.
To seek assistance from venture capital funds or companies.
They also provide technical, financial & managerial services & help the company to set up a track
record.
The assistance should mainly be for equity support, through loan support to supplement this may
be extended.
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INVESTMENT BANKING IN INDIA
In India prior to the enactment of Indian Companies Act, 1956,managing agents acted as
issue houses for securities, evaluated project reports, planned capital structure and to some
extent provided venture capital for new firms. Few share broking firms also functioned as
investment bankers.
The need for specialized Investment banking services was felt in India with the rapid growth
in the number and size of the issues made in the primary market. The Investment banking
services were started by foreign banks, namely the National Grindlays Bank in 1967 and
the City Bank in 1970. The Banking Commission in its report in 1972 recommended the
setting up of Investment banking institutions. This marked the beginning of specialized
Investment banking in India.
To begin with, Investment banking services were offered along with other traditional banking
services. In the mid-Eighties, the Banking Regulation Act was amended permitting
commercial banks to offer a wide range of financial services through the subsidy rule. The
State Bank of India was the first India Bank to set up Investment banking division in
1972. Later ICICI set up its Investment banking division followed by Bank of India, Bank of
Baroda, Canada Bank, Punjab National Bank and UCO Bank. The Investment banking
gained prominence during 1983-84 due to new issue boom.
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INVESTMENT BANKING: PAST AND PRESENT
Many banks entered Investment banking in the 1960s to take advantage of the economies of
scope produced when private equity investing is added to other bank services, particularly
commercial lending. As lenders to small and medium-sized companies, banks become
knowledgeable about individual firms’ products and prospects and consequently are natural
providers of direct private equity investment to these firms. As mentioned above, commercial
banks were the largest providers of venture capital in the 1960s. In the middle to late 1980s,
the decision to enter Investment banking was thrust on other banks and bank holding
companies by unforeseen events. In those years, as a result of the LDC (less-developed-
country) debt crisis, many banks received private equity from developing nations in return
for their defaulted loans. At that time, many of these banks set up Investment banking
subsidiaries to try to get some value from this private equity.
Also at about that time, most commercial banks began refocusing their private equity
investments to middle-market and public companies (often low-tech, already profitable
companies) and, rather than providing seed capital, financed expansion or changes in capital
structure and ownership. Most particularly, they took equity positions in LBOs, takeovers, or
recapitalizations or provided subordinated debt in the form of bridge loans to facilitate the
transaction. Often they did both. Commercial banks financed much of the LBO activity of
the 1980s.Then, in the mid-1990s, major commercial banks began once again focusing on
venture capital, where they had substantial expertise from their previous exposure to this
kind of investment. Some of these recent venture-capital investments have been
spectacularly successful. For example, the Internet search engine Lycos was a 1998
investment of Chase Manhattan`s venture-capital arm. Commercial banks are permitted to
report either realized or unrealized gains on their investment -banking portfolios, as long as
they are consistent in the reporting. This option makes it difficult for one to compare
different entities’ financial results and could lead to an overly liberal reporting of profits.
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INVESTMENT BANKING: CURRENT SCENARIO
Investment banking is an area that we need to build and grow in the years to come. As India
forms part of the global village, it becomes increasingly necessary for us to look at this
business in a more holistic manner.
Obviously, international players with strong domestic partners such as DSP Merrill Lynch,
JM Morgan Stanley, Kotak Mahindra Capital, together with experienced organisations like
Enam and institutional backed investment bankers such as ICICI Securities, etc., are the ones
who have expertise, muscle, and placement power in a greater measure than relatively new
entrants.
The red hot economy is the obvious starting point. India is likely to end the year with GDP
growth in excess of 7 percent. Companies and private equity investors are sitting on large
piles of cash. In 2006 deal activity was largely restricted to the IT and Telecom sectors.
Thus, while there is a steady flow of deals, there is now a shortage of talent to do the job.
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RECENT DEVELOPMENTS IN INVESTMENT
BANKING IN INDIA
Growth in Banking Sector Deposits
o During FY06–17, deposits grew at a CAGR of 12.03 per cent and reached
1.54 trillion by FY171.
o Strong growth in savings amid rising disposable income levels are the major
factors influencing deposit growth.
o Access to banking system has also improved over the years due to persistent
government efforts to promote banking-technology and promote expansion in unbanked and
non-metropolitan regions.
o At the same time India’s banking sector has remained stable despite global
upheavals, thereby retaining public confidence over the years.
o Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY), have also
increased. As on November 9, 2016, US$ 6,971.68 million were deposited, while 255.1
million accounts were opened
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o Qatar’s Doha Bank plans to apply to the Qatar Central Bank and Reserve
Bank of India for permission to establish a local subsidiary in India, with the vision to create
a retail branch network in India.
o Fairfax Financial Holdings, a Canada-based financial services firm, has
received an approval from the RBI to acquire a majority 51 per cent stake in Kerala-based
Catholic Syrian Bank for Rs 1,000 crore (US$ 150 million), which will be the first takeover
of an Indian bank by a non-banking financial entity, after RBI tweaked ownership norms.
o IndiaPost has received the final license from RBI to start its payment bank
operations, thus becoming the third entity in India after Bharti Airtel and Paytm to receive
payment bank license from RBI.
o Microfinance firm Ujjivan Financial Services Ltd has announced starting of
banking services across its branches under the name of Ujjivan Small Finance Bank Ltd, thus
becoming the largest among five small banks which are scheduled to start their operations or
have already started.
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Investment banks do not provide any consultancy on an M&A transaction, but merely
verify and submit a report to the authorities concerned, according to the Central Board for
Excise and Customs (CBEC).
Barring the services of investment banks, any service rendered in relation to an
M&A transaction will be covered under the scope of taxable service provided by the
management consultant and will be liable to service tax, the Board has ruled. Industry
representatives held that services provided in respect of M&A cannot be construed as a
management consultancy service, but were in the nature of financial advisory service.
They further opined that acquisition or divesting of shareholdings was a purely
financial transaction and distinct from the advice or service provided prior to taking a
decision to divest, merge or acquire an organisation.
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INDIA’S TOP 10 M&A PLAYERS
PLAYERS Rank Rank Mkt Mkt Value Deals
‘05 ’04 share’05 share’04 ($m)
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NEED & IMPORTANCE OF INVESTMENT BANKING
IN INDIA
Important reason for the growth of Investment banking is due to exerting excess demand on
the sources of funds forever expanding industry and trade.
Corporate sector had the only alternative to avail of the capital market services for meeting
their long-term financial requirements through capital issues of equity and debentures.
With the growing demand for funds there was pressure on capital market that enthused the
commercial banks, share brokers and financial consultancy firms to enter into the field of
Investment banking and share the growing capital market.
In India have opened their Investment banking windows and are competing in this field, and
also doing advisory functions as investment bankers as well as managing public issues in
syndication with other investment bankers.
Investment banks can play highly significant role in mobilizing funds of savers to investible
channels assuring promising return on investments. activity.
With the growth of Investment banking profession corporate enterprises in both public and
private, sectors would be able to meet the growing requirements for the funds for
establishing new enterprises, undertaking expansion/modernization/diversification of the
existing enterprises.
Investment banks have been procuring impressive support from capital market for the
corporate sector for financing their projects.
In view of multitude of enactments, rules and regulations, guidelines and offshoot press
release instructions brought out by the Government from time to time imposing statutory
obligations upon the corporate sector to comply with all those requirements prescribed
therein, the need of skilled agency existed which could provide counseling.
Investment bankers advise the investors of the incentives available in the form of tax reliefs,
other statutory relaxations, good return on investment and capital appreciation in such
investment to motivate them to invest their savings in securities.
Thus, the investment bankers help industry and trade to raise funds, and the investors to
invest their saved money in sound and healthy concerns with confidence, safety and
organizations for higher yields.
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34
REGULATORY FRAMEWORK FOR INVESTMENT
BANKING IN INDIA
Investment Banking in India is regulating in its various facets under separate legislations or
guidelines issued under statute. The Regulatory powers are also distributed between different
regulators depending upon the constitution and status of Investment Bank. Pure investment
banks which do not have presence in the lending or banking business are governed primarily
by the capital market regulator (SEBI). However, Universal banks and NBFC investment
banks are regulated primarily by the RBI in their core business of banking or lending and so
far as the investment banking segment is concerned, they are also regulated by SEBI. An
overview of the regulatory framework is furnished below:
At the constitutional level, all invest banking companies incorporated under the Companies
Act, 1956 are governed by the provisions of that Act.
Investment Banks that are incorporated under a separate statute such as the SBI or IDBI are
regulated by their respective statute. IDBI is in the process of being converted into a
company under the Companies Act.
Universal Banks that are regulated by the Reserve Bank of India under the RBI Act, 1934
and the Banking Regulation Act which put restrictions on the investment banking exposures
to be taken by banks.
Investment banking companies that are constituted as non-banking financial companies are
regulated operationally by the RBI under sections 45H to 45QB of Reserve Bank of India
Act, 1934. Under these sections RBI is empowered to issue directions in the areas of
resources mobilization, accounts and administrative controls.
Functionally, different aspects of investment banking are regulated under the Securities and
Exchange Board of India Act, 1992 and guidelines and regulations issued there under.
Investment Banks that are set up in India with foreign direct investment either as joint
ventures with Indian partners or as fully owned subsidiaries of the foreign entities are
governed in respect of the foreign investment by the Foreign Exchange Management Act,
1999 and the Foreign Exchange Management (Transfer or issue of Security by a person
Resident outside India) Regulations, 2000 issued there under as amended from time to time
through circulars issued by the RBI.
Apart from the above specific regulations relating to investment banking, investment banks
are also governed by other laws applicable to all other businesses such as – tax law, contract
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law, property law, local state laws, arbitration law and the other general laws that are
applicable in India.
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ROLE OF INVESTMENT BANKERS
The role of investment banker is dynamic in the wake of diverse nature of Investment
banking services. Investment banker’s dynamism lies in promptly attending to the corporate
problems and suggests ways and means to solve it. The nature of Investment banking
services is development oriented and promotional to help the industry and trade to grow and
survive. Investment banker is, therefore, dedicated to achieve this objective through his
dynamism. He is always awake to renew his skills, develop expertise in new areas so as to
equip himself with the knowledge and techniques to deal with emerging new problems of
corporate business world. He has to keep pace with the changing environment where
Government rules, regulations and policies affecting business conditions frequently change;
where science and technology create new innovations in production processes of industries
envisaging immediate renovations, diversification, modernizations or replacements of
existing plant and machinery or other equipments putting new demands for finances and
necessitating overhauling of the capital structure of the firms.
Investment banker has to think and devise new instruments of financing industrial projects.
He has to assume wider responsibilities of saving industrial units from going sick and
guiding industries to be set up industrially backward areas to eliminate regional imbalances
in industrial development of the country. He has to guide the wider section of the
community possessing surplus money to invest in corporate securities and other productive
investment channels. He has to help the industry in different forms to ensure that it runs risk
free and devoid of uncertainty by assisting the has to watch the interest and win over the
confidence of the Government, its agencies, along with the entrepreneurs, the investors and
the whole community. He must bridge the communication gap between different sections
and resolve the problem being faced in different areas concerned with the business world.
To discharge the above role, a investment banker has t be dynamic. For this reason, a
investment banker is sometimes, called M.B i.e. Moving Bottom, i.e., one who never sits at
one place, always moving- attending meetings and meeting clients and constituents, doing
business and getting business by attending meetings and conferences, imparting knowledge
to others and acquiring new knowledge to maintain his supremacy in possession of latest
information. His role depicts a personality cult, which is unique and envious to be followed
by others.
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In the days ahead, investment bankers have very significant role to play tuning their
activities to the requirements of the growth pattern of corporate sector, the industry and the
economy as a whole, which is, in it, a challenging task and to meet these challenges
investment bankers will have to be more vigorous and strategic in playing their role. They
will have also to adopt new ways and means in discharging their role.
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QUALITIES OF GOOD INVESTMENT BANKERS
Investment bankers are individual experts who organize and manage the investment banks.
The operations of investment banks are, therefore, influenced by the personality trait of these
individuals. For the success of investment bank’s operations, the qualities which investment
bankers should have are discussed below:-
LEADERSHIP:–
Investment banker should possess all relevant skills, update knowledge to interact with the
clients and effectively communicate. Leadership is synonymous with followers who follow
the one who leads.
AGGRESSIVE ACTION:-
Aggressiveness is a personality trait of a good leader but in Investment banking it has a
wider connotation. Aggressive investment bankers are always looking for new business.
Once a business opportunity has been located, the investment banker has got to obtain the
mandate for the Investment banking assignment from the clients at once which will depend
upon his own communication skills, persuasiveness and the background of the organization
to which he belongs. A good investment banker is one who does not allow his client to think
anything outside except what has been advised.
CONTACTS :–
Success of investment banker depends upon his sociable nature and the richness of wider
contacts. A investment banker is supposed to be acquainted deeply with all the constituents
of investment banking. The scope of contact encompasses intimate contiguity and
acquaintances within his own organization, Central and State Government Offices where
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compliances under various relevant enactments are to be reported, Indian and foreign banks,
financial institutions at Central and State levels, promoters/directors/owners and chief
executives of the private and public enterprises which would be prospective beneficiaries of
Investment banking services, printers, advertising agencies, brokers and stock exchange
dealers, advocates and solicitors and members of the press whose services are availed of in
executing Investment banking assignments. Investment bankers should widen contacts and
references and continue to maintain them with goodness, honour and humour by meeting
people.
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RESPONSIBILITIES OF INVESTMENT BANKER
To the Investors
Investor protection is fundamental to a healthy growth of the Capital Market. Protection is
not to be conceived as that of compensating for the losses suffered. The responsibility of the
Investment Banker in ensuring the completeness of the disclosures is of paramount
importance in view of the fact that entire reliance is based on offer Document either
Prospectus or Letter of Offer because an independent agency like a Investment Banker has
done the scrutiny.
Capital structuring
The Investment bankers while designing the capital structure take into account the various
factors such as Leverage effect on earnings per share, the project cost and the gestation
period, cash flow ability of the company, the cost of capital, the considerations of
management control, size of the company, and general economic factors. These exercise are
done mainly in order to meet the fund requirement of the company taking due cognizance of
the investor’s preference.
Legal aspect
The factors that are looked into in case of the legal aspects are:
Compliance with the SEBI guidelines and the various guidelines issued by the Ministry
of Finance and Department of Company Affairs.
Pending litigation’s towards tax liabilities or any criminal/civil prosecution any of the
directors for any offenses.
Fair and adequate disclosures in the prospectus.
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The Investment Banker looks into the various factors while pricing the issue. Some of the
factors are past financial performance of the company, Book value per share, stock market
performance of the shares. The Investment Banker has a vital role to play in pricing of the
instrument.
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COMMERCIAL BANKS & INVESTMENT BANKS
COMPARISON
There are differences in approach, attitude, and areas of operations between commercial
banks and investment banks. The differences between investment banks and commercial
banks are summarized below:
COMMERCIAL BANKS INVESTMENT BANKS
Basically deal in debt related finance and their Basically they deal with
activities are appropriately arrayed around credit mainly funds raised through money market and
proposals, credit appraisal and loan sanctions. capital market and the area of activity is ‘equity
and equity related finance’.
Are asset oriented and their lending decisions are Are management oriented.
based on detailed credit analysis of loan They generally are willing to accept risks of
proposals and the value of security offered business.
against loans. They generally avoid risks.
They are merely financiers.
There activities include project
counseling, corporate counseling in areas of
capital restructuring, amalgamations, mergers,
takeovers etc., discounting and rediscounting of
short term paper in money markets, managing,
underwriting and supporting public issues and
new issue market and acting as brokers and
advisers on portfolio management in stock
exchange. This activities have impact on growth,
stability and liquidity of money markets.
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GROWTH OF INVESTMENT BANKING IN INDIA
Formal Investment banking activity in India was originated in 1969 with Investment banking
Division set up by the Grindlays Bank, the largest foreign bank in the country. The main
service offered at that time to the corporate enterprises by the investment banks included the
management of public issues and some aspects of financial consultancy. Other foreign banks
like Citi Bank, 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 these
Indian investment bankers emerged as leaders in Investment banking having done significant
business during the period of 1974-1987 in comparison to foreign banks. The early and mid-
seventies witnessed a boom in the growth of Investment banking organizations in the country
with various commercial banks, financial institutions, broker’s firms entering in to the field
of investment banking.
The early growth of Investment banking in the country is assigned to the Foreign Exchange
Regulation Act, 1973 (FERA) where under large number of foreign companies operating in
India were required to dilute their foreign holdings in order to continue business in the
country. This had caused two-pronged effect viz. firstly, in the form of spate in ‘Foreign
Exchange Regulation Act Issues’ eliciting interest of the investors by creating massive
awareness about capital markets amongst the new class of investing public, secondly,
Investment banking activity became attractive to banks and the firms of consultants and
share brokers who entered into this fields vigorously to reap the advantages of the expanding
capital markets.
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45
INVESTMENT BANKING: INTERNATIONAL
SCENARIO
The Investment banking scenario in developed countries like USA and UK are different from
Indian Investment banking activities. The Investment banker is also called as Investment
Bankers. A brief outline of Investment banking in USA and UK has shown in the following
paragraphs.
Investment Banks in UK
In United Kingdom, Investment Banks came on the scene in the late eighteenth century and
early nineteenth century. Industrial revolution made England into a powerful trading nation.
Rich investment houses that made their fortunes in a colonial trade diversified into banking.
Their principle activity started with the acceptance of commercial bills pertaining to
domestic as well as international trade. The acceptance of the trade bills and their
discounting gave rise to acceptance houses, discount houses, and issue houses. Investment
bankers initially included acceptance houses, discount houses and issue houses. A
Investment Banker was primarily a investment rather than his customers entrusted banker
but him with funds.
They also used to finance sovereign government through grant of long-term loans. Since the
end of Second World War commercial banks in Western Europe have been offering multiple
services including Investment banking services to their individual and corporate clients.
British banks set-up division or subsidiaries to offer their customers Investment banking
services.
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The increased regulation and control of domestic operations gave a fillip to large US banks
to undertake Investment banking functions in international capital markets. The US
investments Banks have extended their operations to the international level. They are largely
responsible for the development of the Euro-dollar market in the securities and globalisation
of capital markets. They have a prominent presence in London and other European financial
centers. Investment Banks have today a strong parent, a strong balance sheet and a strong
international network to play a global role.
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PLAYERS IN INVESTMENT BANKING
ENAM
ENAM was founded in1984 to provide knowledge-driven financial services at the time when
Indian economy investors faced a bewildering array of options. ENAM is the one of the
largest underwriters in India. ENAM offers promising & exciting companies the opportunity
of assessing the public market equity finances. ENAM’s long-term association with capital
markets & primary markets has provided it with deep insights of the functioning of Indian
financial institutions.
ICICI SECURITIES
ICICI Securities Limited is a leader across the spectrum of Investment Banking. We are
experienced in every aspect of the business from domestic and international capital markets
advisory, to M&A advisory, Private Equity syndication, Restructuring and infrastructure
advisory. Our investment banking team, based across key cities in India and New York,
London, and Singapore consists of professionals with expertise across a range of industries.
ICICI SECURITIES provide following services:
Mergers and Acquisitions: - ICICI Securities Limited is amongst the first Indian
investment Banks to form a dedicated M&A practice and continues to be a leader by
providing innovative and unique solutions to achieve varied objectives of the client. They
offer a full range of advisory services, which include joint ventures, mergers, acquisitions,
and divestitures.
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Equity Capital Markets: - ICICI Securities Limited is at the forefront of capital markets
advisory having been involved in most major book building and fixed price offerings over
the last decade. It is amongst the leading underwriters of Indian equity and equity-linked
offerings.
Structured Finance (Project Finance & Advisory Business): -KMCC has developed
expertise in various vertical segments in the infrastructure sector including power, oil, gas,
ports, automobiles, steel & metals and hotels, by offering structured finance solutions. Some
of the transactions executed by this team include:
Advisor to Ford on financial closure for its Car project in India.
Advisor to one of the largest LNG projects on the Western coast of India.
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Financial advisors and loan syndications to British Gas and GAIL.
Mergers & Acquisitions: -In the area of Mergers & Acquisitions, we provide our
clients expertise and a comprehensive set of services that help them achieve their strategic
and financial objectives. Our spectrum of services include:
Divestments
Spin-Offs / Restructuring & Joint Ventures / Strategic Alliances
CITIGROUP
Citigroup Corporate and Investment Banking achieve the extraordinary for our clients
around the world. No financial institution is more committed to advancing the goals of its
clients—our diverse and talented staff in more than 100 countries advises companies,
governments and institutions on the best ways to realize their strategic objectives. We create
solutions for and provide the broadest possible capital and market access to thousands of
issuer and investor clients. And no institution better executes the increasingly complex
payment and cash management solutions required in today's global economy. The features
Citigroup are as follows: -
Over the years, Citigroup has established a track record of outstanding business
milestones such as Cash Management, pioneered by Citigroup in 1986 and utilized by over
900 Corporates with through-puts totaling around $ 35 billion (8% of India's GDP).
It is India's largest foreign bank in the FX (foreign exchange) market with a 14 per cent
market share.
As the leading custodian, Citibank has over $22 billion of custody assets under
management.
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for the last four consecutive years. This Transaction heralds DSPML as a key player in the
private equity market. The service features of DSPML are as follows: -
DSPML has consistently been rated as one of India's leaders in origination, distribution,
and trading of equity and debt securities.
DSPML has consistently brought reputable issues to the capital markets.
A diverse client base made up of India's most prestigious private and public sector
corporations and multinational corporations have rendered DSPML a commanding presence
in the Indian capital market.
Through direct market's group, DSPML offers investors access to every major initial or
subsequent public offering.
DSP Merrill Lynch is the leading underwriter of Indian equity and equity-linked offerings
across domestic and international markets. By leveraging their extensive knowledge of local
markets and global resources, they have delivered innovative and customized solutions to
their clients.
In order to meet the challenges of liberalized policy of the Government & Changed
economic Scenario, UPFC has started Investment banking & other financial Services to
serve its valued clients. UPFC, a category-I Investment Banker with unmatched expertise in
project appraisal and term lending offers a whole gamut of Investment banking Services.
1. Issue management: UPFC provides expert services to manage public issues of the
companies successfully; it has already managed Public Issues as a lead Manager with great
success.
2. Underwriting: In order to provide a protective umbrella to the public issues of its
clients, UPFC also underwrites the issue.
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3. Subscription to equity share: UPFC subscribes to the equity shares reserved under FI
quota, to enable the company to market the public issue effectively.
4. Advisory services: UPFC, with its long experience, advises its clients for various
advisory services such as capital Structuring, loan syndication etc.
5. Project certification: UPFC also certifies the projects going to capital markets for
raising funds. This is a specialized activity of the Corporation.
JM Morgan Stanley
Investment Banking focuses on capital raising, mergers, acquisitions, restructuring and
financial advisory and private equity for Indian corporates in the international and domestic
capital markets. Through innovation and value-added services, the firm has contributed
immensely to the overall development of the capital market and mergers and acquisitions in
India. It have the Investment banking and underwriting licenses from the Indian securities
market regulator, the Securities and Exchange Board of India. Some of the recent
transactions of JM Morgan Stanley
US$ 20MM fund raising for Nipuna Services (a BPO subsidiary of Satyam Computer
Services)
Rs. 3,219 MM preferential allotment of equity shares/ warrants in Bajaj Auto Finance
Limited to financial investors and the promoter, Bajaj Auto Limited.
JM Morgan Stanley has a dedicated group that regularly interacts with over
40 financial investors in India as well as overseas.
JM Morgan Stanley offers research-based investment advisory and equity
broking services to corporates, high net-worth individuals and retail investors across a wide
range of financial products.
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They are known for lead managing some of the most complex and innovative
and large equity and debt offerings in India and abroad by the Indian issuers. A robust deal-
flow across sectors has allowed them to build significant traction with the financial investors.
This helps in raising private equity capital for the companies.
The various studies which had been undertaken in India for evaluating the performance of
Investment banking firms and the implications of these on securities industry. No single
study has been emerged so far pertaining to the evaluation of Investment banking firms and
in-depth study on their activities as well as operational and financial performance in the light
of changing regulatory environment.
In recent past, the small investor has turned his back on the primary capital market. Issue
after issue as failed to capture his imagination, rekindle his enthusiasm, and reinforce his
faith. He has lost all hopes of appreciation of his investment. And this when all these years
millions have though capital market, ate capital market and dreamt capital market. It needed
an extraordinary effort and skill the drive the small investor away! High premiums, false
premiums and gray market operations. The professed protector of his interests first laid
down the dictum of proportionate allotment, then of minimum subscription, all working
against his interests. This would make an observant student of the stock market infer that
there is some game plan afoot to dethrone the small investor from his prominent; he was
believed to be the king.
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With the coming to SEBI, an organisation that was ostensibly brought into existence to guard
the interest of the small investor, hopes ran high that the small investor would now have a
safe playing field. But these hopes were soon belied. Far from guarding the interests of the
investing public, SEBI embarked on a course of action, which has positively hurt them. The
latest fiat of EBI bans corporate advertising after the receipt of acknowledgement card by a
company wanting to go public. SEBI’s this action has caused the closure of an information
window. Now 50 million potential investors are deprived of official and authentic
information given by the Issuer. It is hard to understand reasons for this drastic and totally
uncalled for action. While there has been no official explanation for this fiat, there is reason
to believe that it may be based on a wrong perception of the role for corporate advertising.
All this has been done perhaps because the corporate and intermediaries is to follow the
practices of Western capital markets here, oblivious of the fact that our capital markets are
altogether different in structure, in systems and in the number of participants. Freedom of
commercial expression could be exploited by some to serve their own ends, just a s freedom
of speech and expression could be abused but this has not led our Government to put
arbitrary restrictions on our freedom.
Investment bankers have reason to believe they will be handicapped without the marketing
support. But the worst sufferer would be the investor, especially the small investor it is this
class, which forms the backbone of the capital market. As a result of the ban, the small
investor would be deprived of the opportunity to study the corporate profile of the Issuer. In
the absence of adequate information, they will have to depend on manipulated facts and
information fed by unreliable sources.
Besides, there are larger issuers arising out of SEBI’s action. From the point of view of
liberalisation of the economy, SEBI has taken a retrograde step. A market economy
flourished through bigger markets, higher sales and lesser profits. To achieve this
performance, a company needs an aggressive marketing plan and advertising effort is the
main thrust to such a plan. No marketing plan can be worthwhile unless it is backed by an
effective advertising plan. The ban imposed by SEBI nips the marketing plan in the bud.
The Indian primary capital market is basically a retail market. It consists of innumerable
investors who take own individual investment decisions. Whatever, the system, it is this
market that will bring in the funds. If these markets destabilised, the investors will look for
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alternative avenues to invest their funds. SEBI in its one of the first documents on “SEBI
and Investor Protection, Development and Regulation of Securities Market” clearly specifies
significance of regulating capital market and its future plans for fulfilling the twin objectives
viz., Development of capital market and investor protection are explained in introductory
paragraphs. It speak out that, “The decade of the 1980 witnessed a phenomenal growth and
development of the securities market, demonstrated its potential not only to mobilize the
savings of the horseshold sector but also to allocate it with some degree of efficiency for
industrial development. The dilution of the holdings of the multinational companies at
affordable prices in the latter part of the 1970s had generated considerable interest, which
was, carries well into the next decade. Several companies’ came in the early part of the
1980s and successfully raised large resources from the market especially through debt
instruments, which further sustained investor interest. There were several changes in
Government policy, which significantly influenced industry and aided the market. India was
then entering the phase of liberalization and decontrol which was to accelerate and gather
momentum in the 1980s.
By the end of the decade, the securities market in India came to be firmly integrated with the
financial system of the country. With the corporate sector increasingly relying on the
securities market for meeting their long-term requirement of funds, the securities market
their long-term requirement of funds; the securities market competed on equal terms with the
Development Financial Institutions, which were the traditional purveyors of long-term
capital. The emergence of the securities markets into the main stream of the financial system
of the country was thus one of the major economic processes of the 1980s – an inevitable
outcome of the maturing process of the financial system. They brought about notable
changes in the capital structure of the companies across industries, gave birth to new
intermediaries and institutions in the securities market and created a new awareness and
interest in investment opportunities in the securities market among investor. In spite market,
its quality lagged far behind and there was absence of adequate professionalism and fair
competition among the various players in the market. Besides, the regulatory framework
then prevailing was fragmented difficult, if not effective.
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CONCLUSION
The investment banker plays a vital role in channelizing the financial surplus of the society
into productive investment avenues. Hence before selecting a investment banker, one must
decide what are the services for which he is being approached. Selecting the right
intermediary who has the necessary skills to meet the requirements of the client will ensure
success.
It can be said that this project helped me to understand every details about Investment
banking and in future how it`s going to get emerged in the Indian economy. Hence,
Investment banking can be considered as essential financial body in Indian financial system.
Market development is predicated on a sound, fair and transparent regulatory framework. To
sustain the growth of the market and crystallize the growing awareness and interest into a
committed, discerning and growing awareness and interest into an essential to remove the
trading malpractice and structural inadequacies prevailing in the market, and provide the
investors an organized, well regulated market place in future.
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BIBLIOGRAPHY
WEBSITES
www.ibef.org/industry
www.civilserviceindia.com
www.livemint.com
www.wikipedia.com
www.icsi.edu
www.researchgate.net
www.mergersandinquisitions.com/investment-banking-india
www.imarticus.org
www.corporatefinanceinstitute.com
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