EVOLUTION & GROWTH OF INVESTMENT BANKING IN INDIA

Presented By:Presented To:Chakshu Goel Naveen keswani Rahul Goel Ranjit singh Vipul mittal

DEFINITION OF INVESTMENT BANKING

An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities.

HISTORY
By the middle of 1800s, professional investment banks had sprung up in the US to help government raise funds for infrastructure projects and the civil war. European Investment banks (excluding UK) stuck with the universal banking concept and they remained active primarily in their local markets through the 1900s. The Glass-Steagall Act, passed on June 16, 1933, and officially named the Banking Act of 1933, introduced the separation of bank types according to their business (commercial and investment banking), Gram leach Act 1999.

SOME INVESTMENT BANKING FIRMS

1. GOLDMAN SACHS & CO. 2. THE BLACKSTONE GROUP 3 . M O R G A N S TA N L E Y 4 5. JPMORGAN INVESTMENT BANK 6 . M E R I L L LY N C H 7. CITI MARKETS & BANKING 8. LAZARD 9. CREDIT SUISSE INVESTMENT BANKING DIVISION 10. UBS INVESTMENT BANK

TYPES OF INVESTMENT BANK

 BASIC INVESTMENT BANK:-ISSUES STOCKS AND BONDS TO THE C LI ENTS FOR A PRE- SPEC IFIED A M OUNT. THE BA NK THEN I N V E ST S T H E M O N E Y T H AT T H E C L I E N T U S E D TO P U RC H A S E T H E STOCKS AND BONDS. THESE INVESTMENTS DIFFER AMONG BANKS. IN COUNTRIES WHERE IT IS ALLOWED TO DO SO, INVESTMENT BANKS HAVE THEIR NETWORKS OF FINANCIAL AND LENDI NG I NSTI TUTIONS F ROM WHI C H THEY PROF I T. OTHERS ALSO INVEST IN PROPERT Y DEVELOPMENT AND CONSTRUCTION. THE CLIENT WITH THE STOCKS AND BONDS WOULD THEN RECEIVE PAYMENTS FROM THE PROFITS MADE ON HIS MONEY O N A S P E C I F I ED P E R I O D O F T I M E . I T C A N B E J U ST I F IE D T H AT BOTH THE CLIENT AND THE INVESTMENT BANK PROFITED FROM T H E C L I E N T ' S I N I T I A L I N V E S T M E N T. B E C AU S E T H E S E B A N K S KNOW THE INS AND OUTS OF THEIR TRADE, IT IS NOT UNUSUAL T H AT S M A L L O R L A RG E B U S I N E S S V E N T U R E S A N D C O R P O R AT I O N S S E E K T H E I R H E L P O N M AT T E R S R E G A R D I N G M E RG E R S , AC Q U I S IT IO NS, A N D OT H E R C O R P O R AT E AC T I V ITIE S

B A N K S A R E I N V O LV E D I N T R A D E F I N A NCING A N D P ROV I DI NG C A P I TA L TO B U S I N E S S VENTURES NOT IN TERMS OF LOANS BUT OF SHARES. BECAUSE THESE INVESTMENT BANKS ARE BASED ON

MERCHANT BANK:-THESE

INVESTMENT BANKING IN INDIA

 EVOLUTION
 TOP 10 INVESTMENT BANK IN INDIA
         

J P MORGAN USB AG GOLDMAN SACH DEUTSCHE BANK HSBC M O R G A N S TA N LY ICICI SECURITIES KOTA K M A H I N D R A S B I C A P I TA L M A R K E T S A M B L T C O P O R AT I O N F I N A N C E

ROLE OF INVESTMENT BANK

Investment banks is to advise companies in raising money or funds. An investment banking firm also does a large amount of consulting and Provide advice on mergers, acquisitions, and other financial transactions. Research and develop opinions on securities, markets, and economies

CONT
Professionals advising and supporting organizations on several levels:  Strategy  Operations  Finance Issue, buy, sell, and trade stocks and bonds Manage investment portfolios of companies as well as of individuals

COMMERCIAL BANK
accepts deposits, makes business loans, and offers related services. allow for a variety of deposit accounts, such as checking, savings, and time deposit. they are primarily concerned with receiving deposits and lending to businesses.

INVESTMENT BANK
acts as an underwriter or agent for corporations issuing securities. maintain broker/dealer operations, maintain markets for previously issued securities, and offer advisory services to investors. facilitating mergers and acquisitions, private equity placements and corporate restructuring. do not accept deposits from and provide loans to individuals.

 All the Investment Banking companies in India are incorporated under Companies Act.  Investment banks like SBI that are incorporated under separate statue are regulated by their respective statue.  Universal Banks and NBFC are regulated by RBI  Foreign Banks are regulated by FEMA and FEMR.  Apart from above regulations Investment banks are also governed by other laws applicable to other banks

Global Slow down of 2008, had put a question mark on the future of Investment banking in countries like U.S. but India had learned a lot from this. The future of Investment banking in India is good but strict guidelines are being put forward by Regulatory authorities in order to ensure smooth functioning of investment banking in India. These Guidelines will ensure -:  Ensure Better Risk Management  Help protect against fraud and unethical business investment companies.  It will ensures restoration of Profits.