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SR.

NO

TOPIC

PAEGE NO

DEFINITIONS

MEANING

INTRODUCTION

HISTORY

INVESTMENT BANKING

SALES AND TRADING

RESEARCH

RIKS MANAGEMENT

FEATURE OF INVESTMENT BANK

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FACTOR OF INVESTMENT BANK

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QAULIFICATION OF INVESTMENT
BANK

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TOP 6 INVESTMENT BANK IN INDIA

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ORGANIZATION STRUCTURE
INVESTMENT BANING

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FINANCIAL CRSISIS 2007-2008

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BANKING DOWN INVESTMENT


BANK

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OFFERING &SERVICES OF
INVESTMENT BANKING

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INITIAL PUBLIC OFFERING

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CONCLUSION

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BIBLOGRAHY

OF

CHAPTER 1
INVESTMENT BANKIN
1.1 INTRODUCTION
Corporate finance is the traditional aspect of investment banks, which involves helping
customers raise funds in capital markets and giving advice on mergers and acquisitions (M&A);
this may involve subscribing investors to a security issuance, coordinating with bidders, or
negotiating with a merger target. A pitch book of financial information is generated to market the
bank to a potential M&A client; if the pitch is successful, the bank arranges the deal for the
client. The investment banking division (IBD) is generally divided into industry coverage and
product coverage groups. Industry coverage groups focus on a specific industrysuch as
healthcare, public finance (governments), FIG (financial institutions group), industrials, TMT
(technology, media, and telecommunication), P&E (power & energy), consumer/retail, food &
beverage, corporate defense and governanceand maintain relationships with corporations
within the industry to bring in business for the bank. Product coverage groups focus on financial
productssuch as mergers and acquisitions, leveraged finance, public finance, asset finance and
leasing, structured finance, restructuring, equity, and high-grade debtand generally work and
collaborate with industry groups on the more intricate and specialized needs of a client
An investment banker is an individual who works in a financial institution that is in the business
primarily of raising capital for companies, governments and other entities, or who works in a
large bank's division that is involved with these activities, often called an investment bank.
Investment bankers may also provide other services to their clients such as mergers and
acquisition advice, or advice on specific transactions, such as a spin-off or reorganization. In
smaller organizations that do not have a specific investment banking arm, corporate finance staff
may fulfill the duties of investment banker Major investment banks include Barclays, Boca
Merrill Lynch, Warburg, Goldman Sachs, Deutsche Bank, JP Morgan, Morgan Stanley, Salomon
Brothers, UBS, Credit Suisse, Citibank and Lazard. Some investment banks specialize in
particular industry sectors. Many investment banks also have retail operations that serve small,
individual customers.

1.2 HISTROY
Investment banking has changed over the years, beginning as a partnership form focused on
underwriting security issuance, i.e. initial public offerings (IPOs) and secondary market
offerings, brokerage, and mergers and acquisitions, and evolving into a "full-service" range
including securities research, proprietary trading, and investment management. In the modern
21st century, the SEC filings of the major independent investment banks such as Goldman
Sachs and Morgan Stanley reflect three product segments: (1) investment banking (fees for
M&A advisory services and securities underwriting); (2) asset management (fees for sponsored
investment funds), and (3) trading and principal investments (broker-dealer activities including
proprietary trading ("dealer" transactions) and brokerage trading ("broker" transactions)).In the
United States, commercial banking and investment banking were separated by the GlassSteagall
Act, which was repeal Philadelphia financier Jay Cooke established the first modern
American investment bank during the Civil War era. However, private banks had been providing
investment banking functions since the beginning of the 19th century and many of these evolved
into investment banks in the post-bellum era. However, the evolution of firms into investment
banks did not follow a single trajectory. For example, some currency brokers such as Prime,
Ward and King and John E. d in 1999. The repeal led to more "universal banks" offering an even
greater range of services.
Notable large banks with significant investment banks include JP Morgan Chase , Bank of
America, Credit Suisse, Deutsche Bank, UBS, Barclays, and Wells Fargo. After the financial
crisis of 200708 and the subsequent passage of the Dodd-Frank Act of 2010, regulations have
limited certain investment banking operations, notably with the Volcker Rule's restrictions on
proprietary trading. The traditional service of underwriting security issues has declined as a
percentage of revenue. As far back as 1960, 70% of Merrill Lynch's revenue was derived from
transaction commissions while "traditional investment banking" services accounted for 5%.
However, Merrill Lynch was a relatively "retail-focused" firm with a large brokerage network.

Philadelphia financier Jay Cooke established the first modern American investment bank during
the Civil War era. However, private banks had been providing investment banking functions
since the beginning of the 19th century and many of these evolved into investment banks
Philadelphia financier Jay Cooke established the first modern American investment bank during
the Civil War era. However, private banks had been providing investment banking functions
since the beginning of the 19th century and many of these evolved into investment banks in the
post-bellum era.[1] However, the evolution of firms into investment banks did not follow a single
trajectory. For example, some currency brokers such as Prime, Ward and King and John E.
Thayer and Brother moved from foreign exchange operations to become private banks, taking on
some investment bank functions. Other investment banks evolved from mercantile firms such as
Thomas Biddle and Co. and Alexander Brothers.
In 1933 the new deal separated investment from commercial banking through the Glass-Seagull
Act. That law was no longer in effect in the late 1990s, opening the way for the power of
investment banking to accelerate. Its growth was a response to new demands for investment
services, technological changes, deregulation, and globalization. Investment banks were at the
heart of the shadow banking system. Investment banking played a major role in the outbreak of
the global financial crisis of 2007-9. In the aftermath, leading American investment banks were
converted into bank holding companies, and brought under new regulation

1.3 DEFINITION:
Investment banking is a special segment of banking operation that helps individuals or
organizations

raise

capital

and

provide

financial

consultancy

services

to

them.

They act as intermediaries between security issuers and investors and help new firms to go
public. They either buy all the available shares at a price estimated by their experts and resell
them to public or sell shares on behalf of the issuer and take commission on each share.
Description:
Investment banking is among the most complex financial mechanisms in the world. They serve
many different purposes and business entities. They provide various types of financial services,
such as proprietary trading or trading securities for their own accounts, mergers and acquisitions
advisory which involves helping organizations in M&As,; leveraged finance that involves
lending money to firms to purchase assets and settle acquisitions, restructuring that involves
improving structures of companies to make a business more efficient and help it make maximum
profit, and new issues or IPOs, where these banks help new firms go public.

1.3 MEANING
Investment banks mediate between companies that issue securities and the individuals or entities
wishing to purchase them. In this respect, investment banks operate along two main lines: a
"buy" side and a "sell" side. "Buy" side operations include services such as securities trading
and portfolio management. "Sell" side activities include underwriting new lines of marketing
financial products, and publishing financial research.
To illustrate an investment bank's buy side role in securities trading, suppose an investor wants
to purchase 100 shares of company XYZ. They can solicit the services of an investment bank,
where a stock broker can place an order and deliver these shares.
To illustrate an investment bank's sell side role as an underwriter, suppose company XYZ
plans to issue new shares of stock in an initial public offering(IPO) XYZ can solicit an
investment bank to underwrite the shares, market and sell them to their clients.
Regulation becomes a key issue for investment banks, because they operate on both (and often
competing) sides of the same coin. Consequently, there is significant room for conflicts of
interest between the buying and selling operations. Agencies such as the SEC provide strict
guidelines to help ensure that operations on the "buy" and "sell" sides do not intersect and result
in unfair market practices or ethics violations.
The two main lines of business in investment banking are called the sell side and the buy side.
The "sell side" involves trading securities for cash or for other securities (e.g. facilitating
transactions, market-making), or the promotion of securities (e.g. underwriting, research, etc.).
The "buy side" involves the provision of advice to institutions that buy investment
services. Private equity funds, mutual funds, life insurance companies, unit trusts, and hedge
funds are the most common types of buy-side entities.

An investment bank can also be split into private and public functions with a Chinese
wall separating the two to prevent information from crossing. The private areas of the bank deal
with private insider information that may not be publicly disclosed, while the public areas, such
as stock analysis, deal with public information.An advisor who provides investment banking.

CHAPTER 2
INVESTMENT BANK
2.1 INTRODUCTION
An investment bank is typically a private company that provides various financial-related and
other services to individuals, corporations, and governments such as raising financial
capital by underwriting or acting as the client's agent in the issuance of securities. An investment
bank may also assist companies involved in mergers and acquisitions (M&A) and provide
ancillary services such as market making, trading of derivatives and equity securities, and FICC
services (fixed income instruments, currencies, and commodities).
Unlike commercial banks and retail banks, investment banks do not take deposits. From the
passage of GlassSteagall Act in 1933 until its repeal in 1999 by the GrammLeachBliley Act,
the United States maintained a separation between investment banking and commercial banks.
Other industrialized countries, including G7 countries, have historically not maintained such a
separation. As part of the DoddFrank Wall Street Reform and Consumer Protection Act of 2010
(Dodd-Frank Act of 2010), the Volcker Rule asserts some institutional separations of investment
banking services from commercial banking
We are a market-leading client services and transaction processing organization that delivers
solutions across Deutsche Bank including the movement of trillions of Euros across the Banks
financial platforms every day. Our dynamic and diverse division seeks to grow profitability
through efficient trade and services processing. We provide clients with industry-leading services
while minimizing operational and reputational risk.
This five-day introduction offers the perfect way to gain a first-hand look into what life in an
investment bank is really like. Youll learn how we operate and gain a valuable insight into a key

part of our global business. During your time with us, youll take part in a number of different
sessions, meet senior stakeholders, and gain unique exposure to a career in global banking
operations. Well give you experience that will help you understand the needs of our clients
around the world and the skills you need to succeed. Your week will include both classroom and
on-the-job training, including shadowing senior stakeholders, attending presentations, and taking
part in valuable networking sessions.
The great starting point for anyone thinking about a career in investment banking, but we also
hope its the beginning of a fruitful relationship. Well keep in contact with you over the months
ahead, and provide the support you need to move your career in the right direction. In return,
when you return to your campus, we invite you to take on the role of a Deutsche Bank
Ambassador and help us promote our work and the many graduate opportunities available.
1.Systemic Risks
These are largely dependent on the structure and processes of a Capital Market system and the
country, which it is associated with. Due to economic fluctuations such as recession and the
recent global economic crisis, the structure of the global Capital Markets has been strengthened
by increasing the authority of regulatory authorities, setting up new authorities and on having
Central Counter Parties (CCP) responsible for execution of Trade or Trade Guarantee.
CCP mitigates counter-party risk, which means it mitigates potential default of either of the
parties involved in a transaction or trade. The Sub-Prime Crisis of 2008 has triggered new
statutory provisions introduced by Dodd-Frank Wall Street Reform and Consumer Protection Act
(also known as Dodd-Frank Act), specifying a mandate on record keeping and reporting of credit
swaps.
2. Efficiency
Efficiency is the ability of the system to process Trades, irrespective of their volume, at the
earliest and within the stipulated time without errors.
3. Reliable Systems

Reliable systems need to be available and operational all the time irrespective of risks from
internal failures and external events..

4. Technology Influence
Today technology has a great impact on all these influencing factors mentioned above.
Regulatory authorities and CCPs need accurate database and monitoring systems. Efficiency of
the system can be at the best with the use of the right technology. When the right technology is
provided with good back-up (redundancy), a system becomes more reliable. Cost is controlled by
improving efficiency, which is again dependent on technology.

2.2 SALES AND TRADING


On behalf of the bank and its clients, a large investment bank's primary function is buying and
selling products. In market making, traders will buy and sell financial products with the goal of
making money on each trade. Sales is the term for the investment bank's sales force, whose
primary job is to call on institutional and high-net-worth investors to suggest trading ideas (on
a caveat emptor basis) and take orders. Sales desks then communicate their clients' orders to the
appropriate trading rooms, which can price and execute trades, or structure new products that fit
a specific need .Structuring has been a relatively recent activity as derivatives have come into
play, with highly technical and numerate employees working on creating complex structured
products which typically offer much greater margins and returns than underlying cash securities.
In 2010, investment banks came under pressure as a result of selling complex derivatives
contracts to local municipalities in Europe and the US.
Sales and trading is one of the key functions of an investment bank. The term refers to the
various activities relating to the buying and selling of securities or other financial instruments.
In market making, traders will buy and sell financial products primarily to facilitate the
investment and trading activities of its clients with the goal of making an incremental amount of
money on each trade.
sales and trading different from investment banking
There are several ways to compare and contrast the differences between investment banking and
sales and trading. The first is the actual work that they do and the time in which this work is
done. Investment bankers primarily help to raise money for clients through stock or bond
offerings or advise clients on mergers or acquisitions. The endless flow of pitch books
(PowerPoint presentations to clients), the detailed financial modeling and around-the-clock client
schmoozing are all focused on achieving one result: a deal that will generate substantial fee
income for the investment bank. Investment bankers work for months -- even years -- to generate

10

one deal, schmoozing company execs until the company is ready to raise money or acquire a
company. But when the company is ready and hires the bank to help them, the reward for the
bank is substantial.
Salespeople and traders also work on deals -- every trade is a deal -- and also entertain clients.
Compared to investment banking, however, it takes much less time to consummate a transaction
in S&T.
Another big difference between S&T and I-banking is the lifestyle. Sales and trading
professionals are the first-in-and-first-out in the investment bank. To get a jumpstart on the
trading day, salespeople and traders normally take the earliest train into work. But they are the
first ones out of the office, leaving shortly after the markets close. Salespeople and traders also
never work weekends -- trading desks are completely abandoned on the weekends.

11

2.3 RESEARCH
The securities research division reviews companies and writes reports about their prospects,
often with "buy", "hold" or "sell" ratings. Investment banks typically have sell-side
analysts which cover various industries. Their sponsored funds or proprietary trading offices will
also have buy-side research. While the research division may or may not generate revenue (based
on policies at different banks), its resources are used to assist traders in trading, the sales force in
suggesting ideas to customers, and investment bankers by covering their clients. Research also
serves outside clients with investment advice (such as institutional investors and high-net-worth
individuals) in the hopes that these clients will execute suggested trade ideas through the sales
and trading division of the bank, and thereby generate revenue for the firm. Research also covers
credit research, fixed income research, macroeconomic research, and quantitative analysis, all of
which are used internally and externally to advise clients but do not directly affect revenue. All
research groups, nonetheless, provide a key service in terms of advisory and strategy. There is a
potential conflict of interest between the investment bank and its analysis, in that published
analysis can impact the performance of a security (in the secondary markets or an initial public
offering) or influence the relationship between the banker and its corporate clients, thereby
affecting the bank's profits.
Equity Research analysts closely analyze small groups of stocks in order to provide insightful
investment ideas and recommendations to the firms salesforce, traders, and directly to
institutional investors and increasingly to the general investing public. They communicate
formally via research reports that place Buy, Sell, Hold ratings on the companies they cover.
Since Equity Research Analysts generally focus on a small group of stocks (5-15) within
particular industries or geographic regions, they become experts in the specific companies and
industry or coverage universe that they analyze. As such, analysts constantly communicate
with the management teams of their companies under coverage, maintain comprehensive
.financial models about these companies, and quickly digest and respond to new information that

12

hit the tape, communicating new developments and ideas to the investment Banks sales force,
traders, directly to institutional clients, to investment bankers, and to the general investment
public over he phone, directly through to the trading floor through an intercom system and over
the phone.
If you enjoy writing, being on the phone with clients and getting to know management teams,
while at he same time doing a lot of financial modeling and financial analysis, and getting home
at a reasonable hour (9pm vs. 2am) Equity Research might be for you. Research associates (that
would be your title coming in as an undergrad) go through similar training to that of sales &
trading analysts. After 2-3 months of corporate finance, accounting, capital markets.

13

2.4 RISKS MANGEMENT


Risk management involves analyzing the market and credit risk that an investment bank or its
clients take onto their balance sheet during transactions or trades. Credit risk focuses around
capital markets activities, such as syndicated loans, bond issuance, restructuring, and leveraged
finance. Market risk conducts review of sales and trading activities utilizing the Vary model and
provide hedge-fund solutions to portfolio managers. Other risk groups include country risk,
operational risk, and counterparty risks which may or may not exist on a bank to bank basis.
Credit risk solutions are key part of capital market transactions, involving debt structuring, exit
financing, loan amendment, project finance, leveraged buy-outs, and sometimes portfolio
hedging. Front office market risk activities provide service to investors via derivative solutions,
portfolio management, portfolio consulting, and risk advisory. Well-known risk groups in
JPMorgan Chase, Morgan Stanley, Goldman Sachs and Barclays engage in revenue-generating
activities involving debt structuring, restructuring, syndicated loans, and securitization for clients
such as corporates, governments, and hedge funds. J.P. Morgan IB Risk works with investment
banking to execute transactions and advise investors, although its Finance & Operation risk
groups focus on middle office functions involving internal, non-revenue generating, operational
risk controls.
Financial institutions must comply with a growing array of regulations and rules made by
national and international regulators. How banks comply with these regulations could prove to be
a key competitive differentiator at a time when the credit crunch is biting hard. With each
subsequent wave of regulations, many banks simply add another layer of administration and
another compliance project on top of their already complex procedures.
The eke Source enables banks to meet their regulatory obligations with out compromising on the
core needs. With our deep expertise in Risk Management domain we offer the following
solutions:

14

Compliance Management

Credit Risk Management

Market Risk Management

Operational Risk Management

Portfolio Management

Portfolio Modeling

Risk Analytics Benchmarks

Scenario Planning

Stress Tests

Value At Risk Calculation

15

CHAPTER 3
3.1 FEATURE OF INVESTMENT BANKING
1. Top schools
Top bankers go to top schools. Oxford and Cambridge Universities feature disproportionately on
the Financial News list. The London School of Economics is there too, as are top French schools
such as cole Poly technique and HEC.
Nor is it simply a question of getting a top school on your CV. It helps if you have a top school
and top marks at that top school. Take Dominic Ashcroft, a 34-year-old managing director in
high yield at Goldman Sachs, who has a double first in economics from Cambridge University.

2. Multilingualism
As we noted last month, British bankers arent popular in London on the grounds that theyre
often lazy and monolingual. Looking at FNs list of the bankers who are popular, you can see
why. Most top IBD professionals in London have an accumulation of European tongues. Take
39-year-old Alessandro Duse, head of Western European corporate and sovereign derivatives and
head of EMEA equity derivatives at Goldman Sachs, who reportedly speaks five.
When Britons do make it to the top in investment banking, foreign languages are a help. 35-yearold Tom Duff Gordon, director of public policy EMEA at Credit Suisse, studied modern
languages at Oxford..

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3.2 Advantages of investment banking


An investment bank is a financial entity that assists individuals and companies in raising capital
through making investments and engaging in the stock exchange. They enable business
professionals and entities to find the most profitable investments, as well as maintaining them in
the long term.
EFSAG assists individuals and companies in regards to acquiring banking licenses across the
globe. For information, please visit our Licensing Jurisdiction service page.

WHY ENGAGE IN INVESTMENT BANKING


Investment banks not only underwrite and issue securities but they can act as agents for them.
Many individuals and companies acquire the services of investment banks for the underwriting.
Investors seek the services of investment banks as they specialize in the field of investing,
providing specific services such as market marking, trading of derivatives, fixed income
commodities and equity securities.
1. Trading and promoting securities: the cash or other securities are traded in transactions.
This is commonly known as facilitating transactions or market making. These securities
are promoted by their investment bank.
2. Dealing with investors: managing individuals and companies in regards to their
investment; whether it is pension funds, hedge funds, or mutual funds.

3. 3. Masculinity

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4. Like it or not, being a man seems to be a boon if you want to make it in IBD. There are
40 hot young under-40s bankers on the Financial News list; three of them are women.

5. 4. High stamina sporting achievements


6. As befits their high-achieving, ultra-masculine, incredibly-demanding profession,
successful young IBD professionals like to wind-down with some high-stamina
endurance sports. Calvin OShaughnessy, the 32-year-old head of metals and mining
EMEA for UBS, is a keen athlete who intends to compete in three iron man challenges
in 2015. 36-year-old Pieter-Jan Beaten at Greenhill is a keen kite-surfer. He also,
cycled unsupported up the highest road in the world in the Himalayas, although that
was 11 years ago before the desk-job took its toll.

5. Work before play


Successful young investment banking professionals prioritize work above sleep and
pregnancy-rest. 36-year-old Luisa Linear director in utilities, RBC Capital Markets,
closed a big deal two weeks before having her first baby. 30-year-old Serge Mouracade ,
vice-president at Zaoui& Co, only took five days off last year. And Bernard Moored, a
39-year-old managing director at Morgan Stanley, only sleeps four hours a night.

6. Loyalty to the cause


If you want to make it while youre young in IBD, it helps to find an employer who likes
you and to stick around. Take 32-year-old Lazard director Julian Knott, who joined
straight from (Bristol) university in 2005, or 39-year-old Alessandro Duse, who joined
Goldman Sachs as a summer analyst in 2000, was running the firms derivatives business
in Southern Europe in 2004, and has plowed the Goldman furrow ever since.

7. Timely exits to boutiques


While hot bankers under 40 dont job hop, they do make calculated leaps to boutique
firms and small investment banks offering the opportunity for rapid promotion. 36-yearold (Cambridge graduate) Simon Dower quit UBS for Jefferies in 2011 and was
promoted to managing director in 2013. 32-year-old Merrill Lynch alumnus (and Oxford
18

graduate) Anthony Doe joined Moles in 2012 and has worked on several big deals since.
34-year-old (Oxford University) graduate Simon Elliott, quit Deutsche in 2013 and is
now head of healthcare at Evercare.
The moral of the story is.boutiques can offer rapid promotion and good deal-flow.

8. Flagship deals
If you want to catch the eye of a journalist making a list of top performing bankers under
40, it helps to play a pivotal role on some pivotal deals. 34-year-old Ashcroft at Goldman
Sachs hasnt just worked on any old high yield deals, hes worked on, the recordbreaking $10.9 billion high-yield bond offering for French cable operator Numeric able in
April 2014.

9. International perspective
If you dont have a double first in economics from Cambridge University or speak three
European languages to mother-tongue standard, you might want to spend part of your
education or early career working abroad. Weve already noted Goldmans predilection
for hiring international students, and it seems that many of the exceptional young bankers
under 40 have spent part of their lives living or working overseas. Take the exquisitely
named Alexis Tiffin de Toques, a 38-year-old graduate of HEC who grew up on the Ivory
Coast, and in Fiji and Indonesia. He now works for BNP Paribas, pricing bond issues for
the countries he grew up in.

10. No MBA
Theres a notable absence of MBAs on the FN list. Yes, Fahd Beg, head of internet and
digital media for EMEA at Citi has one (from INSEAD), but plenty of others dont.
Could it be that the two years required for an MBA are a hindrance rather than a help if
you want to make it to the top of banking before youre

19

3.3 FACTOR OF INVESTMENT BANKING

The investment banking industry is a lucrative industry with millions of investors. It contributes
to the GDP of many countries especially the developed ones and is often a major indicator of
both capital markets and general economic health of a country. Despite this, the investment
banking industry continues to portend great risk for both existent and potential investors.
There are many investors who have made large fortunes through this industry and yet there are
those that have lost everything they once owned to the same industry. Yet one cannot
underestimate the importance of this industry and potential investors have a good reason to dive
in and become part of its success. There are very important factors that guide this industry and
can help those who invest in it to avoid pitfalls and become more successful. These include:

Systemic risks in the industry


There are potential risks in this industry and such risks are caused by fluctuations in the
economic sectors including currency value changes and also government policies.
Changes in economic growth can also have an impact on the industry and any downward
changes such as a recession can have negative effects on the industry. Some governments
have undertaken policies that protect the investment banking industry.

Efficiency of the banking system


It is important that the investment banking industry is efficient information and trade
within the required times. It is also necessary for proper regulation to be conducted in the
industry to ensure that the investors are well protected.

20

Technology helps to increase efficiency in investment banks.


Through technology the industry has moved up rungs and is able to serve its growing
clientele. It is also possible to make more apt predictions concerning the market trends.
Investors can actually use technology to identify the potential markets in which to
venture into within the industry in different countries all over the world.

Regulatory system.
The investment banking industry is very competitive and sometimes the players might
want to overlook some aspects in order to compete more effectively and attract more
clients than their rivals. Often such a trend by a single player can trigger a ripple effect in
the entire industry and this can cause players to take larger risks in a bid to make higher
profits as well as enhance their competitiveness in the industry. This can only be
prevented and kept in check by strong regulatory systems. The regulatory framework
differs in each country and while some are strong, there are those that are easily to
manipulate. However, there are countries which have curbed such practices and stabilized
their capital markets by incorporating tight regulatory framework.
1. Systemic Risks
These are largely dependent on the structure and processes of a Capital Market system
and the country, which it is associated with. Due to economic fluctuations such as
recession and the recent global economic crisis, the structure of the global Capital
Markets has been strengthened by increasing the authority of regulatory authorities,
setting up new authorities and on having Central Counter Parties (CCP) responsible for
execution of Trade or Trade Guarantee.
CCP mitigates counter-party risk, which means it mitigates potential default of either of
the parties involved in a transaction or trade. The Sub-Prime Crisis of 2008 has triggered
new statutory provisions introduced by Dodd-Frank Wall Street Reform and Consumer
Protection Act (also known as Dodd-Frank Act), specifying a mandate on record keeping
and reporting of credit swaps.
2. Efficiency

21

Efficiency is the ability of the system to process Trades, irrespective of their volume, at
the earliest and within the stipulated time without errors.

3. Reliable Systems
Reliable systems need to be available and operational all the time irrespective of risks
from internal failures and external events.
4. Cost
Cost per Trade or Transaction (to clear both sides of a Trade) matters most for many
investors.
5. Technology Influence
Today technology has a great impact on all these influencing factors mentioned above.
Regulatory authorities and CCPs need accurate database and monitoring systems.
Efficiency of the system can be at the best with the use of the right technology. When the
right technology is provided with good back-up (redundancy), a system becomes more
reliable. Cost is controlled by improving efficiency, which is again dependent on
technology.It is technology that saved us from the paper crisis in 1960s, when the
settlement time was increased to 5 days to catch up with the paper work. With this, not
only the need of paper was eliminated to a significant extent, but it also brought in more
transparency and efficiency in to the system.

22

3.4 ROLE OF INVESTMENT BANKING & ADVISOR

ROLE OF INVESTMENT BANKING

Underwriting New Stock Issues


One of the primary roles of an investment bank is to serve as a sort of intermediary
between corporations and investors through initial public offerings (IPOs). Investment
banks provide underwriting services for new stock issues when a company decides to go
public and seeks equity funding. Underwriting basically involves the investment bank
purchasing an agreed-upon number of shares of the new stock, which it then resells
through a stock exchange.
Part of the investment bank's job is to evaluate the company and determine a reasonable
price at which to offer stock shares. IPOs, especially for larger companies, commonly
involve more than one investment bank. This way, the risk of underwriting spreads across
several banks, reducing the exposure of any single bank and requiring a relatively lower
financial commitment to the IPO. Investment banks also act as underwriters for corporate
bond issues.

Financial Advisory Roles


Investment bankers act in several different advisory capacities for their clients. In
addition to handling IPOs, investment banks offer corporations advice on taking the
company public or on raising capital through alternative means. Investment banks
regularly advise their clients on all aspects of financing.
Handling mergers and acquisitions is a major function of investment bankers.

23

The sale of stocks and bonds is one of the primary ways for a company to raise capital.
But executing these transactions requires special expertise, from pricing financial
instruments in a way that will maximize revenue to navigating regulatory requirements.
Thats where an investment bank usually comes into the picture.

Role as an advisor
Deciding how to raise capital is a major decision for any company or government. In
most cases, they lean on an investment bank either a large Wall Street firm or a
boutique banker for guidance.
Taking into account the current investing climate, the bank will recommend the best way
to raise funds. This could entail selling an ownership stake in the company through a
stock offer or borrowing from the public through a bond issue.
In the case of a stock offering, its financial analysts will look at a variety of different
factors such as earnings potential and the strength of the management team to
estimate how much a share of the company is worth. If the client is offering bonds, the
bank will look at prevailing interest rates for similarly rated businesses to figure out how
much it will have to compensate borrowers.
Investment banks also offer advice in a merger or acquisition scenario. For example, if a
business is looking to purchase a competitor, the bank can advise its management team
on how much the company is worth and how to structure the deal in a way thats
favorable to the buyer.

24

3.5 QUALIFICATION FOR INVESTMENT BANKING

A Masters in Business Administration with 2 Years of post graduate study is essential to


grow up in this particular area

Jobs in entry-level for analyst programs are obtainable to those graduate undergoes
whoRequire experience in investment banking profession

Analysts are essential in making proposals in finance and travel in order to sit with the
clientsDuring meeting and session where senior bankers discuss ideas to potential
customer

After this comes the requirement of MBA degree holder investment banker
1. Know some finance. You need to know some finance and some institutional
knowledge to do your job. It is IB after all. Learn some corporate finance and
valuation.
2. Know some accounting. Yes, you have to know accounting to understand
firms and be able to do deals.
3. Excel/ PPT. Be an excel wizard and your boss will love you. Excel is essential in IB.
Powerpoint is also necessary. Someone has to make the pitchbooks pretty.
4. . Be a good writer. You will have to write more than you think. Plus, being a good
writer always helps in life.
5. Be a good communicator. Things can go out of control when deals become live or
something just explodes. If you don't communicate well then you will have a hard
time and get frustrated.

25

6. Work super long hours. Hours are really bad in IB. I mean very bad. Everyone in IB
has a story on how they worked 80 hrs straight. Unfortunately, they are not
exaggerating.
7. Don't take it personally. This is finance and it can be rough, especially when dealing
with lots of money. Please don't take the roughness and I don't care attitude personally
or IB will become hellish.
8. Enjoy and if not leave. IB can provide great training and super work ethics. Plus, the
money is good. However, if you don't like it, leave as soon as possible. There are
other great jobs available in the world. Qualification is either the process of
qualifying for an achievement, or a credential attesting to that achievement, and may
refer to:Qualification badge, a decoration of People's Liberation Army Type 07
indicating military rank or length of serviceQualifications-Based Selection (QBS), a
competitive contract procurement process established by the United States
CongressQualifications for professional social work, professional degrees in social
work in various nationsQualification problem, the impossibility of listing all the
preconditions required for an action to have its intended effectQualification principle,
in programming language theory, the statement that syntactic classes may admit local
definitionsQualification types in the United Kingdom, different levels of academic,
vocational or skills-related education achievementsInternational Qualification
Examination, taken by foreign accountants to become a Certified Public Accountant
in the United StatesPre-qualification (lending), a process by which a lending
institution estimates how much it is willing to lend to a borrowerSchool leaving
qualification, academic qualification awarded for the completion of high school in
various times and countriesScottish Vocational Qualification, certificate of vocational
education in Scotland

26

CHAPTER 4
AVENUE CAPITAL GROUP

Avenues investment professionals seek "good companies with bad balance sheets" firms with
sustainable businesses and positive cash flow but whose financial situation is distressed. The
investment team uses Avenues top-down/bottom-up approach to find undervalued opportunities
and typically seeks to make non-operational control investments in troubled businesses. This
provides the strategy maximum trading flexibility and allows Avenues investment professionals
to focus on pre-investment research and analysis rather than post-investment operating issues

4.1History
Avenue Capital Group was founded in 1995 by Marc Lawry and Sonia Gardner. Pioneers in the
distressed debt market, Mr. Lawry and Ms. Gardner have successfully invested in the public and
private debt and equity securities of distressed companies across a variety of industries for over
two decades.
Prior to founding Avenue, Mr. Lawry and Ms. Gardner founded Amcor Investments, LLC.
Armco began in 1989 as a $100 million distressed debt investment partnership organized by Mr.
Lawry and Ms. Gardner in association with the Robert M. Bass Group, Inc.

27

Headquartered in New York, with offices in London, Luxembourg, Madrid, Milan, Munich
and five offices throughout Asia, the firm manages assets estimated to be approximately $10.8
billion as of August 31, 2016.

A global investment firm focusing on distressed securities[2] and private equity with regional
teams focusing on opportunities in the United States, Europe and Asia. The firm operates as both
a private equity firm and as a hedge fund. Avenues core strategy is focused on debt and equity
securities although the firm also manages investment funds that focus on long-short
opportunities, real estate, and collateralized debt obligations. The firm manages assets valued at
approximately $12 billion.The firm was founded by former professionals of Armco Investments,
an affiliate of the Robert M. Bass Group.
The firm is headquartered in New York City, with offices in London,
Luxembourg, Munich, Beijing, Hong Kong, New Delhi and Singapore. The firm has established
an institutional-quality infrastructure in terms of accounting, compliance legal, investor relations,
and information technology capabilities. Avenue has approximately 220 employees across its 8
offices worldwide.
Avenues investment professionals seek "good companies with bad balance sheets" firms with
sustainable businesses and positive cash flow but whose financial situation is distressed. The
investment team uses Avenues top-down/bottom-up approach to find undervalued opportunities
and typically seeks to make non-operational control investments in troubled businesses. This
provides the strategy maximum trading flexibility and allows Avenues investment professionals
to focus on pre-investment research and analysis rather than post-investment operating issues.
From 2006 to 2009, Chelsea Clinton, daughter of former President of the United States Bill
Clinton and former Secretary of State Hillary Clinton, worked as an associate at Avenue Capital
Group LLC.
Bloomberg reported that as of February 28, 2010, Avenue Capital Group is the 13th largest hedge
fund in the world

28

29

4.2 TOP 6INVESTMENT BANKIG IN INDIA

Acquisitions

1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai

1997: ITC Classic Finance. incorporated in 1986, ITC Classic was a non-bank financial
firm that engaged in hire, purchase, and leasing operations. At the time of being acquired,
ITC Classic had eight offices, 26 outlets, and 700 brokers.

1998: Anagram(ENAGRAM) Finance. Anagram had built up a network of some 50


branches in Gujarat, Rajasthan, and Maharashtra that were primarily engaged in retail
financing of cars and trucks. It also had some 250,000 depositors.

2001: Bank of Madurai

2002: The Darjeeling and Sheila branches of Grind lays Bank[23]

2005: Investision- Kreditny Bank (IKB), a Russian bank

ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public offering
of shares in India in 1998, followed by an equity offering in the form of American
Depositary

Receipts on

the NYSE in

2000.ICICI

Bank

acquired

the Bank

of

Madura Limited in an all-stock deal in 2001 and sold additional stakes to institutional
investors during 2001-02.[

30

In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group, offering a wide
variety of products and services, both directly and through a number of subsidiaries and
affiliates like ICICI Bank.

In 2000, ICICI Bank became the first Indian bank to list on the New York Stock
Exchange with its five million American depository shares issue generating a demand
book 13 times the offer size.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger
of ICICI and two of its wholly owned retail finance subsidiaries, ICICI Personal
Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The
merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by
the High Court of Gujarat at Ahmedabad in March 2002 and by the High Court of
Judicature at Mumbai and the Reserve Bank of India in April 2002.

In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and
branches in some locations due to rumors of adverse financial position of ICICI Bank.

31

ICRA Credit Rating


ICRAs credit ratings are symbolic representations of its current opinion on the relative credit
risks associated with the rated debt obligations/issues. These ratings are assigned on an Indian
(that is, national or local) credit rating scale for Rupee (local currency) denominated debt
obligations. ICRA ratings may be understood as relative rankings of credit risk within India.
ICRA ratings are not designed to enable any rating comparison among instruments across
countries; rather these address the relative credit risks within India.
ICRAs ratings (other than Structured Finance Ratings) in the investment grade convey the
relative likelihood of default, that is, the possibility of the debt obligation not being met as
promised. All other ratings, including Structured Finance Ratings, reflect both the probability of
default and the severity of loss on default, that is, the expected loss against the rated debt
obligation.
Secretary to the Department of Agricultural Research and Education (DARE), T. Mohapatra, on
Saturday said the ongoing row over Bt cotton seed pricing is a pointer to the significance of
making more investments in public research on technologies.
[It] emphasizes that the public system should invest more to have its own technologies in place
so that we are not over-dependent on one particular agency, he replied to a query on the veiled
threat of agric biotech major Monsanto to withdraw from India over the pricing.

32

Expressing hope that the issue could be resolved through negotiations and discussions, Dr.
Mohapatra, who is the Director General of Indian Council of Agricultural Research (ICAR) as
well, said apart from protecting the interest of farmers, the enhanced investments would ensure
against monopolization of the market. In the city on a two-day visit from Friday to all the ICAR
institutes, he interacted with presspersons at the Indian Institute of Millets Research.
For Monsanto, he explained, withdrawing should be very tough as India is a very big market for
them. Moreover, the company has been in the country for 15 years now. Without discounting
the trouble that may crop up if Monsanto -- which licenses the Bt technology through Mayo
Monsanto Biotech (India) -- leaves, the official said the government was preparing alternative
technologies for BT cotton .The Central Institute for Cotton Research (CICR) is on the job and
made some progress. There is a need to do more, he said, adding greater efforts and more
investments are called FO
ICRAs credit ratings are symbolic representations of its current opinion on the relative credit
risks associated with the rated debt obligations/issues. These ratings are assigned on an Indian
(that is, national or local) credit rating scale for Rupee (local currency) denominated debt
obligations. ICRA ratings may be understood as relative rankings of credit risk within India.
ICRA ratings are not designed to enable any rating comparison among instruments across
countries; rather these address the relative credit risks within India.
ICRAs ratings (other than Structured Finance Ratings) in the investment grade convey the
relative likelihood of default, that is, the possibility of the debt obligation not being met as
promised. All other ratings, including Structured Finance Ratings, reflect both the probability of
default and the severity of loss on default, that is, the expected loss against the rated debt
obligation.
Credit ratings apart, ICRA also assigns Corporate Governance Ratings, besides Performance
Ratings, Grading and Rankings to mutual funds, construction companies and hospitals.

33

Performance in General
After its latest merger with the United Western Bank on 3 October 2006, IDBI is now
regarded as a top notch name among the new generation banks of India. Most of its shares
are held by the Indian Government and it caters to millions of consumers with a wide range
of services in both corporate and retail segment. It also operates in the agricultural and SME
sectors, which are very crucial for the overall development of the Indian economy. The bank
is well-known for its confident strategy-making and owes much of its success to its devoted
and capable employees.

IDBI Bank Management


IDBI Bank is headed by M.S. Raghavan , who acts as its Chairman and Managing
Director. It has two Deputy Managing Directors B.K. Bart and M.O. Rego. Other
important members of its management team are Sinhala Shrivastava, Panda Vats, P.S.
Shiny, S. Ravi and Nina dKarpe - See more.

34

Recent Initiatives
IDBI Bank and the National Payments Corporation of India (NPCI) have recently entered into a
partnership deal. Together, they will be introducing the Repay Platinum Debit Card, which will
primarily serve Indian consumers, merchants and banks. The benefits of the Repay debit card are
product platform flexibility and high acceptance level. This may be seen as a step by the
publicly-owned organization to foster the idea of transactions using cards and remain
competitive.
IDBI, in association with the Life Insurance Corporation of India (LIC),is supposed to execute
the Prada

Mantra

Jevons

JyotiBima Yolanda and has also enacted a Memorandum of

Understanding (MoU) for the same. This benefit will be provided to people who are currently
having accounts at IDBI Bank. In a statement, IDBI has also clarified that the insurance scheme
was primarily announced by PM Narendra Modi in order to deal with crucial social challenges
by way of ensuring social security.

Products and Services


The products and services of IDBI Bank are offered under five different heads Personal,
Corporate, MSME, Agra and NRI banking.

35

SBI Capital Markets Ltd. (SBICAP) :is Indias largest domestic Investment Bank,
offering the entire gamut of investment banking and corporate advisory services. These services
encompass Project Advisory and Loan Syndication, Structured Debt Placement, Capital Markets,
Mergers & Acquisitions, Private Equity and Stressed Assets Resolution.
We are a complete solutions provider offering diversified financial advisory and investment
banking services, innovative ideas and unparalleled execution to our client base across all stages
of the business cycle. Our services

range from venture capital advisory, project advisory, buy

and sell-side advisory, accessing financial

markets to raise capital and even restructuring

advisory in their turn-around phases.


SBICAP is the sole Indian member of M&A International. M&A International Inc. offers the
unparalleled resources of over 600 professionals in 46 M&A advisory and investment banking
firms operating in 40 countries.

SBI Capital Markets (SBICAPS) is an investment bank founded in August 1986. It is a


wholly

owned

subsidiary

and

the

investment

banking

arm

of State

Bank

of

India (SBI). Headquartered in Mumbai, SBICAP has 5 regional offices across India
(Ahmedabad, Chennai, Hyderabad, Kolkata and New Delhi), 2 branch offices (Pune and
Guwahati) and 5 subsidiaries - SBICAP Securities Limited, SBICAP Trustee Company Limited,
SBICAP Ventures Limited, SBICAP (UK) Limited and SBICAP (Singapore) Limited.

36

SBICAP also offers services in the areas of Equity Broking & Research, Security Agency &
Debenture Trusteeship and Private Equity Investment & Asset Management through its wholly
owned subsidiaries SBICAP Securities Limited, SBICAP Trustee Co. Ltd and SBICAP Ventures
Limited, respectively.
In January 1997 the Asian Development Bank acquired a 13.84% equity stake in SBICAPS. This
share was repurchased by State Bank of India in March 2010. In January 2006 SBICAP and the
international investment banking group CLSAannounced a two-year partnership to work on large
joint deals in equity capital and mergers & acquisitions.In September 2006 SBI Caps announced
that it had set up a $100 million venture fund in partnership with the venture capital division
ofSBI Holdings of Japan.
Air India ran into serious financial difficulties, and in July 2009 SBICAPS was asked by Civil
aviation minister Par full Patel to prepare a road map to bring the carrier back into
profitability SBI Capital was appointed the mandated firm to restructure Kingfisher
Airlines loans during the Kingfisher Airlines financial crisis, starting in 2010.

37

At the time of independence in 1947, India's capital market was relatively underdeveloped.
Although there was significant demand for new capital, there was a dearth of
providers. Merchant bankers and underwriting firms were almost non-existent. And commercial
banks were not equipped to provide long-term industrial finance in any significant manner.
It is against this backdrop that the government established The Industrial Finance Corporation of
India (IFCI) on 1 July 1948. The newly established DFI was provided access to low-cost funds
through the central bank's Statutory Liquidity Rate or SLR which in turn enabled it to provide
loans and advances to corporate borrowers at concessional rates.
This arrangement continued until the 1990s when it was recognized that there was need for
greater flexibility to respond to the changing financial system. It was also felt that IFCI should
directly access the capital markets for its funds needs. It is with this objective the constitution of
IFCI was changed in 1993 from a statutory corporation to a company under the Indian
Companies Act, 1956. Subsequently the name of the company was also changed to 'IFCI Limited
' with effect from October 19

38

CHAPTER 5

ORGANIZATION STRUCTURE OF INVESTMENT BANKING

Front Office
Think you want to be an investment banker? Chances are the role you are imagining is a
front office role. The front office generates the banks revenue and consists of three
primary divisions: investment banking, sales & trading, and research. Investment
banking is where the bank helps clients raise money in capital markets and also where the
bank advises companies on mergers & acquisitions. At a high level, sales and trading is
where the bank (on behalf of the bank and its clients) buys and sells products. Traded
products include anything from commodities to specialized derivatives. Research is
where banks review companies and write reports about future earnings prospects. Other
financial professionals buy these reports from these banks and use the reports for their
own investment analysis.
Other potential front office divisions that an investment bank may have include:
commercial banking, merchant banking, investment management, and global transaction
banking.

Middle Office
Typically includes risk management, financial control, corporate treasury, corporate
strategy, and compliance. Ultimately, the goal of the middle office is to ensure that the
investment bank doesnt engage in certain activities that could be detrimental to the
banks overall health as a firm. In capital raising, especially, there is significant
interaction between the front office and middle office to ensure that the company is not
taking on too much risk in underwriting certain securities.
A back office in most corporations is where tasks dedicated to running the company
itself take place. The term "back office" comes from the building layout of early
companies where the front office would contain the sales and other customer-facing staff
and the back office would be those manufacturing or developing the products or those
involved in administration without being seen by customers. Although the operations of a
back office are seldom prominent, they are a major contributor to a business. Broadly

39

speaking, back office includes roles that affect the left side (costs) of business' trading
statement.
Back offices may be located somewhere other than company headquarters. Many are in
areas and countries with cheaper rent and lower labor costs. Some office parks such
asMetroTech Center provide back offices for tenants whose front offices are in more
expensive neighborhoods. Back office functions can be outsourced to consultants and
contractors, including ones in other countries.organizational structure defines
how activities such as task allocation, coordination and supervision are
directed toward the achievement of organizational aims. [1] It can also be
considered as the viewing glass or perspective through which individuals see
their organization and its environment.

Organizations are a variant of clustered entities.


An organization can be structured in many different ways, depending on its objectives.
The structure of an organization will determine the modes in which it operates and
performs.
Organizational structure allows the expressed allocation of responsibilities for different
functions and processes to different entities such as
the branch,department, workgroup and individual.
Organizational structure affects organizational action in two big ways:

First, it provides the foundation on which standard operating procedures and routines rest.

Second, it determines which individuals get to participate in which decision-making


processes, and thus to what extent their views shape the organizations actions

CHAPTER 6

40

FIANCIAL CRISIS
6.1 Financial crisis of 2007-2008
The 2008 financial credit crisis led to the collapse of several notable investment banks, such as
the bankruptcy of large investment bank, Lehman Brothers; and the hurried sale of Merrill Lynch
and the much smaller Bear Stearns to much larger banks which effectively rescued them from
bankruptcy. The entire financial services industry, including numerous investment banks, was
rescued by government loans through the Troubled Asset Relief Program (TARP). Surviving
U.S. investment banks such as Goldman Sachs and Morgan Stanley converted to traditional bank
holding companies to accept TARP relief.Similar situations occurred across the globe with
countries rescuing their banking industry. Initially, banks received part of a $700 billion TARP
intended to stabilize the economy and thaw the frozen credit markets.Eventually, taxpayer
assistance to banks reached nearly $13 trillion, most without much scrutiny, lending did not
increase.and credit markets remained frozen.
The crisis led to questioning of the business model of the investment bank.without the regulation
imposed on it by Glass-Steagall.Once Robert Rubin, a former co-chairman of Goldman Sachs,
became part of the Clinton administration and deregulated banks, the previous conservatism of
underwriting established companies and seeking long-term gains was replaced by lower
standards and short-term profit.Formerly, the guidelines said that in order to take a company
public, it had to be in business for a minimum of five years and it had to show profitability for
three consecutive years.
A number of former Goldman-Sachs top executives, such as Henry Paulson and Ed Liddy were
in high-level positions in government and oversaw the controversial taxpayer-funded bank
bailout. The TARP Oversight Report released by the Congressional Oversight Panel found that
the bailout tended to encourage risky behavior and "corrupt the fundamental tenets of a market
economy".
Under threat of a subpoena, Goldman Sachs revealed that it received $12.9 billion in taxpayer
aid, $4.3 billion of which was then paid out to 32 entities, including many overseas banks, hedge
funds and pensions.The same year it received $10 billion in aid from the government, it also paid

41

out multimillion-dollar bonuses; the total paid in bonuses was $4.82 billion.Similarly, Morgan
Stanley received $10 billion in TARP funds and paid out $4.475 billion in bonuses.
The investment banking industry, and many individual investment banks, have come under
criticism for a variety of reasons, including perceived conflicts of interest, overly large pay
packages, cartel-like or oligopoly behavior, taking both sides in transactions, and
more. Investment banking has also been criticized for its opacity.
The crisis threatened the collapse of large financial institutions, which was prevented by
the bailout of banks by national governments, but stock markets still dropped worldwide. In
many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged
unemployment. The crisis played a significant role in the failure of key businesses, declines in
consumer wealth estimated in trillions of U.S. dollars, and a downturn in economic activity
leading to the Great Recession of 20082012 and contributing to the European sovereign-debt
crisis. The active phase of the crisis, which manifested as a liquidity crisis, can be dated from
August 9, 2007, when BNP Paribas terminated withdrawals from three hedge funds citing "a
complete evaporation of liquidity"

6.2 BREAKING DOWN INVESTMENT BANKING

42

BREAKING DOWN 'Investment Banking '


Many large investment banks are affiliated with or subsidiaries of larger banking institutions, and
many have become household names, the largest being Goldman Sachs, Morgan Stanley,
JPMorgan Chase, Bank of America Merrill Lynch and Deutsche Bank. Broadly speaking,
investment banks assist in large, complicated financial transactions. This may include advice as
to how much a company is worth and how best to structure a deal if the investment bankers
client is considering an acquisition, merger or sale It may also include the issuing of securities as
a means of raising money for the client groups, and creating the documentation for the Securities
and Exchange Commission necessary for a company to go public.
Investment banks employ investment bankers who help corporations, governments and other
groups plan and manage large projects, saving their client time and money by
identifying risks associated with the project before the client moves forward. In theory,
investment bankers are experts in their field who have their finger on the pulse of the current
investing climate, so businesses and institutions turn to investment banks for advice on how best
to plan their development, as investment bankers can tailor their recommendations to the present
state of economic affairs.
Lower investment banking fees were generated across the majority of jurisdictions in Europe
compared with a year ago. In Europe, exceptions are to be found in the bottom half of the
ranking, with the largest growth shown by Turkey, where fees were 57% higher in the 12 months
to the end of March this year than in the previous period. The country's growth was led by loans,
which represented 45% of the fee mix, followed at some distance by bonds (25%), mergers and
acquisitions (15%), and equity (14%).
Across Europe, investment banking fees for the top 25 countries totaled $17.5bn, down 11%
from the previous 12-month period. Debt capital market (DCM) products and mergers and
acquisitions were the best performers, each accounting for about one-third of the fee pool. The
UK safely retains its top spot, with a total fee pot of $4.08bn. This figure, however, is 4% lower
than the previous 12 months. France and Germany follow with $2.24bn and $1.97bn,
respectively, but their performance deteriorated by a higher margin about 20% each.
43

In central and eastern Europe, fees for the top 15 countries were also down 11%, reaching $304m
over the past 12 months . Despite a large dip in its activity (-41%), Poland continues to top the
table for central and eastern Europe. The most improved jurisdictions are Slovakia and Croatia,
with an impressive growth of 460% and 361%, respectively. While in Poland it was equity
products that drove investment banking fees representing 40% of the countrys mix loans
were stronger in Slovakia (69% of the fee pool) and bonds were by far the largest fee generator
in Croatia (91% of the mix).

Breaking Dawn is the fourth novel in the The Twilight Saga by American author Stephanie
Meyer. Divided into three parts, the first and third sections are written from Bella Swan's
perspective and the second is written from the perspective of Jacob Black. The novel directly
follows the events of the previous novel, Eclipse, as Bella and Edward Cullen get married,
leaving behind a heartbroken Jacob. When Bella faces unexpected and life-threatening situations,
she willingly risks her human life and possible vampire immortality to undergo the ultimate
transformation from a weak pawn to the strong queen with unique powers to fight the final battle
to save all those she loves.
Meyer finished an outline of the book in 2003, but developed and changed it as she wrote New
Moon and Eclipse, though the main and most significant storylines remained unchanged. Little,
Brown and Company took certain measures to prevent the book's contents from leaking, such as
closing forums and message boards on several fansites and providing a special e-mail address for
fans to send in links to leaks and spoilers online.

6.3 OFFERING & SERVICES OF INVESTMENT BANKS

44

Project Counseling:
Project counseling includes preparation of project reports, deciding upon the financing pattern to
finance the cost of the project and appraising the project report with the financial institutions
or banks. It also includes filling up of application forms with relevant information for obtaining
funds from financial institutions and obtaining government approval.

Issue Management:
Management of issue involves marketing of corporate securities viz. equity shares, preference
shares and debentures or bonds by offering them to public. Investment banks act as an
intermediary whose main job is to transfer capital from those who own it to those who need it .
After taking action as per SEBI guidelines, the Investment banker arranges a meeting with
company representatives and advertising agents to finalize arrangements relating to date
of opening and closing of issue, registration of prospectus, launching publicity campaign and
fixing date of board meeting to approve and sign prospectus and pass the necessary resolutions.
Pricing of issues is done by the companies in consultant with the Investment bankers.

Underwriting of Public Issue:


Underwriting is a guarantee given by the underwriter that in the event of under subscription,
them out underwritten would be subscribed by him. Banks/Investment banking subsidiaries
cannot underwrite more than 15% of any issue.

Managers, Consultants or Advisers to the Issue:


The managers to the issue assist in the drafting of prospectus, application forms and completion
of formalities under the Companies Act, appointment of Registrar for dealing with share
applications and transfer and listing of shares of the company on the stock exchange. Companies
can appoint one or more agencies as managers to the issue.

Portfolio Management:
Portfolio refers to investment in different kinds of securities such as shares, debentures or bond
sissue by different companies and government securities. Portfolio management refers

45

tomaintaining proper combinations of securities in a manner that they give maximum return
withminimum risk.

Advisory Service Relating to Mergers and Takeovers:


A merger is a combination of two companies into a single company where one survives and
other loses its corporate existence. A takeover is the purchase by one company acquiring
controllingin the share capital of another existing company.
The term "providing professional engineering services to the public" is used in conjunction with
two specific regulatory issues mentioned in the Professional Engineers Act: the sealing of
engineering documents and the need for a Certificate of Authorization. A P .Eng. is providing
professional engineering services when s/he undertakes any of the activities considered to be
within the practice of professional engineering for the benefit of an employer or 'the public'. For
the purposes of all regulatory directives regarding engineering practice, 'the public' is considered
to be anyone other than him/herself or the professional engineer's employer. Therefore, a P.Eng.
is providing professional engineering services to the public when the work is done for the benefit
of an individual, corporation, government or other entity that is not the engineer's employer.
Professional engineers who provide engineering services directly to the public must have a
Certificate of Authorization. In addition, only a professional engineer who has been designated
as a consulting engineer by PEO can use the restricted title consulting engineer

6.4 INITIAL PUBLIC OFFERINGS

46

Initial Public Offerings (IPOs) are the first time a company sells its stock to the public.
Sometimes IPOs are associated with huge first-day gains; other times, when the market is cold,
they flop. It's often difficult for an individual investor to realize the huge gains, since in most
cases only institutional investors have access to the stock at the offering price. By the time the
general public can trade the stock, most of its first-day gains have already been made. However,
a savvy and inform dine should still watch the IPO market, because this is the first opportunity
to buy these stocks.

Reasons for an IPO


When a privately held corporation needs to raise additional capital, it can either take on debt or
sell partial ownership. If the corporation chooses to sell owner ship to the public, it engages in an
IPO. Corporations choose to "go public" instead of issuing debt securities for several reasons.
The most common reason is that capital raised through an IPO does not have to be repaid,
whereas debt securities such as bonds must be repaid with interest. Despite this apparent benefit,
there are also many drawbacks to an IPO.

Going Public
If a corporation decides that it is going to perform an IPO, it will first hire an investment bank to
facilitate the sale of its shares to the public. This process is commonly called "underwriting"; the
bank's role as the underwriter varies cording to the method of underwriting agreed upon, but its
primary function
remains the same . In accordance with the Securities Act of 1933, the corporation will file a
registration statement with the Securities and Exchange Commission (SEC). The registration
statement must fully disclose all material information to the SEC , including a description of
the corporation, detailed financial statements, biographical information on insiders, and the
number of shares owned by a chinsider. After filing, the corporation must wait for the SEC to
investigate the registration statement and approve of the full disclosure . During this period
while the SEC investigates the corporation's filings, the underwriter will try to increase demand
for the corporation's stock.

Performance
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The aftermarket performance of an IPO is how the stock price behaves after the day of its
offering on the secondary market (such as the NYSE or the NASDAQ).Investors can use this
information to judge the likelihood that an IPO in a specific industry or from a specific lead
underwriter will perform well in the days (or months) following its offering. The first-day gains
of some IPOs have made investors all too aware of the money to be had in IPO investing.
Unfortunately, for the small individual investor, realizing those much-publicized gains is near
impossible.

6.5 ADVANTAES & DISADVANTAGES OF INITIAL PUBLIC OFFERINGS


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Advantages
When a company lists its securities on a public exchange, the money paid by the investing public
for the newly issued shares goes directly to the company (primary offering) as well as to any
early private investors who opt to sell all or a portion of their holdings (secondary offering) as
part of the larger IPO. An IPO, therefore, allows a company to tap into a wide pool of potential
investors to provide itself with capital for future growth, repayment of debt, or working capital.
A company selling common shares is never required to repay the capital to its public investors.
Those investors must endure the unpredictable nature of the open market to price and trade their
shares. After the IPO, when shares trade freely in the open market, money passes between public
investors. For early private investors who choose to sell shares as part of the IPO process, the
IPO represents an opportunity to monetize their investment. After the IPO, once shares trade in
the open market, investors holding large blocks of shares can either sell those shares piecemeal
in the open market, or sell a large block of shares directly to the public, at a fixed price, through
a secondary market offering. This type of offering is not dilutive, since no new shares are being
created.
Once a company is listed, it is able to issue additional common shares in a number of different
ways, one of which is the follow. This method provides capital for various corporate purposes
through the issuance of equity (see stock dilution) without incurring any debt. This ability to
quickly raise potentially large amounts of capital from the marketplace is a key reason many
companies seek to go public.
An IPO accords several benefits to the previously private company:

Enlarging and diversifying equity base

Enabling cheaper access to capital

Increasing exposure, prestige, and public image

Attracting and retaining better management and employees through liquid equity
participation

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Facilitating acquisitions (potentially in return for shares of stock)

Creating multiple financing opportunities: equity, convertible debt, cheaper bank loans,
etc.

Disadvantages
There are several disadvantages to completing an initial public offering:

Significant legal, accounting and marketing costs, many of which are ongoing

Requirement to disclose financial and business information

Meaningful time, effort and attention required of management

Risk that required funding will not be raised

Public dissemination of information which may be useful to competitors, suppliers and


customers.

Loss of control and stronger agency problems due to new shareholder

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7CONCLUSION

The future of investment banking industry as a whole looks bright many more pure merchant
bank and advisory firms could convert themselves into full services investment bank that would
broaden the market and make the services delivery much
technology and

development market shaping

the

more efficient

. In addition the

capital market would also provision an

added path to the growth of investment banking . Better regulatory supervision and stricter
enforcement of the code of conduct of

the market intermediaries would ensure better issuers

come to market and existing issuers would follow enhanced standard of corporate governance. In
long run all these development would

ensure fair return to investors to encourage them to

invest in the market .


Banks provide security and convenience for managing your money and sometimes allow you to
make money by earning interest. Convenience and fees are two of the most important things to
consider when choosing a bank.
Writing and depositing checks are perhaps the most fundamental ways to move money in and out
of a checking account, but advancements in technology have added ATM and debit card
transactions and ACH transfers to the mix.
All banks have rules about how long it takes to access your deposits, how many debit card
transactions you're allowed in a day, and how much cash you can withdraw from an ATM.
Access to the balance in your checking account can also be limited by businesses that place holds
on your funds.
Debit cards provide easy access to the cash in your account, but can cause you to rack up fees if
you're not careful.
While debit cards encourage more responsible spending than credit cards, they do not offer the
same protection or perks to consumers.
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WEBLOGARPHY

www. Investopedia .com


www.Economic times .com
www.India express.com
www.wikikepidia .com

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