A presentation on Finacial Services Industry at the Industry Meets Students program for the students of the Hyderabad Chapter of ICWAI on 5th Sep 2010 at Bhaskara Auditorium in Birla Planetarium, Saifabad, Hyderabad
Career Options And Preparation For Financial Services Jobs
Want to work for us? Five things you should know Hyderabad Chapter - ICWAI September 5, 2010 T P Devarajan Director (Investments) Invascent Advisory Services India Private Limited
Some Statistics for you <ul><li>The Indian Financial Services Sector is large in size </li></ul><ul><ul><ul><li>The banking system has assets of USD 335 billion </li></ul></ul></ul><ul><ul><ul><li>Mutual Funds manage assets of about USD 170 billion </li></ul></ul></ul><ul><ul><ul><li>The Insurance sector was about USD 40 billion in size in 2009-10 </li></ul></ul></ul><ul><ul><ul><li>India-dedicated Private Equity Funds raised USD 4 billion in Calendar Year 2009 </li></ul></ul></ul>
Some Statistics for you <ul><li>The Sector’s growth has been impressive </li></ul><ul><ul><ul><li>India ranked No 1, ahead of the US, in the global Project Finance market </li></ul></ul></ul><ul><ul><ul><ul><li>The Indian market accounted for about 20% of the world Project Finance market with USD 30 billion being raised </li></ul></ul></ul></ul><ul><ul><ul><li>The Assets under Management of the Mutual Fund industry grew at a CAGR of over 30% between 2005 and 2009, compared to the global average of 4% </li></ul></ul></ul><ul><ul><ul><li>India-dedicated PE Funds accounted for 18% of funds raised for emerging market investments </li></ul></ul></ul>
Some Statistics for you <ul><li>No wonder, the Sector has a positive impact on economic growth </li></ul><ul><ul><ul><li>While the Indian economy grew 7.4% in 2009-10, the Financial Services Sector grew 9.7% </li></ul></ul></ul>
The Sector is large and growing rapidly You should consider seeking opportunities here Now You Know!
Case 1 Raju, a 47-year old MBA, is a Private Equity Fund’s representative on the Board of Innovative Drugs (Innovative). Innovative manufactures injectable medicines and sells them to Companies that market them in the Indian market. Innovative has a portfolio of 25 difficult-to-make products which are manufactured in a multi-purpose plant. Each product has different set up and cycle times. The utilization of different plant facilities also varies according to the product manufactured.
Case 1 (contd.) Raju is convinced that Innovative is not using a scientific basis to quote prices to its customers. The MD seems to quote prices off-hand when enquiries are received. Although the Company’s EBITDA margin is comparable to the industry average, Raju feels that the margin can be much higher given the nature of products manufactured. He feels that the key to improving margins is to get better price realizations. Raju has approached you for help. How can you as a Cost Accountant help him?
Case 2 Ravi, a Cost Accountant, has joined Raju’s Private Equity Fund as an Analyst. His role is to review financial statements of companies where investment is contemplated and comment on the financial strength, past performance and accounting practices of the Company. Ravi’s analysis helped the fund identify additional risks in certain investment opportunities and those opportunities were declined.
Case 2 (contd.) Raju’s Private Equity Fund received an investment opportunity by mail yesterday. The Company seeking funds is setting up a chain of high-end Cardiology treatment centres across India. The Company already has five centres in operation and is doing well. It plans to set up 10 more centres across India at a cost of Rs 250 crores and has sent Raju business plan. As the Company is in a hurry to raise funds, it wants Raju’s Fund to indicate prima facie interest by Monday evening.
Case 2 (contd.) Raju is busy chasing two other deals and does not have the time to evaluate the Company and assigns the task to Ravi. Apart from evaluating the historical financial performance of the Company, Ravi also has to assess the market opportunity for Cardiology services in India. How would you go about assessing the market opportunity if you were Ravi?
You will grow if you expand your skill set Now You Know!
Case 3 Ravi is now the Financial Controller of a leading financial products distribution company with 75 branches across India. The Company has been loss making for the last two years and is facing a cash crunch. Its compensation plan has a large variable component linked to profits of the Company and employees have seen a significant drop in income. Therefore, many employees are leaving the Company. Ravi believes that the problems are temporary in nature and that the Company can be turned around.
Case 3 (contd.) When the Director (Operations) leaves without giving notice, Ravi is asked to take charge of Operations by the Board of Directors. Ravi knows that the key to turning around the Company is to turn around its Mumbai operations. As a Controller, he knows that the region’s contribution to Head Office overheads and profits has been rapidly declining. However, he has several problems on his hand. The Mumbai Operations Head is threatening to leave. If he leaves, it is very likely that the entire Mumbai team will leave with him. Apart from growing business, he also has to cut down costs by shutting down unviable branches in the Mumbai region. He is worried about the impact of such an action on the region and across the country. Ravi wants your help in thinking through his options. Can you help him?
You will be given leadership roles if you develop managerial capabilities Now You Know!
You must develop good communication skills Finally!
The Five Things you now know! <ul><li>The Sector is large and growing rapidly. You should consider seeking opportunities here </li></ul><ul><li>The Sector values your skills </li></ul><ul><li>You will grow if you expand your skill set </li></ul><ul><li>You will be given leadership roles if you develop managerial capabilities </li></ul><ul><li>You must develop good communication capabilities </li></ul>