Ii B Equity Markets Iiit

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Ii B Equity Markets Iiit

  1. 1. “ It is usually agreed that casinos should in public interest, be inaccessible and expensive. And, perhaps the same is true of Stock Exchanges.” John Maynard Keynes Sunil Mahajan - ISMS
  2. 2. Equities <ul><li>Corporate structure of organisation </li></ul><ul><li>Nature of claims </li></ul><ul><li>Primary and secondary markets </li></ul><ul><li>Valuation of company </li></ul><ul><li>IPO & seasoned offering. Private placement. </li></ul>Sunil Mahajan - ISMS
  3. 3. Financial Markets Sunil Mahajan - ISMS Firms Investors Ram Kapil Secondary Market money securities Stocks and Bonds Money Primary Market
  4. 4. Initial Public Offering <ul><li>Raising finance </li></ul><ul><li>Liquidity for existing investors </li></ul><ul><li>Valuation : M&A. Equity compensation to employees. </li></ul><ul><li>Prestige : marketing, recruitment, funding. </li></ul>Sunil Mahajan - ISMS
  5. 5. Issues in IPO <ul><li>Domestic/ international </li></ul><ul><li>Fresh equity/ Offer for sale </li></ul><ul><li>Pricing </li></ul><ul><li>Post listing performance </li></ul><ul><li>Cashflows vis-a-vis assets </li></ul>Sunil Mahajan - ISMS
  6. 6. Investment Banking <ul><li>Public offering of securities </li></ul><ul><li>Underwriting of securities </li></ul><ul><li>Trading of securities </li></ul><ul><li>Private placement of securities </li></ul><ul><li>Mergers & acquisition </li></ul><ul><li>Money management </li></ul>Sunil Mahajan - ISMS
  7. 7. Rights Issue <ul><li>Issue of shares to existing shareholders </li></ul><ul><li>on a pro rata basis </li></ul><ul><li>Rights ratio. No of shares. Price. Amount. </li></ul><ul><li>Letter of offer </li></ul><ul><li>Rights renunciation </li></ul>Sunil Mahajan - ISMS
  8. 8. Indian Experience <ul><li>Controller of Capital Issues </li></ul><ul><li>Underpricing of shares </li></ul><ul><li>Free pricing. Prices fixed by the company. </li></ul><ul><li>Pricing by the market. </li></ul>Sunil Mahajan - ISMS
  9. 9. Fixed Income Securities <ul><li>Stated future liability of interest & principal </li></ul><ul><li>Tax deductible </li></ul><ul><li>No control or ownership by borrower </li></ul><ul><li>Restrictive covenants </li></ul><ul><li>Promised cashflows in future </li></ul><ul><li>Traded & non traded FIS : significance </li></ul>Sunil Mahajan - ISMS
  10. 10. Features <ul><li>Principal or face value </li></ul><ul><li>Coupon payment </li></ul><ul><li>Maturity </li></ul><ul><li>Security </li></ul><ul><li>Seniority – Subordinate bonds </li></ul><ul><li>Indenture ( Deed of Trust) </li></ul><ul><li>Embedded options </li></ul>Sunil Mahajan - ISMS

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