Investment banking

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Investment banking

  1. 1. ROLE OF MERCHANT BANKERS - FINANCIAL ENGINEER FOR A BUSINESS INVESTMENT BANKING Investment banking 1 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  2. 2.  Historically, merchant banks' original purpose was to facilitate and/or finance production and trade of commodities, hence the name "merchant". Investment banking 2 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  3. 3. Merchant bank  Financial institution  Capital to companies in the form of share ownership instead of loans.  Advisory on corporate matters.  Investment bank  Combination of Banking and consultancy service. Investment banking 3 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  4. 4. Activities  Issue management  Portfolio management  Credit syndication  Acceptance credit  Counsel on mergers and acquisitions insurance, etc Investment banking 4 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  5. 5.  In short, merchant banking provides a wide range of services for starting until running a business.  It acts as Financial Engineer for a business. Investment banking 5 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  6. 6. Functions of Merchant Banking Investment banking6 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  7. 7. Raising Finance for Clients  Shares, debentures, bank loans, etc.  The domestic and international market.  Starting a new business or project or for modernization or expansion of the business. Investment banking 7 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  8. 8. Broker in Stock Exchange  Act as brokers in the stock exchange.  Buy and sell shares on behalf of their clients.  research on equity shares. They also advise their clients about which shares to buy, when to buy, how much to buy and when to sell.  Large brokers, Mutual Funds, Venture capital companies and Investment Banks offer merchant banking services. Investment banking 8 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  9. 9. Project Management  Location of a project  Project report  Conducting feasibility studies  Making a plan for financing the project,  Finding out sources of finance  Advising about concessions and incentives from the government. Investment banking 9 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  10. 10. Advice on Expansion and Modernization  Advice for expansion and modernization of the business units.  Expert advice on mergers and amalgamations.acquisition and takeovers, diversification of business, foreign collaborations and joint-ventures, technology up gradation, etc. Investment banking 10 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  11. 11. Managing Public Issue of Companies  Advice and manage the public issue of companies.  They provide following services: 1. Timing of the public issue. 2. The size and price of the issue. 3. Acting as manager to the issue, and helping in accepting applications and allotment of securities. 4. Help in appointing underwriters and brokers to the issue. 5. Listing of shares on the stock exchange, etc.Investment banking 11 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  12. 12. Handling Government Consent for Industrial Projects  A businessman has to get government permission for starting of the project.  Similarly, a company requires permission for expansion or modernization activities.  For this, many formalities have to be completed. Merchant banks do all this work for their clients. Investment banking 12 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  13. 13. Special Assistance to Small Companies and Entrepreneurs  Advise small companies about business opportunities, government policies, incentives and concessions available.  It also helps them to take advantage of these opportunities, concessions, etc. Investment banking 13 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  14. 14. Services to Public Sector Units  Merchant banks offer many services to public sector units and public utilities. They help in raising long-term capital, marketing of securities, foreign collaborations and arranging long-term finance from term lending institutions. Investment banking 14 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  15. 15. Revival of Sick Industrial Units  to revive (cure) sick industrial units.  It negotiates with different agencies like banks, term lending institutions, and BIFR (Board for Industrial and Financial Reconstruction).  It also plans and executes the full revival package. Investment banking 15 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  16. 16. Portfolio Management  Manages the portfolios (investments) of its clients.  This makes investments safe, liquid and profitable for the client.  It offers expert guidance to its clients for taking investment decisions. Investment banking 16 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  17. 17. Corporate Restructuring  It includes mergers or acquisitions of existing business units, sale of existing unit or disinvestment.  This requires proper negotiations, preparation of documents and completion of legal formalities.  Merchant bankers offer all these services to their clients. Investment banking 17 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  18. 18. Money Market Operation  It deal with and underwrite short-term money market instruments. Investment banking 18 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  19. 19. Leasing Services  Merchant bankers also help in leasing services.  Lease is a contract between the lessor and lessee, whereby the lessor allows the use of his specific asset such as equipment by the lessee for a certain period.  The lessor charges a fee called rentals. Investment banking 19 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  20. 20. Management of Interest and Dividend  Merchant bankers help their clients in the management of interest on debentures / loans, and dividend on shares.  They also advise their client about the timing (interim / yearly) and rate of dividend Investment banking 20 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  21. 21. Help yourself  http://kalyan-ity.blogspot.com/2011/10/what-is- merchant-banking-meaning.html Investment banking 21 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  22. 22. ROLL NO. MARKS ( OUT OF 12 MARKS) 38 6 25 7 34 7 32 9 9 6 19 2 57 6 26 5 29 2 7 4 12 4 Investment banking22 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
  23. 23. Investment banking23 YOGESH NAMDEO INGLE.MBA (FINANCE), NET (MANAGEMENT), Ph.D (WIP), G.D.C &A, NCMP.
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