I have been working on some of my college assignments, and I made this fine report on "Overseas sources of funds for Indian Corporates, and why Corporates lusts for those sources". Please read, review, and give your feedback.
Foreign Institutional Investors (FIIs) play a key role in India's economy and stock market. FIIs include overseas pension funds, mutual funds, and other large financial institutions. They are allowed to invest in India's primary and secondary markets through the Portfolio Investment Scheme administered by the Reserve Bank of India. FIIs have significantly contributed to capital formation and economic growth in India over the past decade, though they also introduce volatility, as large withdrawals can negatively impact markets. Their investments are generally short-term in nature and aimed at portfolio diversification. Strict regulations govern FIIs to ensure foreign money benefits India's economy.
Foreign Institutional Investors (FIIs) have played a significant role in India's economic growth and capital markets. FIIs include overseas pension funds, mutual funds, and other financial institutions. They invest in India's primary and secondary markets through the Portfolio Investment Scheme administered by the Reserve Bank of India. While FIIs bring foreign capital and improve market efficiency, they also introduce volatility, as large and rapid capital outflows can negatively impact markets and inflation. Both the positive and negative effects of FIIs must be balanced to support stable economic development in India.
External / Overseas sources of funds for MNCs by Anshika SinghAnshikaSingh141
MNCs require a lot of external sources of funding for their long term capital requirements.
International fund raising used to be the domain of multinational companies. MNCs not only source raw material across the world or sell products at many geographical regions, they are also scouting for capital all over the world and raise capital where it is cheaper. However with globalization and increased cross-border capital flows, smaller companies are enjoying the benefits of raising capital in the international market.
Here we would like to dwelve deeper into the different sources of funds of finance used by Multinational companies for their working capital and long term capital requirements.
The sources of finance researched are American Depository Receipts, Global Depository Receipts, Samurai bonds and Masala Bonds.
IMAP Financial Services sector Leaders: Jonathan Dalton and Khelan Dattani share insights into the global Financial Services sector. They look at how and why the COVID pandemic affected certain geographies and subsectors more than others and the subsequent impact on deal volumes and valuations. They identify the key areas of growth and common trends driving activity across the globe and examine why the sector is becoming increasingly attractive to PE investors, pinpointing opportunities for buyers and sellers.
This document discusses mutual funds in India. It provides an overview of the mutual fund industry in India, including its origins and growth over time. It also discusses the objectives and role of the Association of Mutual Funds in India (AMFI), which acts as the apex body for mutual funds in the country. The key points covered are:
- The mutual fund industry started in 1963 with the formation of UTI and has grown significantly since market liberalization in the 1990s.
- AMFI was established in 1995 as the main industry association to represent mutual funds and maintain standards and ethics in the sector.
- AMFI aims to promote understanding of mutual funds, recommend best practices, and represent the industry to
The document discusses the growth of India's financial sector. It notes that the financial sector contributes approximately 15% to India's GDP and is the second largest component after trade and transportation. The key components of the financial sector discussed are banking, insurance, capital markets, mutual funds, non-banking financial corporations, and microfinance institutions. The banking sector has seen significant growth and reforms since liberalization in 1991, with increasing deposits, assets, and branch penetration across India. The insurance and capital markets have also grown substantially in recent decades through various reforms and regulations. Overall, India's financial sector has expanded rapidly and provides important services across the country.
The document is a project report on mutual fund comparison and analysis. It includes an executive summary that outlines analyzing past three years of data from different mutual fund schemes using measures like beta, Sharpe ratio, and Treynor ratio. It also includes sections on company profile, industry profile, types of mutual funds, research methodology, findings and analysis, and conclusions. The project aims to compare schemes of different mutual fund companies on performance parameters and analyze aspects of systematic investment plans and rebalancing.
Foreign Institutional Investors (FIIs) play a key role in India's economy and stock market. FIIs include overseas pension funds, mutual funds, and other large financial institutions. They are allowed to invest in India's primary and secondary markets through the Portfolio Investment Scheme administered by the Reserve Bank of India. FIIs have significantly contributed to capital formation and economic growth in India over the past decade, though they also introduce volatility, as large withdrawals can negatively impact markets. Their investments are generally short-term in nature and aimed at portfolio diversification. Strict regulations govern FIIs to ensure foreign money benefits India's economy.
Foreign Institutional Investors (FIIs) have played a significant role in India's economic growth and capital markets. FIIs include overseas pension funds, mutual funds, and other financial institutions. They invest in India's primary and secondary markets through the Portfolio Investment Scheme administered by the Reserve Bank of India. While FIIs bring foreign capital and improve market efficiency, they also introduce volatility, as large and rapid capital outflows can negatively impact markets and inflation. Both the positive and negative effects of FIIs must be balanced to support stable economic development in India.
External / Overseas sources of funds for MNCs by Anshika SinghAnshikaSingh141
MNCs require a lot of external sources of funding for their long term capital requirements.
International fund raising used to be the domain of multinational companies. MNCs not only source raw material across the world or sell products at many geographical regions, they are also scouting for capital all over the world and raise capital where it is cheaper. However with globalization and increased cross-border capital flows, smaller companies are enjoying the benefits of raising capital in the international market.
Here we would like to dwelve deeper into the different sources of funds of finance used by Multinational companies for their working capital and long term capital requirements.
The sources of finance researched are American Depository Receipts, Global Depository Receipts, Samurai bonds and Masala Bonds.
IMAP Financial Services sector Leaders: Jonathan Dalton and Khelan Dattani share insights into the global Financial Services sector. They look at how and why the COVID pandemic affected certain geographies and subsectors more than others and the subsequent impact on deal volumes and valuations. They identify the key areas of growth and common trends driving activity across the globe and examine why the sector is becoming increasingly attractive to PE investors, pinpointing opportunities for buyers and sellers.
This document discusses mutual funds in India. It provides an overview of the mutual fund industry in India, including its origins and growth over time. It also discusses the objectives and role of the Association of Mutual Funds in India (AMFI), which acts as the apex body for mutual funds in the country. The key points covered are:
- The mutual fund industry started in 1963 with the formation of UTI and has grown significantly since market liberalization in the 1990s.
- AMFI was established in 1995 as the main industry association to represent mutual funds and maintain standards and ethics in the sector.
- AMFI aims to promote understanding of mutual funds, recommend best practices, and represent the industry to
The document discusses the growth of India's financial sector. It notes that the financial sector contributes approximately 15% to India's GDP and is the second largest component after trade and transportation. The key components of the financial sector discussed are banking, insurance, capital markets, mutual funds, non-banking financial corporations, and microfinance institutions. The banking sector has seen significant growth and reforms since liberalization in 1991, with increasing deposits, assets, and branch penetration across India. The insurance and capital markets have also grown substantially in recent decades through various reforms and regulations. Overall, India's financial sector has expanded rapidly and provides important services across the country.
The document is a project report on mutual fund comparison and analysis. It includes an executive summary that outlines analyzing past three years of data from different mutual fund schemes using measures like beta, Sharpe ratio, and Treynor ratio. It also includes sections on company profile, industry profile, types of mutual funds, research methodology, findings and analysis, and conclusions. The project aims to compare schemes of different mutual fund companies on performance parameters and analyze aspects of systematic investment plans and rebalancing.
The document provides an introduction to several major stock exchanges around the world, including the National Stock Exchange (NSE) in India, NASDAQ in the United States, Dow Jones in the United States, the Tokyo Stock Exchange in Japan, and the Shanghai Stock Exchange in China. It discusses the founding, ownership, key indices, and major developments of each exchange. The NSE is the largest stock exchange in India and is owned jointly by various financial institutions. NASDAQ is an electronic stock market founded in 1971 and is now owned by NASDAQ OMX Group. Dow Jones includes indices like the Dow Jones Industrial Average and is now jointly owned. The Tokyo Stock Exchange is Japan's largest with over 2,000 listings and key indices like the
Young Chartered Accountants - New Age CAs, A New Age PowerNeha Sharma
The profession of chartered accountants has enrolled a large number of students in last 7 years and accordingly the number of young bright students who are qualifying as chartered accountants has also grown significantly. This is being seen as a major challenge for the entire profession. We perceive this as a major opportunity not only for the profession, the young chartered accountants, and young C.A. students but also for the entire nation - our motherland INDIA.
The document summarizes the historical evolution of mutual funds in India from 1964 to the present. It describes four phases:
1) 1964-1987 when UTI was established and was the sole mutual fund provider.
2) 1987-1993 when public sector banks entered the market and launched their own funds.
3) 1993-2003 when private sector funds like Kothari Pioneer (now Franklin Templeton) were allowed and the number of funds grew to 33 with assets of Rs. 1,21,805 crores.
4) Post-2003 when UTI was bifurcated into a specified undertaking and UTI Mutual Fund Ltd.
A conflict of interest occurs when an individual or organization is involved in multiple interests, and one interest could potentially corrupt their judgment in another. The presence of a conflict of interest does not necessarily mean wrongdoing will occur, but it creates a risk that decisions may be unduly influenced. Some organizations have significant equity stakes in other companies that are worth substantially more than the organization's own market value, representing a hidden or embedded value.
We were born in India and spent our careers investing professionally in the US. Every time we thought about investing in Indian stocks, we worried about corporate governance and shareholder returns. Our answer: INDF. Here is the story of why we like Indian financial companies. For more information and important disclosures, please visit www.indiafinancials.com.
The financial services sector in India has grown significantly in recent years. Mutual fund assets under management have more than doubled since 2007. India now has over 219,000 high net worth individuals with a total wealth of US$ 877 billion as of 2016. The number of high net worth individuals is expected to double by 2020. Several segments within the financial services sector such as asset management, insurance, and capital markets have registered strong growth, reflecting opportunities for further expansion. Growth has been supported by factors such as rising incomes, the financial inclusion drive, and government initiatives.
The Present Situation of Insurance in India and Developments in Private Insur...Praveen Gupta
The last decade has been a slowly unfolding, occasionally frustrating but eventful period for the Indian insurance industry. The dominant theme throughout the 1990s was the liberalization agenda.
Foreign direct investment in indian retail sectornileshsen
The document discusses foreign direct investment in the Indian retail sector. It provides background on India's regulations regarding FDI in retail, which currently allow 100% FDI in cash-and-carry wholesale trading and 51% FDI in single-brand retail, but prohibit FDI in multi-brand retail. The document then defines organized and unorganized retail in India, outlines the entry options foreign players used prior to the FDI policy changes, and examines the government's policies regarding FDI in single-brand retail in more detail.
The document provides an overview of the financial services sector in India. Some key points:
- India's gross national savings as a percentage of GDP stood at 28.9% in 2016, higher than many developed and emerging nations.
- Mutual fund AUM in India has grown at a CAGR of 15.25% between FY07-17, reaching US$328.49 billion in FY18.
- The life insurance market has grown from US$10 billion in FY02 to US$64.64 billion in FY17, while non-life insurance grew from US$2.6 billion to US$19.71 billion over the same period.
1) The document discusses the growth of the Islamic bond (sukuk) market, providing examples of notable sukuk deals from 2003-2006 in the Middle East.
2) It describes various sukuk structures that have been used, including sukuk al-ijara, sukuk al-istisna, and sukuk al-musharakah.
3) Factors that fueled the growth of Islamic bond markets are also summarized, such as the use of "mainstream" Islamic structures and higher demand from investors.
This document summarizes a research paper that examines the investment preferences of foreign institutional investors in companies listed on the Bombay Stock Exchange's Sensex index between 2001-2006. The paper finds:
1) Foreign investors invested more in companies where family shareholdings of promoters were less substantial and public shareholding was higher.
2) Among financial performance variables, share returns and earnings per share were significant factors influencing foreign investment decisions.
3) The paper uses panel data analysis to examine the relationship between foreign institutional investment, ownership structure, and various financial metrics of Sensex companies over time.
REITs -Impact on Hotel Industry Report.Rajan Bhatia
This document discusses the potential impact and benefits of Real Estate Investment Trusts (REITs) for the hotel investment industry in India. Some key points:
- REITs could attract over $200 billion in investment to India's hospitality sector in the next three years and allow investors to invest in hotel properties through a regulated mechanism.
- Hotel REITs would help solve financial challenges for small and medium hotels by providing equity financing and help companies raise capital through public listings on stock exchanges.
- REITs are expected to infuse new life into the hotel and real estate sector by providing benefits like reduced financial risks, investment diversification, regular income, and transparency. However, challenges like complex land title
Rupee, not dollar, is a Risk Capital Fount - Sudhir Sethi, Soumitra Sharma_ID...soumitrasharma
This document summarizes Sudhir Sethi's views on how India can boost risk capital inflows to $200 billion by 2020 through policy changes. Sethi notes that while China attracted over $107 billion in venture capital between 2006-2011 primarily in renminbi, India only attracted $54 billion over the same period, with 95% coming from foreign capital in dollars. He proposes that India should establish incentives to encourage more investments from rupee capital sources like family offices and domestic funds. Specific policies mentioned include structuring the proposed $1 billion India Opportunities Venture Fund as a fund of funds, incentivizing banks and pension/insurance funds to invest in venture capital, and aligning tax treatment of private investments with
The document provides an overview of the financial services sector in India. Some key points:
- Assets under management by India's mutual fund industry have more than doubled since 2007 and reached US$333 billion in 2017.
- Corporate investors account for the largest share (46%) of mutual fund assets, followed by high net worth individuals (28%) and retail investors (23%).
- The life insurance market has grown from US$10 billion in 2002 to US$56 billion in 2016, while the non-life insurance market increased from US$2.6 billion to US$19.7 billion over the same period.
- Equity market turnover on the National Stock Exchange increased significantly in recent years, reaching US
The document provides an overview of the financial services sector in India. Some key points:
- India's gross national savings as a percentage of GDP stood at 28.9% in 2016, higher than many developed and emerging nations.
- India has over 219,000 high net worth individuals with a total wealth of $877 billion as of 2016, and this population is expected to double by 2020.
- Mutual fund assets under management have more than doubled since 2007 and stood at $346 billion as of January 2018, registering a CAGR of 15.25%.
This document provides an overview of ICICI Securities and its history and services. It discusses the history of ICICI group companies including ICICI Bank, ICICI Prudential, ICICI Lombard, ICICI Venture, ICICI Home Finance, and ICICI Securities. It also provides a brief introduction to mutual funds, their types, and regulatory framework in India.
India's financial services sector has experienced robust growth in recent years. Assets under management of mutual funds have more than doubled since FY08, reaching Rs 23.16 trillion (US$ 321 billion) as of February 2019. The number of listed companies on Indian stock exchanges has also risen significantly over the past decade. Within financial services, segments such as life and non-life insurance as well as non-banking financial companies have seen their premiums and public deposits increase substantially on an annual basis. Going forward, continued expansion of distribution networks, rising incomes, and the government's financial inclusion efforts are expected to further accelerate growth across the financial services industry in India.
The financial services sector in India is growing rapidly, driven by several factors. Assets under management for mutual funds have more than doubled since 2008, reaching over US$323 billion, while the life insurance segment has seen significant growth in recent years as well. Non-banking financial companies are also gaining prominence in retail finance. Going forward, continued investment in financial technology, expansion of services to rural areas, and further development of capital markets are expected to help the Indian financial services sector continue its strong growth trajectory.
Unit Trust of India (UTI) was created by the UTI Act passed by the Indian Parliament in 1964. Its main functions are to encourage savings, sell units to investors, convert small savings into industrial finance, and provide investors an opportunity to benefit from India's industrialization. UTI was established in four phases from 1964 to the present, seeing the entry of public sector funds in 1987, private sector funds in 1993, and its bifurcation into two separate entities in 2003.
Overseas sources of finance for Indian corporate Sanika Yadav
The document discusses various overseas sources of finance available to Indian corporations, including international equity markets like ADRs and GDRs, international bond markets like Yankee bonds and Samurai bonds, INR denominated bonds known as Masala bonds, and external commercial borrowings. It provides details on each of these financing options, such as what they are, how they work, their advantages and disadvantages. It also lists some examples of Indian companies that have utilized these overseas financing sources and the trends of issuances over time.
Overseas sources of finance for Indian Corporates AshwathyNair23
Indian companies are increasingly tapping into foreign capital markets to fund growth due to lower international interest rates. Some key sources of overseas finance discussed include:
1. Equity sources like American Depository Receipts (ADRs), which allow Indian companies to issue shares on the U.S. stock exchange, and Global Depository Receipts (GDRs), which operate similarly but on exchanges outside the U.S.
2. Debt sources like Yankee bonds, which are U.S. dollar denominated bonds issued in the U.S. by foreign entities, and Samurai bonds issued in Japan.
3. Masala bonds are rupee denominated bonds issued by Indian entities outside of India. External
With the recent enactments as well as the Regulators spate to deepen and strengthen the bond market in India, the bond market in India is in for a major revamp. Masala bonds, one such instrument has been on the eye of the corporate(s) for enabling a proper bond market regime. My presentation looks intends to bring the corporate bond market into light and also analyses what masala bonds exactly are.
The document provides an introduction to several major stock exchanges around the world, including the National Stock Exchange (NSE) in India, NASDAQ in the United States, Dow Jones in the United States, the Tokyo Stock Exchange in Japan, and the Shanghai Stock Exchange in China. It discusses the founding, ownership, key indices, and major developments of each exchange. The NSE is the largest stock exchange in India and is owned jointly by various financial institutions. NASDAQ is an electronic stock market founded in 1971 and is now owned by NASDAQ OMX Group. Dow Jones includes indices like the Dow Jones Industrial Average and is now jointly owned. The Tokyo Stock Exchange is Japan's largest with over 2,000 listings and key indices like the
Young Chartered Accountants - New Age CAs, A New Age PowerNeha Sharma
The profession of chartered accountants has enrolled a large number of students in last 7 years and accordingly the number of young bright students who are qualifying as chartered accountants has also grown significantly. This is being seen as a major challenge for the entire profession. We perceive this as a major opportunity not only for the profession, the young chartered accountants, and young C.A. students but also for the entire nation - our motherland INDIA.
The document summarizes the historical evolution of mutual funds in India from 1964 to the present. It describes four phases:
1) 1964-1987 when UTI was established and was the sole mutual fund provider.
2) 1987-1993 when public sector banks entered the market and launched their own funds.
3) 1993-2003 when private sector funds like Kothari Pioneer (now Franklin Templeton) were allowed and the number of funds grew to 33 with assets of Rs. 1,21,805 crores.
4) Post-2003 when UTI was bifurcated into a specified undertaking and UTI Mutual Fund Ltd.
A conflict of interest occurs when an individual or organization is involved in multiple interests, and one interest could potentially corrupt their judgment in another. The presence of a conflict of interest does not necessarily mean wrongdoing will occur, but it creates a risk that decisions may be unduly influenced. Some organizations have significant equity stakes in other companies that are worth substantially more than the organization's own market value, representing a hidden or embedded value.
We were born in India and spent our careers investing professionally in the US. Every time we thought about investing in Indian stocks, we worried about corporate governance and shareholder returns. Our answer: INDF. Here is the story of why we like Indian financial companies. For more information and important disclosures, please visit www.indiafinancials.com.
The financial services sector in India has grown significantly in recent years. Mutual fund assets under management have more than doubled since 2007. India now has over 219,000 high net worth individuals with a total wealth of US$ 877 billion as of 2016. The number of high net worth individuals is expected to double by 2020. Several segments within the financial services sector such as asset management, insurance, and capital markets have registered strong growth, reflecting opportunities for further expansion. Growth has been supported by factors such as rising incomes, the financial inclusion drive, and government initiatives.
The Present Situation of Insurance in India and Developments in Private Insur...Praveen Gupta
The last decade has been a slowly unfolding, occasionally frustrating but eventful period for the Indian insurance industry. The dominant theme throughout the 1990s was the liberalization agenda.
Foreign direct investment in indian retail sectornileshsen
The document discusses foreign direct investment in the Indian retail sector. It provides background on India's regulations regarding FDI in retail, which currently allow 100% FDI in cash-and-carry wholesale trading and 51% FDI in single-brand retail, but prohibit FDI in multi-brand retail. The document then defines organized and unorganized retail in India, outlines the entry options foreign players used prior to the FDI policy changes, and examines the government's policies regarding FDI in single-brand retail in more detail.
The document provides an overview of the financial services sector in India. Some key points:
- India's gross national savings as a percentage of GDP stood at 28.9% in 2016, higher than many developed and emerging nations.
- Mutual fund AUM in India has grown at a CAGR of 15.25% between FY07-17, reaching US$328.49 billion in FY18.
- The life insurance market has grown from US$10 billion in FY02 to US$64.64 billion in FY17, while non-life insurance grew from US$2.6 billion to US$19.71 billion over the same period.
1) The document discusses the growth of the Islamic bond (sukuk) market, providing examples of notable sukuk deals from 2003-2006 in the Middle East.
2) It describes various sukuk structures that have been used, including sukuk al-ijara, sukuk al-istisna, and sukuk al-musharakah.
3) Factors that fueled the growth of Islamic bond markets are also summarized, such as the use of "mainstream" Islamic structures and higher demand from investors.
This document summarizes a research paper that examines the investment preferences of foreign institutional investors in companies listed on the Bombay Stock Exchange's Sensex index between 2001-2006. The paper finds:
1) Foreign investors invested more in companies where family shareholdings of promoters were less substantial and public shareholding was higher.
2) Among financial performance variables, share returns and earnings per share were significant factors influencing foreign investment decisions.
3) The paper uses panel data analysis to examine the relationship between foreign institutional investment, ownership structure, and various financial metrics of Sensex companies over time.
REITs -Impact on Hotel Industry Report.Rajan Bhatia
This document discusses the potential impact and benefits of Real Estate Investment Trusts (REITs) for the hotel investment industry in India. Some key points:
- REITs could attract over $200 billion in investment to India's hospitality sector in the next three years and allow investors to invest in hotel properties through a regulated mechanism.
- Hotel REITs would help solve financial challenges for small and medium hotels by providing equity financing and help companies raise capital through public listings on stock exchanges.
- REITs are expected to infuse new life into the hotel and real estate sector by providing benefits like reduced financial risks, investment diversification, regular income, and transparency. However, challenges like complex land title
Rupee, not dollar, is a Risk Capital Fount - Sudhir Sethi, Soumitra Sharma_ID...soumitrasharma
This document summarizes Sudhir Sethi's views on how India can boost risk capital inflows to $200 billion by 2020 through policy changes. Sethi notes that while China attracted over $107 billion in venture capital between 2006-2011 primarily in renminbi, India only attracted $54 billion over the same period, with 95% coming from foreign capital in dollars. He proposes that India should establish incentives to encourage more investments from rupee capital sources like family offices and domestic funds. Specific policies mentioned include structuring the proposed $1 billion India Opportunities Venture Fund as a fund of funds, incentivizing banks and pension/insurance funds to invest in venture capital, and aligning tax treatment of private investments with
The document provides an overview of the financial services sector in India. Some key points:
- Assets under management by India's mutual fund industry have more than doubled since 2007 and reached US$333 billion in 2017.
- Corporate investors account for the largest share (46%) of mutual fund assets, followed by high net worth individuals (28%) and retail investors (23%).
- The life insurance market has grown from US$10 billion in 2002 to US$56 billion in 2016, while the non-life insurance market increased from US$2.6 billion to US$19.7 billion over the same period.
- Equity market turnover on the National Stock Exchange increased significantly in recent years, reaching US
The document provides an overview of the financial services sector in India. Some key points:
- India's gross national savings as a percentage of GDP stood at 28.9% in 2016, higher than many developed and emerging nations.
- India has over 219,000 high net worth individuals with a total wealth of $877 billion as of 2016, and this population is expected to double by 2020.
- Mutual fund assets under management have more than doubled since 2007 and stood at $346 billion as of January 2018, registering a CAGR of 15.25%.
This document provides an overview of ICICI Securities and its history and services. It discusses the history of ICICI group companies including ICICI Bank, ICICI Prudential, ICICI Lombard, ICICI Venture, ICICI Home Finance, and ICICI Securities. It also provides a brief introduction to mutual funds, their types, and regulatory framework in India.
India's financial services sector has experienced robust growth in recent years. Assets under management of mutual funds have more than doubled since FY08, reaching Rs 23.16 trillion (US$ 321 billion) as of February 2019. The number of listed companies on Indian stock exchanges has also risen significantly over the past decade. Within financial services, segments such as life and non-life insurance as well as non-banking financial companies have seen their premiums and public deposits increase substantially on an annual basis. Going forward, continued expansion of distribution networks, rising incomes, and the government's financial inclusion efforts are expected to further accelerate growth across the financial services industry in India.
The financial services sector in India is growing rapidly, driven by several factors. Assets under management for mutual funds have more than doubled since 2008, reaching over US$323 billion, while the life insurance segment has seen significant growth in recent years as well. Non-banking financial companies are also gaining prominence in retail finance. Going forward, continued investment in financial technology, expansion of services to rural areas, and further development of capital markets are expected to help the Indian financial services sector continue its strong growth trajectory.
Unit Trust of India (UTI) was created by the UTI Act passed by the Indian Parliament in 1964. Its main functions are to encourage savings, sell units to investors, convert small savings into industrial finance, and provide investors an opportunity to benefit from India's industrialization. UTI was established in four phases from 1964 to the present, seeing the entry of public sector funds in 1987, private sector funds in 1993, and its bifurcation into two separate entities in 2003.
Overseas sources of finance for Indian corporate Sanika Yadav
The document discusses various overseas sources of finance available to Indian corporations, including international equity markets like ADRs and GDRs, international bond markets like Yankee bonds and Samurai bonds, INR denominated bonds known as Masala bonds, and external commercial borrowings. It provides details on each of these financing options, such as what they are, how they work, their advantages and disadvantages. It also lists some examples of Indian companies that have utilized these overseas financing sources and the trends of issuances over time.
Overseas sources of finance for Indian Corporates AshwathyNair23
Indian companies are increasingly tapping into foreign capital markets to fund growth due to lower international interest rates. Some key sources of overseas finance discussed include:
1. Equity sources like American Depository Receipts (ADRs), which allow Indian companies to issue shares on the U.S. stock exchange, and Global Depository Receipts (GDRs), which operate similarly but on exchanges outside the U.S.
2. Debt sources like Yankee bonds, which are U.S. dollar denominated bonds issued in the U.S. by foreign entities, and Samurai bonds issued in Japan.
3. Masala bonds are rupee denominated bonds issued by Indian entities outside of India. External
With the recent enactments as well as the Regulators spate to deepen and strengthen the bond market in India, the bond market in India is in for a major revamp. Masala bonds, one such instrument has been on the eye of the corporate(s) for enabling a proper bond market regime. My presentation looks intends to bring the corporate bond market into light and also analyses what masala bonds exactly are.
Overseas Fund required by Indian Corporate FarazNaqvi12
Indian corporations have several options for raising overseas finance through international financial markets. These include equity financing through instruments like American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), which allow Indian companies to issue shares and raise capital in foreign markets. Debt financing options include Yankee bonds which are dollar-denominated bonds issued in the US, Samurai bonds which are yen-denominated bonds issued in Japan, and Masala bonds which are rupee-denominated bonds issued overseas. Corporations can also take foreign currency loans or use External Commercial Borrowings (ECBs) to raise funds in foreign currencies.
Indian companies have several options for raising overseas finance through international capital markets. These include American Depository Receipts (ADRs), which allow Indian companies to issue shares and raise capital in the US market. Similarly, Global Depository Receipts (GDRs) allow companies to issue shares and raise funds in international markets like Europe. Indian companies can also take on debt financing through various bonds issued overseas such as Yankee bonds (US dollar bonds), Samurai bonds (Yen bonds), and Masala bonds (Rupee bonds issued abroad). Other options for overseas debt financing include foreign currency loans and external commercial borrowings regulated by the Reserve Bank of India.
Review of overseas sources of finance for indian corporateRajivRoy28
Rajiv Roy wrote a review of overseas sources of finance for Indian corporations. He discussed various equity sources such as American Depository Receipts (ADR), Global Depository Receipts (GDR), and debt sources including foreign currency loans. India's external debt in March 2020 was $558.5 billion, dominated by long-term borrowings. Prudent management of external debt is important for macroeconomic stability. International finance exists due to economic interdependence between nations and allows for international borrowing and lending.
Source of finance /uses/ reasons for its ups and downskamalsinha6
The document discusses various sources of finance including American Depository Receipts (ADR), Global Depository Receipts (GDR), Yankee bonds, Samurai bonds, Masala bonds, and External Commercial Borrowings. ADRs and GDRs allow foreign companies to issue shares on American and international exchanges. Yankee, Samurai, and Masala bonds are bonds issued by foreign entities in US, Japanese, and Indian markets respectively. External Commercial Borrowings provide loans to Indian companies from foreign lenders. The sources of finance are used to raise capital, diversify investor bases, and take advantage of foreign interest rates. Their usage can rise and fall based on factors like currency volatility, interest rate environments, and
This presentation describes what are masala bonnds, benefits of these bonds, issuance of masala bonds, companies who issued and planing to issue masala bonds and Factors at play,
The document provides an overview of the global securities industry. It discusses various trade associations that represent the industry in different regions. In India, SEBI and RBI regulate the stock markets, which have grown significantly in terms of participation and governance over the past two decades. The US financial crisis of 2008 led to the collapse of investment banks like Lehman Brothers and the government bailout of the banking industry. Edelweiss is one of India's leading financial services groups operating across over 40 lines of business, with a focus on credit, capital markets, asset management, and life insurance.
Mutual funds pool money from investors and invest it in stocks, bonds, and other securities to generate returns. In India, mutual funds are regulated by SEBI and managed by asset management companies. Some of the largest mutual fund companies in India include Reliance Mutual Fund, HDFC Mutual Fund, ICICI Prudential Mutual Fund, and SBI Mutual Fund. Mutual funds offer investors benefits like diversification, professional management, and lower costs.
A depository receipt (DR) represents shares of a foreign company that are held in trust by a local custodian bank and traded on a local stock exchange. There are several types of DRs including American Depository Receipts (ADRs), Global Depository Receipts (GDRs), and Indian Depository Receipts (IDRs). DRs allow foreign companies to raise capital and list their shares indirectly on foreign exchanges to avoid stringent listing requirements.
Indian companies are increasingly raising funds from overseas sources such as foreign banks, multilateral institutions, and international capital markets. There are multiple sources of overseas finance for Indian corporates including equity instruments like American Depository Receipts (ADRs) and Global Depository Receipts (GDRs), as well as debt instruments denominated in foreign currencies like US dollar-denominated Yankee bonds and Japanese yen-denominated Samurai bonds. While overseas financing provides benefits like lower interest rates, it also exposes companies to risks related to foreign exchange rates and the economic conditions in other countries. Strict regulations apply to overseas bond issuances to protect investors.
Review of Overseas Sources of Finance for Indian CorporateNikitaTiloomalani
This document discusses two main overseas sources of finance for Indian corporations: American Depository Receipts (ADRs) and Global Depository Receipts (GDRs). It explains that ADRs allow Indian companies to raise funds on the US stock exchange by issuing shares that trade similarly to US stocks. GDRs function similarly but allow companies to access international capital markets. The document provides details on the procedures for issuing and trading both ADRs and GDRs, and how they allow foreign investors to invest in Indian companies.
This document discusses various sources of overseas finance for Indian corporates, including American Depository Receipts (ADRs), Global Depository Receipts (GDRs), Samurai bonds, Yankee bonds, Masala bonds, and External Commercial Borrowings (ECBs). ADRs allow US investors to purchase stock in foreign companies, while GDRs represent shares in a foreign company that can be traded in multiple markets. Samurai bonds are yen-denominated bonds issued in Japan, and Yankee bonds are US dollar-denominated bonds issued in the US. Masala bonds are rupee-denominated bonds issued overseas. ECBs allow Indian companies to raise money abroad in foreign currency under
The document discusses the transition to dematerialized shareholding and scripless trading in India. It notes that while scrip-based trading is still needed, small investors will have to get used to the scripless system used in western markets. Their physical share certificates will have to be dematerialized if they want to sell. The document also provides an overview of Indiabulls Financial Services, describing its history, operations, leadership, shareholders, and financial performance.
Foreign institutional investors (FIIs) play an important role in the development of the Indian economy. FIIs invest large amounts of capital in Indian stock markets, which enhances equity capital flows and financial development. However, large FII inflows can also lead to inflation, currency appreciation that hurts exports, and volatility from "hot money" that moves in and out of the country quickly. While FIIs have improved stock market infrastructure and corporate governance, they also have significant influence over stock prices that can disadvantage small retail investors. Regulations have been established to manage FII investment in India.
Depository receipts represent ownership of shares in a foreign company that are held in trust by a domestic bank. There are three main types: American Depository Receipts (ADRs), which are issued and traded in the US; Global Depository Receipts (GDRs), which are issued and traded elsewhere; and Indian Depository Receipts (IDRs), which allow foreign companies to raise capital from the Indian market. ADRs/GDRs provide foreign companies access to international investors and capital markets. There are different levels of ADRs with increasing regulatory requirements associated with higher levels that provide greater visibility and trading opportunities in US markets. IDRs similarly allow Indian investors to invest in foreign companies.
Project on Forign Institutional Investors Secondary DataRuchita Iyer
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- FIIs bring both benefits like improved market breadth/depth and risks like increased speculation. Strict regulations govern FII investment, registration, and ongoing compliance.
This document summarizes the internationalization of ICICI Bank's business, particularly its growth in the foreign remittance business. It discusses how ICICI Bank grew to become the largest private sector bank in India with a global footprint, despite having fewer international branches than other Indian banks. The document examines ICICI Bank's strategies for entering the international remittance market, including leveraging technology to reach customers without a physical presence and partnering with international players. It provides context on the global remittance market and Indian banking industry.
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Overseas sources of finance for indian corporates
1. Overseas Sources of Finance
for
Indian Corporates
Made By:
Abdul Basit Momin
MBA IB
Amity Business School, Mumbai
2. INDEX
IFM ASSIGNMENT 3
2
INTRODUCTION – INTERNATIONAL SOURCES OF
FINANCE
DIFFERENT SOURCES
FACTORS TO CONSIDER FOR OPTIMAL OVERSEAS
FINANCING
CONCLUSION - REASONS FOR CORPORATE’S LUSTS
FOR OVERSEAS FINANCE.
3. International Financing is also known as International Macroeconomics as it deals with finance on a global
level. There are various sources for organizations to raise funds. To raise funds internationally is one of them. With
economies and the operations of the business organizations going global, Indian companies have an access to funds in
the global capital market. International finance helps organizations engage in cross-border transactions with foreign
business partners, such as customers, investors, suppliers and lenders.
INTRODUCTION
INTERNATIONAL SOURCES OF FINANCE
IFM ASSIGNMENT 3
3
4. FACTORS TO CONSIDER FOR
OPTIMAL OVERSEAS FINANCING
IFM ASSIGNMENT 3
4
33.3
%
CROSS BORDER
ACQUISITION
33.3
%
UNDERTAKING NEW
PROJECTS
33.3
%
FUNDING FOREIGN JOINT
VENTURES SUBSIDIARIES
• TAXATION
• DEBT-EQUITY RATIO
• FUNDING STABILITY
• FUNDING DIVERSIFACTION
• CURRENCY
• INTEREST RATE
• MATURITY
• RELATED COSTS
• REGULATION
• NEGOTIATION
• CAPITAL MARKETS
DEVELOPMENT
5. American Depository Receipts (ADR’s)
This a tool often used for international financing. As the name suggests, depository receipts issued by a company in
the USA are known as American Depository Receipts. ADRs can be bought and sold in American markets like regular stocks.
It is similar to a GDR except that it can be issued only to American citizens and can be listed and traded on a stock
exchange of the United States of America.
American Depository Receipts are a way of trading non-U.S. stocks on the U.S. exchange. Through ADRs, Indian
companies who are willing to raise funds from the U.S. can do so by issuing shares on American Stock exchange. However,
the issuance of ADR is governed by the rules and regulations as laid down by the regulator SEC. The Indian Companies will
have to maintain accounts as per the American Standards.
The Indian companies cannot directly list their equity shares on the international stock exchange. So in order to
overcome this problem; the companies give shares to an American bank. These American banks in return for those shares
provide receipts to the Indian companies. The companies raise funds by providing those ADR receipts in American share
market.
DIFFERENT SOURCES
EQUITY
IFM ASSIGNMENT 3
5
6. Global Depository Receipts (GDR’s)
In the Indian context, a GDR is an instrument issued abroad by an Indian company to raise funds in some foreign
currency and is listed and traded on a foreign stock exchange. A holder of GDR can at any time convert it into the number of
shares it represents. The holders of GDRs do not carry any voting rights but only dividends and capital appreciation. Many
renowned Indian companies such as Infosys, Reliance, Wipro, and ICICI have raised money through issue of GDRs.
GDRs are similar to ADRs except the fact that it is listed on an exchange outside the U.S. and helps the issuer to
raise funds simultaneously in different markets i.e. it allows the foreign firms to trade on the exchange outside its home
country.
DIFFERENT SOURCES
EQUITY
IFM ASSIGNMENT 3
6
7. ADR and GDR
RISE AND FALL
IFM ASSIGNMENT 3
7
Many Indian corporates, too, have followed this route of tapping the global market via global depository receipts (GDRs) and
American depository receipts (ADRs), since 1993. Issuing of ADRs by companies such as Infosys in NASDAQ or VSNL in
the New York Stock Exchange (NYSE) in and around 1999 or 2000 had attracted widespread attention.
Of course, not all the DRs were floated in NASDAQ or NYSE. In fact, given the stringent listing in the American stock
exchange, in terms of both number and amount issued, the Luxembourg stock exchange emerged as the most preferred
destination for DRs issued by Indian corporates.
While the DRs seem to have played a definitive role with regard to accentuating integration of the Indian financial markets
with global counterparts, they appear to now be past their prime.
While international investors continue to look for global avenues for portfolio diversification something that the DRs issued by
Indian companies tapped into during the period preceding the global financial crisis the Indian corporations’ appetite for DR
issuances seems to have ebbed in more recent years. So much so, that no new ADRs or GDRs were issued by Indian
companies in 2016-17 and 2017-18.
Then, in 2018-19, ADR/GDR issuances rose to the tune of $1.8 billion. What explains this sudden increase?
As per data revealed by the Bank of New York Mellon global DR directory, while no GDR/ADR has been issued by an Indian
company in any of the stock exchanges across the world in 2019, only three DRs have been issued in 2018. These pertained to
GDRs issued by DishTV and Tube Investments at the London Stock Exchange. Further, the 2018 GDR issues were outcome of
corporate restructuring activities of these firms.
8. ADR and GDR
IFM ASSIGNMENT 3
8
On 2-1-2019, SEBI banned Sanraa Media companies for manipulating share prices using GDRs. In 2017, SEBI barred 19 domestic
and foreign firms from securities markets in India for manipulation in issuances of GDR and warned several others including foreign
institutional investors (FIIs). SEBI imposed a ten year ban on K Sera Sera Ltd. and Asahi Infrastructure and Projects Ltd., which
figured among the six companies whose GDR issuances were manipulated to gain undue advantage, while at least 26 entities
including European American Investment Bank AG (Euram) have been warned that all their future dealings in Indian markets should
be strictly as per regulations.
SEBI has also widened its probe into suspected misuse of GDRs for routing black money back to India and is investigating the role of
over 50 individuals and companies. SEBI in its initial investigation has found large scale misuse of GDRs for suspected illicit funds
stashed abroad to bring back to India. Rounding tripping of funds has been a major route for laundering black money.
As per Credit Rating Information Services of India Limited (Crisil) data, of the 40 global GDRs issued by Indian companies in 2010,
investors have lost money in 85% of the issues, with four out of five issues giving a negative return of 35% or more. The number of
GDRs slowed in 2011 and only 12 Indian companies raised Rs 940 crores ($0.2 billion) through GDRs as compared to 34 companies
that raised Rs 4510 crores ($1.0 billion) during the corresponding period in 2010. In 2012-2013, not a single Indian company opted for
equity offerings; on the other hand, 29 firms raised Rs 60,534 crores by selling bonds overseas.
Although IDRs were first introduced in 2000, the Indian securities market saw its first IDR issue from Standard Chartered in May
2010. This IDR was listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
The reason for the lack of interest in the IDR market includes (a) lack of fungibility; (b) stringent eligibility criteria; (c) lack of clarity
on the issue of taxation; (d) lack of advertising; and (e) concern over the stipulation of allocating 50% of an IDR issue to retail
investors.
SEBI’s ongoing investigations with allegations of GDR misuse have deterred companies from adopting GDR route which might
seemed to have plagued with various abnormalities in the market. IDR is not the most favored route for foreign companies as till date
only one company has issued it thus creating an urge for need of a better alternative in the market.
10. Yankee Bonds
A Yankee bond is a debt obligation denominated in U.S. dollars that is publicly issued in the U.S. by foreign banks
and corporation, and sometimes even governments. Yankee bonds are subject to U.S. securities laws, as they trade on U.S.
exchanges. Yankee bonds offer the issuer to chance to get cheaper financing and reach a broader investment audience; they
offer investors the chance for better yields. On the downside, Yankee bonds can take a long time to come to market, subjecting
them to interest rate risk; they are also vulnerable to currency risk and other problems in their home country's economy.
Around 6 companies have issued Yankee bonds. Reliance Industries Ltd. (RIL) was the first company to issue a Yankee bond
in 1996. Yankee Bond issue in 1997 made news by being the first company from India with successful flotation of $100
million 100-year Yankee bond followed by a second issue of $214 million for a period of 30 years. Issuance of 100year
Yankee Bond created ripple in Indian economy. The Yankee bonds are due for redemption on 6 Aug 2046 and have call
options for 30 years due on 6 Aug 2026. The coupon rate has been fixed at 10.5%. Lead manager of the US$100m issue is
Merrill Lynch. Proceeds of the bond issue will be used for the import of capital equipment by Reliance.
DIFFERENT SOURCES
DEBT - FX
IFM ASSIGNMENT 3
10
13. Samurai Bonds
Samurai bonds are issued in Japan by foreign companies, denominated in yen, and subject to Japanese regulations.
Companies might issue bonds in yen to capitalize on low Japanese interest rates, or to gain exposure to Japanese markets and
investors. Risks associated with raising capital in Japanese yen can often be mitigated with cross currency swaps and currency
forwards. Shogun bonds, like Samurai bonds, are bonds issued in Japan by foreign firms, but unlike Samurai bonds are
denominated in non-yen currencies.
Required Standards:
The eligibility criteria for issuing Samurai bonds were not loosened until April 1985.When examining applications from
potential samurai issuers, the Ministry of Finance considered the tendency of the Japanese capital account balance and the
liquidity in the country’s economy. For the actual issuance of Samurai bonds, the Japanese Ministry of Finance set a quota per
quarter year, and employed a queue system. Borrowers, if they agreed upon the terms of underwriting, entered the quota by
rotation from the top of the queue. In 1998, the Ministry of Finance’s close regulatory control was annulled.
DIFFERENT SOURCES
DEBT - FX
IFM ASSIGNMENT 3
13
16. Masala Bonds
Masala Bonds are rupee denominated borrowings issued by Indian entities in overseas markets. Masala means spices
and the term was used by International Finance Corporation (IFC) to popularize the culture and cuisine of India on foreign
platforms. Masala Bonds were introduced in 2014. The IFC issued the first masala bonds in India to fund infrastructure
projects. Indian entities or companies issue masala bonds outside India to raise money. These bonds are issued in Indian
currency rather than local currency. If the rupee falls, the investor will be bearing the losses.
Some of the prohibited use of Masala Bonds are:
❖ Real estate activities other than development of housing projects.
❖ Investing in capital market.
❖ Activities prohibited as per the Foreign Direct Investment (FDI) guidelines.
❖ Purchase of land.
Who can invest in Masala Bonds?
Foreign investors who want to take exposure to Indian assets and are constrained from doing it directly in the Indian market or
prefer to do so from their offshore locations can invest in Masala bonds. HDFC, NTPC and India bulls Housing are among
Indian corporates which have raised funds via this option. The subscriber of these bonds can sell rupee bonds to a third party
but the proceeds from the issue can’t be used for real estate activities or capital market investment. However, the proceeds
from these bonds can be utilized for development of integrated township/affordable housing project or any other
infrastructural development project.
DIFFERENT SOURCES
DEBT - INX
IFM ASSIGNMENT 3
16
17. MASALA BONDS
TRENDS AND OUTLOOK
IFM ASSIGNMENT 3
17
Masala Bonds have been adopted by a variety of issuers. The types of issuers who have accessed funding via Masala
Bonds from the international debt capital markets include corporates, quasi-sovereign entities such as the National Highways
Authority of India and state level entities such as the Kerala Infrastructure Investment Fund Board. Factors such as a shortfall
in supply of credit onshore and a trend towards diversification of funding sources by borrowers in India are expected to
encourage more issuers to access the international fixed income markets in this manner. Issuances would also be encouraged
by increased investor appetite for better yields from the emerging markets. At the time of writing this article, more than 50
issuances of Masala Bonds have taken place raising more than USD5 billion1 (INR equivalent) from the international debt
capital markets.
With the Government of India acting to ease the liquidity shortage in India, it is expected that the requirements for
ECBs would be further liberalized. It is expected that Masala Bonds will remain attractive for investors seeking an opportunity
to participate in one of the fastest growing economies.
18. External Commercial Borrowings (ECB) refers to the debt shouldered by an eligible entity in India for solely
commercial purposes, that has been extended by external sources, i.e. from any recognized entity outside India. These
borrowings are expected to conform to norms and conditions put forth by the RBI.
ECBs have proven to be instruments that greatly aid Indian firms and organizations in their efforts to raise funds
from beyond India's borders, especially with regard to bringing in fresh investments. One might recognize that structures
similar to ECBs include those of Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency Exchangeable Bonds
(FCEBs). It is vital to note that while the main purpose underlying the issuance of FCCBs is the raising of capital, ECBs are
more expansively applicable; within the latter's ambit lies commercial loans that can include securitized instruments, bank
loans, suppliers' credit, buyers' credit, and bonds. The minimum maturity period of the aforementioned instruments is, on
average, three years
DIFFERENT SOURCES
EXTERNAL COMMERCIAL BORROWINGS
IFM ASSIGNMENT 3
18
20. Indian companies need money and they
are exploring every avenue at home and
abroad to find it. In addition to it Indian
government has eased its policy on
external borrowings. Therefore for the
past few years raising funds overseas has
become increasingly attractive because of
the lower cost, greater flexibility, speed
and depth that international financial
markets offer.
CONCLUSION
• LOW INTEREST RATES
• IPO’S HAVE TURNED TOO RISKY
• DIVERSIFICATION OF DEBT INSTRUMENTS
• SURGING OVERSEAS EQUITY ISSUES
• BUOYANT DEMAND
• REGULATORY LOOSENING
• INNOVATIVE INSTRUMENTS
• EXCHANGE-RATE RISK TOLERANCE
• THE SEARCH FOR ALPHA
• PERSISTING CONSTRAINTS
• FUTURE TRENDS
REASONS FOR CORPORATE’S LUSTS
FOR
OVERSEAS FINANCE