and present Investment Banking Shashank More 1 F

and present Investment Banking Shashank More 1 F

and present Investment Banking Shashank More 1 F IN F I N G Y A A N S E S S I O N 1 : GYA A N I B D S ES S IO N 1 Structure of an I-bank

Clients Seeking Capital Intermediary Directing / Facilitating the Flow of Capital Investors With Capital INVESTMENT MANAGEMENT PUBLIC COMPANIES (Private Wealth / Asset Management) INVESTMENT BANKING Advisory Financing Groups PRIVATE COMPANIES MERCHANT BANKING

MARKETS INSTITUTIONAL INVESTORS Traditional Private Sales Equity Fund Group Country Teams Debt Product Groups Real Estate Private Equity Fund Industry Teams Equity Product

Groups Infrastructure Fund Trading & Strategy GSS/Prime Brokerage RETAIL INVESTORS SSG Derivatives GLOBAL INVESTMENT RESEARCH GOVERNMENT & AGENCIES Operations, Technology & Finance Human Capital

Management Legal/Management Compliance Controls *Including Services EXECUTIVE OFFICE Chinese Wall F I N G Y A A N S E S S I O N 1 : Source: GS Sumer Internship presentation 2006 I B D GOVERNMENTS & AGENCIES

Work done by IBD Team F I N Relationship Development Acquisition Strategy IPO Advisory Sale Advice Execution of M&A Debt advisory G Y A A N S E S S I O N 1 : I B D

Recent Trend Debt Restructuring to avoid bankruptcy Global Expansion by Firms Structured Products that aid fund raising for deals Participation by Private Equity and VC Firms F I N G Y A A N S E S S I O N 1 : I B D Types of Valuations Market Based (# of shares outstanding * Share Price) Comparables Method (Very common in IPOs) P/E , P/B , EV/EBITDA, EV/EBIT Sum of the Parts Valuation Most often method used in M&A today Cash Flow based Valuations

Used in Manufacturing Industries F I N G Y A A N S E S S I O N 1 : I B D FCF based Valuation EV (Enterprise Value) = Equity Value + Net Debt Net Debt = ST and LT loans Operating Cash Liquid and short term investments F I N G Y A A N S E S S I O N 1 :

I B D Sector Preparation Detailed sector analysis of at least 2 sectors Choose common sectors Imp. points to think over: What has been happening in the sector? Where is the sector headed? FDI norms in the sector. Which stocks in the sector are over valued? Avg P/E Stocks to buy in the sector? Which company should come out with an IPO? What M&A opportunities are there? Evaluative parameters of the sector. E.g. EV/Reserves, ARPU, Avg. cost per seat mile F I N G Y A A N S E S S I O N 1 : I B D

Deal Preparation All the deals of the sector that you are preparing Major historic deals and all recent deals Questions Why did the deal happen? Did it make strategic sense? Value of the deal Transaction multiples Was it over valued? What happened after the deal got executed? F I N G Y A A N S E S S I O N 1 : I B D Key Industry

F I N Infrastructure Real Estate Steel Mining Metals (Aluminum) Banks and Financial Services Automobile Telecom Airlines Spirits Business Retail IT & BPO Services G Y A A N

S E S S I O N 1 : I B D Steel Industry Major Deals Mittal Arcelor Tata Corus Essar Steel acquired a Canadian firm Parameter for Evaluation: EV/Tonne Why did Mittal buy Arcelor? (Image makeover) Did Tata Steel over-pay? What is Tata Steel doing with Corus? Other important issues: How is raw material sourced? F I N G Y A A N S E S S I O N 1 :

I B D Banks & Financial Services Major Deals Nationalization of RBS India: ICICI BOR Deal Events out of the credit crisis BASEL III Norms (How is it better than the previous norms? Should BASEL be made a regulation?) Parameter: Geographical Spread, CASA: Current Account Savings Account, Advances Growth, Gross NPA ratio, Net NPA/Net advances, RWA/Total Assets, Cost / Income Ratio, Cost of Funds, NIM-Net Interest Income/(Average Interest Bearing assets), Capital Adequacy ratio-need to raise capital CARMEL Model F I N G Y A A N S E S S I O N 1 :

I B D Telecom Major Deals Idea Cellular - Spice Hutch Vodafone Unitech-Telenor, Swan- Etisalat NTT Docomo-Tata teleservices Bharti-Zain Deal Parameters: Revenue=Subscribers x ARPU (ARPU is more for Airtel and Vodafone because old post paid urban customers) Revenue = RPM x MOU Spectrum availability (900 Mhz, 1800 MHz) EVA/No. of subscribers Common Questions: After the huge price war, where do you see the industry headed? Details of 3G Spectrum allocation. Was it overpriced? Why did Hutch Sell? What was the value that Vodafone saw? What is tax issue that Vodafone

is facing now? What are the tax hiccups they face with the Indian revenue authorities? Possible mergers is a very relevant question for this sector F I N G Y A A N S E S S I O N 1 : I B D Bharti MTN deal $24-billion cash-and-share swap deal which will have over 200 million subscribers and $20 billion in annual revenues Bharti to buy 49% of MTN for $14 billion MTN, to acquire 33% of Bharti for about $10 billion Merged entity to be the worlds third-largest mobile phone operator by subscribers that would straddle Africa, Asia and the Middle East. South African government keen on dual listing Indian laws do not allow dual listing GDR issues with voting rights may fall under SEBI takeover

code F I N G Y A A N S E S S I O N 1 : I B D Coal and Iron Ore Indian Power and mining companies scouting for raw materials in Australia, Indonesia and South Africa Look at major mines acquired by Indian companies abroad Shift in industry practice from long term contracts to short term contracts Coal India IPO: Multiples, EV/Reserves EV/Resources F I N G Y A A N S E S S I O N

1 : I B D Airlines Major Deals Kingfisher Air Deccan Jet Air Sahara Parameters: Average fuel costs, average yield/passenger, average yield/kg, Passenger Load Factor, Number of Departures, revenue/passenger-km F I N What is the current industry scenario? Further Consolidation? Details regarding Jet & Kingfisher agreement/ Deccan buyback Details of Air Indias sovereign backed debt issue Details regarding changes in the loan structure for airline industry How much impact does fuel prices make on the industry?

G Y A A N S E S S I O N 1 : I B D Others: Oil and Gas: Imperial Energy Corp Plc-ONGC Reliance petroleum Ltd-Reliance Industries Ltd Pharma: Ranbaxy-Daiichi Sankyo, Piramal Abott (Why is pharma the source of many acquisitions?) Auto and auto ancillary: JLR-Tata Motors Infrastructure and Engineering sector Retail (Recent FDI controversies in Retail. Should the 74% cap be raises?) FMCG F I N G Y A A N

S E S S I O N 1 : I B D Primary Market The market for new issue of securities. Primary market issuers are bodies corporate, mostly companies under the Companies Act, 1956. Other bodies corporate are corporations owned pre-dominantly by the Government. The main market for new issuances are Public Issues (IPOs and FPOs), Rights Issues and Private Placements. The main constituents of the primary market are Investors, Issuers, Instruments and intermediaries. F I N G Y A A N S E S S I O N 1 :

I B D Primary Market Investors are in three categories Institutional, HNI and Retail. The main instruments that can be issued are pure equity (ordinary shares), pure debt such as NCDs/long term notes or bonds and convertibles. Convertibles can be debt convertibles such as PCDs/FCDs and equity convertibles such as warrants. The main intermediaries associated with the primary market are merchant bankers, underwriters and brokers. The service providers are bankers, registrars, depository participants, couriers and printers. F I N G Y A A N S E S S I O N 1 : I B D Institutional Investors

Also known as Qualified Institutional Buyers (QIBs) as per regulations Multilateral, Bilateral and Domestic Financial Institutions (MFIs/ DFIs) Foreign Institutional Investors (FIIs) Unregistered Foreign Investors (FDI Investors) Foreign Venture Capital Investors (FVCIs) Domestic Venture Capital Investors (VCs) Domestic Mutual Funds (MFs) Commercial Banks F I N G Y A A N S E S S I O N 1 : I B D Non-Institutional Investors High Networth Investors These are investors who cannot be categorized either as Institutional or Retail Non-banking Financial Companies

Capital Market Intermediaries (other than in issues wherein they are acting in official capacity) Investment companies, trusts, societies and other incorporated bodies Partnership Firms HUFs and Individuals Retail Investors Are those whose application in a public issue does not exceed Rs. 100,000 in value. Any of the above category of investors under the HNI category can be a retail investor if the application size does not exceed the above limit. F I N G Y A A N S E S S I O N 1 : I B D Methods of Raising Funds IPO

Fixed Price Offer also known as 100% retail offer Book Built Offer price discovery through book building FPO and Right Issues Qualified Institutional Placement F I N G Y A A N S E S S I O N 1 : I B D Recent trends in Equity Capital Markets Large number of divestments Near zero fees Standard chartered issued Indias first ever IDR F I N G Y A A N

S E S S I O N 1 : I B D Depository Mechanism Depository - security that represents ownership in a foreign security. Therefore they are negotiable securities in a foreign jurisdiction that represent a companys publicly traded domestic equity. An ADR is an American security that is issued through a public offering in the US which requires SEC registration. A GDR is issued anywhere in the world through a public offer but only through private placement (Rule 144A) in the US. F I N G Y A A N S E S S I O N 1 :

I B D Underwriting Contingent Obligation Underwriting Agreement and Commission SEBI (Underwriters) Rules 1993 Devolvement Tata Motors Rights Issue JM Financial Hindalco Right issue F I N G Y A A N S E S S I O N 1 : I B D Fight for League Tables Major banks are getting mandates at near zero fees to get top spots in the league tables

Evaluation criteria used by companies is 70% based on bid and 30% technical based on the presentation Coal India IPO total bankers fees is expected to be around Rs. 12,000/- to be shared among 5 bankers Bankers expense expected to go upto Rs. 25 crores F I N G Y A A N S E S S I O N 1 : I B D Stages of fund raising VC or seed investment Now even VCs have started to approach I-banks for advisory Evaluate individual more than company PE investment

If company does not wish to list to avoid regulatory compliance IPO To gain visiblity Have to abide by regulatory compliance PE firms can invest as PIPE Delisting Market is undervaluing the firm Change in strategic objectives due to change in control F I N G Y A A N S E S S I O N 1 : I B D Company specific preparation Know as much as possible about the bank you are interviewing Regions and areas of operation

Sector of expertise (This will give you a point of discussion in the ppt and interview) Scale in India Major deals that it has been a part of F I N G Y A A N S E S S I O N 1 : I B D Stock market specific questions Where is the stock market headed? Are Indian companies overvalued? What is the average P/E? Which industries are you bullish on? Which companies would you invest in? Do you have a portfolio? What is your criteria of choosing stocks? F I N

G Y A A N S E S S I O N 1 : I B D Preparation stuff HR Questions Why IBD? Why not Markets / Consulting? Lifestyle management Finance personality you are a fan of Other resources Vault Guides Text Books Corporate Finance, Macroeconomics, Valuation Online News resources Bloomberg http://online.wsj.com/public/page/news-mergers-acquisitions.html http://www.marketwatch.com http://money.cnn.com/news/deals/mergers/dealchart.html

F I N G Y A A N S E S S I O N 1 : I B D Thank You Questions ??? F I N G Y A A N S E S S I O N 1 : I B D

Recently Viewed Presentations

  • Chapter 4 Atomic Structure - Henry County School District

    Chapter 4 Atomic Structure - Henry County School District

    Section 4.1 - Studying Atoms. Democritus believed that all matter consisted of extremely small particles that could not be divided. He called these particles atoms from the Greek word "atomos", which meant indivisible. He thought that there were different types...
  • Viruses/Bacteria/Protists/Fungi

    Viruses/Bacteria/Protists/Fungi

    In protozoa, reproduction is asexual through binary fission, and many algae use fragmentation. Some protists may exchange DNA though conjugation. E. Some protists are pathogenic. Malaria is a disease caused by parasitic protists called plasmodia. Malaria is transmitted by a...
  • SHAPING THE FUTURE OF OUR PROFESSIONS SPRING 2015

    SHAPING THE FUTURE OF OUR PROFESSIONS SPRING 2015

    * APEGA will host Member and Permit Holder consultation sessions in May. There will be one in Calgary, Edmonton, Red Deer and Fort McMurray. These consultations sessions provide Members and Permit Holders an opportunity to dig into some of the...
  • BIA-Hawaii: CSIP

    BIA-Hawaii: CSIP

    Training impact evaluations gauge the effect of the training on workers' ability to participate in safety and health activities in the workplace. Training impact evaluations are typically conducted three to six months after the training and could be conducted by...
  • "Loraine, you are my density"

    "Loraine, you are my density"

    Kristen Hellier Middle School Science Coordinating Teacher, WCPSS [email protected]cpss.net
  • Comparative Judgment as a Novel Approach to Operational

    Comparative Judgment as a Novel Approach to Operational

    A time when i felt free was, when i finally got released from being in the hospital for four days. The reason i was in the hospital was because i had a kidney stones which hurted really bad that i...
  • Spraying Your Rose Garden

    Spraying Your Rose Garden

    More Bayer Advanced Garden Products All-in-One Rose & Flower Care Merit insecticide plus Banner Maxx fungicide 9-14-9 fertilizer Mixed 4 tbsp/quart and used as a drench Bayer Advanced Disease Control Concentrate diluted 1.5 tbsp/gallon to spray Active ingredient same as...
  • Retention - Dr.Rola Shadid

    Retention - Dr.Rola Shadid

    Differences in Clasp Design Differentiation between tooth-supported and tooth-tissue supported partial denture Distortion of tissues over edentulous ridge will be approximately 500 microm under 4 newtons of force, whereas abutment teeth will demonstrate approximately 20 microm of intrusion under the...