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DEFINITION
An investment bank is financial institution
which raises capital, trade securities and manages corporate mergers and acquisition
IN SIMPLE
It is a business of rising capital for
companies
capital is required for growth and expansion
of business
Investment bank sell securities to public
ROLE
Issuing and selling securities in primary
market
Assist public,private corporation and
company
Investment bank
investors
INVESTMENT BANK
Investment bank focus on large public and private share offering. Investment bank participate in trade financing activity. Investment banks raise funds for businesses and some governments by registering and issuing debt or equity and selling it on a market.
MERCHANT BANK
Merchant bank tends to operate on small scale co. & offers creative equity financing. Merchant bank often expand in the field of underwriting. Merchant banks primarily perform international financing activities such as foreign corporate investing, foreign real estate investment, trade finance and international transaction facilitation.
Investment banks facilitate mergers & acquisitions through share sales and provide research and financial consulting to companies.
Merchant bank is involved in issuing letters of credit, transferring funds intnly, trade consulting and coinvestment in projects.
BUY SIDE
Pension Fund
Mutual Fund
Hedge Fund
Front office
INVESTMENT BANKING
Investment Banking is the traditional aspect of
RESEARCH
The division which reviews companies and writes
MIDDLE OFFICE
Risk management: Analyzing the market and credit risk. Setting limits on the amount of capital. Ensure that the above mentioned economic risks are captured accurately correctly and on time (typically within 30 minutes
of trade execution).
Corporate treasury:Responsible for an investment bank's funding, capital structure management, and liquidity risk monitoring.
Financial control: Tracks and analyzes the capital flows of the firm. Controlling the firm's global risk exposure and profitability.
Compliance:-
BACK OFFICE
Operations:-
Technology: Information technology department. In-house software, technical support. Technology has changed considerably in the last few years as more sales and trading desks are using electronic trading.
The categories for which merchant banking registration may be granted by SEBI:
Category I : to carry on the activity of issue management and to act as adviser, consultant, manager, underwriter, portfolio manager Category II :to act as adviser, consultant, comanager, underwriter, portfolio manager. Category III :to act as underwriter, adviser or consultant to an issue Category IV :to act only as adviser or consultant to an issue.
J.P. Morgan has a long and successful legacy of investment banking in India. J.P. Morgan was a founding shareholder of one of India's largest financial institutions and also established the country's first international investment bank in 1993 as a joint venture between J.P. Morgan and a leading Indian financial institution. During the balance of payments crisis in 1991, J.P. Morgan played a key role in advising the Reserve Bank of India on liquidity management and facilitated measures to avoid debt rescheduling. J.P. Morgan is currently one of the leading investment banks in India and has a market leading position across the spectrum of services it offers.
Cont...
Implications of FASB Financial Instruments Accounting Standard Update Auditors Likely to Expand Scrutiny of Fair Value Estimates Fair Value Measurement Cost of Capital Debt Exchange Offers: A Refinancing Alternative in Challenging Markets The Credit Crisis
Cont
Underwater Option Exchanges: Meeting Employee, Shareholder and Company Concerns Global IPO Launching green investment bank to fund renewable
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Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives.
The more diversified the currency base less is the forex risk.
For example If a bank is limited to business in the U.S. or Europre for example, it is at greater risk at suffering a loss from an economic downturn.
2010
ChetanSavla, executive director and co-head of equity product group at Kotak Investment Bank, said that firms such as his have the ability to service capital needs of small and large companies alike. There was a time when we were doing five to seven transactions in a year and now we tend to close one transaction every week, he added.
Journey so far
Restructuring Ford & Goldman JVs BANK Life Insurance Stock Old Mutual JV Mutua Broking Ford l Fund Credit Goldma JVs n Sachs JVs
Trade Finance 2006 2001 2003 1985198 1990 1991 1992 1995 1996 1998 In October 2005, Kotak Group acquired the 40% stake in Kotak Prime held by Ford Credit International (FCI) and FCI acquired the stake in Ford Credit Kotak Mahindra 6 (FCKM) held by Kotak Group.
In May 2006, Kotak Group bought 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company and Kotak Securities
ACHIEVEMENT AWARDS
2003 2001
'Kotak Bond Regular Plan' was ranked ICRA-MFR1 and was the recipient of the Silver Award
In the Annual Euromoney Private Banking Survey Poll for 2006,2011 for India, Kotak Mahindra Bank was ranked no. 1 in six categories Topped the Bloomberg India M&A Financial Advisory League table (India announced deals) for the calendar year 2005 Topped the India Advisory Partners Indata League table for the calendar year 2005
Best Broker - Kotak Securities : 2005 Best Equity House in India: 2002,2003,2004,2008,2010,2011
Best Investment Bank in India 2004,2008,2009,2010 IFR Asia's India Equity House Award for the year 2004,2008
Investment Banking
Topped league tables for book running equity offerings for last four years in a row Topped Bloomberg M&A league tables for CY2005
International Subsidiaries Kotak Mahindra (UK) Kotak Mahindra Inc Kotak Mahindra (International)
(Rs mn)
2008
Securities
Indias leading securities brokerage firm
8.5% market share in FY10 (6.3% in FY09) Strong presence in retail and institutional segments
Best Equity House Best Broker 2005, 2010, 2011
2005, 2011
2004
and London Network of 1400 and more offices (own & franchisees) across 435 cities(2011)
Securities
Strong research team
Wide coverage
Institutional research 117 companies Retail research 150 companies Awarded Best Provider of Portfolio Management Equities by Euromoney Private Banking Poll 2006 Over 2,45,000 secondary market customers
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