FINANCE ELECTIVES

SEM III
FINANCIAL INSTITUTIONS, MARKETS & SERVICES
Objectives:
The objective of the course is to provide a comprehensive understanding of the nature and economic
functions of the several types of financial institutions that are present in the market. It is expected that
students will develop critical skills in assessing the relevance of the principles of finance and financial
intermediation to real world situations, and to better understand the role that financial markets play in the
business environment that they will face in the future. The focus will be on the description of Indian
financial markets, institutions, instruments and services.
Contents:
1.Financial System: Structure and Role, Significance of Banking and Financial Institutions, Structure of
the Financial System Banks and Other Financial Institutions, Financial Innovation Function of
Financial Markets, Overview of Structure of Financial Debt and Equity Markets Primary and Secondary
Markets Exchanges and Over-the-Counter Markets, Money and Capital Markets Internationalization of
Financial Markets
2.Banking Institutions: Institutional structure in India, Commercial banks, Cooperative banks, Private
sector banks, Banking Regulations, Implication for the economy, Asset Management by Banks, The Bank
Balance Sheet, Liquidity Management and the Role of Reserves, Asset Management, Liability
Management, Capital Adequacy Management, Fund based and non-fund based/fee-based services.
3.Non-Bank Financial Intermediaries: Institutional structure in India, Types and comparison of asset
liability structures of various NBFCs, Lease finance, Hire Purchase, Housing Finance, Venture Capital
funds, Money Market Mutual Funds, Hedge Funds, Insurance companies, Infrastructure Finance
Companies.
4.Money Market: Money and Call Money Market, Institutions constituents, Regulations, Role and
Functions, Issues in India, The Money Markets, The Discount Market, The Parallel Markets, The
Interbank Market, The Market for Certificates of Deposit, The Commercial Paper Market, The Local
Authority Market, Repurchase Agreements, Monetary Policy and the Money Markets.
5. Capital Market: The Importance of Capital Markets, Characteristics of Bonds and Equities, Bonds,
Equities, The Trading of Bonds and Equities, Bonds: Supply, Demand and Price, Equities: Supply,
Demand and Price, The Behaviour of Security Prices, Hybrid Securities- Preference Shares, Convertible
Debentures, Non-convertible Debentures (NCDs) Partially Convertible debentures (PCDs), Fully
Convertible Debentures (FCDs), Warrants, Debt with Call and Put Options.
6.Central Bank as a Financial Regulatory Authority: Reserve Bank , Reserve Bank of India as a Regulator
and Financial Stability Authority, Banking sector regulations Basel I ,II and III Norms-Early Warning
Signals of Credit Deterioration and Failure in banks, The co-ordination between the financial sector
regulators like SEBI,IRDA,PFRDA and the Reserve Bank of India

Revised by Dr.AG in August 2013

Recommmended Books:
Text:
1. Khan, M.Y. Financial Services. Tata Mcgraw-Hill Publishing Company Limited. New Delhi.
2004, PP.350
2. Machiraju ,H.R. Indian Financial System. Delhi. Vikas Publishing House Pvt.
Ltd.2002.Pp.Xxii,501
3. Pandian, P. Financial Services And Markets. Noida. Vikas Publishing House Pvt.
Ltd.2009,Pp.Xiii, 41
4. Tripathy, N.P. Financial Services. New Delhi. Prentice-Hall of India Private
Limited.2008,Pp.Xv, 331
5. Desai, V. Indian Financial System. Mumbai. Himalaya Publishing House.2001,Pp.690
Reference
1. Paul, J. Suresh, P. Management of Banking And Financial Services. New Delhi. Pearson
Education Pvt.Ltd.2007,Pp.Xxv, 658
2. Seethapathi, K. Rao, T.S.R.K Financial Services: Evolution of Financial Services, Leasing.
Hyderabad. Icfai University Press.2004,Pp.Vii, 199
3. Bhalla, V.K. Management of Financial Services. New Delhi. Anmol Publications Pvt.
Ltd.2007,Pp.Xx, 916
4. Batra, G.S .Financial Services And Markets. Rajouri. Deep & Deep Publications.2002,Pp.X,
269Texts Books
5. Fabozzi, Frank, Modigliani, Franco, Jones, Frank (Feb 2009), Foundations of Financial Markets
and Institutions, International Edition, 4th Edition, Pearson Higher Education.
6. Eakins, Stanley G. (2005), Financial Markets and Institutions (5th Edition), Addison Wesley.
7. Howells, Peter, Bain, Keith (2007), Financial Markets and Institutions, 5th Edition.
8. Madura, Jeff (2008), Financial Markets and Institutions, 8th edition, Thomson Publications.
9. Kidwell, David, Blackwell, David W., Whidbee, David A. et.al. (2008) Financial Institutions,
Markets, and Money, 10th Ed., John Wiley & sons.
10. Bhasin, N. Indian Financial System :Reforms, Policies And Prospects .New Delhi. New Century
Publications.2004,Pp.Xi, 228
11. Pathak, B.V .Indian Financial System. New Delhi. Pearson Education Asia.2003,Pp.Xiii, 592
12. Khan, M.Y. Indian Financial System. New Delhi. Tata Mcgraw-Hill Publishing Company
Limited.2003,Xvi, 500
13. Bhole, L.M. Financial Institutions And Markets: Structure, Growth And Innovations-

4th Edn. New Delhi/Tata Mcgraw-Hill Publishing Company Limited/2004

14. Mahakud, J./Bhole, L.M. Financial Institutions And Markets :Structure, Growth And
15.

16.
17.
18.

Innovations- 5th Edn. New Delhi/Tata Mcgraw Hill Education Private Limited/2010
Saunders, A./Cornett, M.M. Financial Markets And Institutions: An Introduction To
The Risk Management Approach 3rd Edn. New Delhi/Tata Mcgraw-Hill Publishing
Company Limited/2009
Venkatesh, T.R. Indian Financial Markets: An Introduction Hyderabad/Icfai University
Press/2006
Bhalla, V.K. International Financial Markets New Delhi/Anmol Publications Pvt.
Ltd./2010
Haan, J.D./Oosterloo, S./Schoenmaker, D. European Financial Markets And
Institutions New Delhi/Cambridge University Press/2009

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19. India's Financial Markets: An Insider's Guide To How The Markets Work Shah,

A./Thomas, S./Gorham, M. New Delhi/Elsevier India Pvt.Ltd./2009

20. Gupta, N.K./Chopra M. Financial Markets, Institutions & Services, New Delhi/Ane

Books India/2008
21. Gurusamy, S. Financial Markets And Institutions Australia/Thomson Learning, Vijay

Nicole Imprints Pvt. Ltd./2004

22. Goel, Sandeep. Financial Services Delhi/Phi Learning Private Limited/2012
23. Kothari, R. Financial Services In India: Concept And Application New Delhi/Sage

Publications India Pvt. Ltd./2010

24. Mohan, S./Elangovan, R. Financial Services By New Delhi/Deep & Deep

Publications/2008
25. Paul, J./Suresh, P Management Of Banking And Financial Services. New

Delhi/Pearson Education Pvt.Ltd./2007

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MANAGEMENT CONTROL SYSTEM

Context:
An understanding of decision and control subsystem of the organisation is necessary for any Finance
professional. These systems receive information primarily from the operating subsystem. A substantial
part of this information looks at the operations from the point of view of costs and benefits and is used for
decisions aimed at maintaining and improving the effectiveness of operations.
Objectives:
This course examines the various techniques used by managers to ensure that the decisions behavior of
people in an organization is consistent with the organizations goals and strategies. course focuses on
formal planning and budget processes, incentive systems, internal control systems, balanced scorecard
and behavior problems associated with financial results control.
On completion of this course the student will be able to:
Learn to think big and be partners at the senior level as well as junior levels in organizations;
Understand the various newer tools as traditional tools have by no means become redundant
Intelligently understand the workings of any organization, adapt themselves to it, and quickly start
contributing to its development to reach the highest levels of achievement
Outlines:
1. The Newer Paradigms of Management Controls-Meaning, Nature and Significance of Control Systems,
Four Paradigms of Control, Early Warning Systems and Balanced Score Cards, Twelve Commandments
of Control Design
2. Balancing the Tensions in Control Systems, Six Sources of Tensions in Control Systems, Goal
Congruence, Key Controllable Variables
3.The Traditional instruments of Controls in organizations, External Audit, internal Controls and Internal
Audit, MSM , Accountability in organizations, Responsibility Centers, ABC Costing, Kaizan, Learning
Curve
4. Profit Centers, Transfer Pricing, Investment Centers and Long Term Accountability EVA,
compensation and Incentives, Empirical Psychological Findings in Hierarchical Controls, Three
Generations of KM
5. Controls in the Financial Sector, Service Industry, Project Management, NGOs and small businesses,
government and cooperatives in business
6. Comprehensive Cases, Designing Control System: A Tool Kit, Common Errors to beavoided.

Revised by Dr.AG in August 2013

Recommended Books:
Text
1. Sekhar, R C Management Control Systems-Text and Cases, TATA McGraw-Hill Publishing
Company Limited New Delhi
2. Robert N Anthony & Vijay Govindarajan Management Control Systems; from TAT A McGrawHill Publishing Company Limited New Delhi
3. Merchant, K.A. Modern Management Control Systems: Text & Cases. New Delhi. Pearson
Education Asia. 2002.
4. Pherwani, G. Management Control Systems .Mumbai. Himalaya Publishing House.2000.
5. Dutta, A. Management Control Systems:Text and Cases Ahmedabad/Jaico Publishing
House/2011
Reference
1. Aurora, R.S./Kale, S.R Management Control Systems Ahmedabad/Jaico Publishing House/2011
2. Sinha, P.K. Management Control Systems-7th Pune/Nirali Prakashan/2012
3. Bhadada, B.M. Management Control System
4. Billy E. Goetz: Management planning and control - PHI
5. Willsmore A. W. Accounting for Management Control from
6. Charles T. Hongren Accounting for Management Control - PHI
7. ICFAI Management Control Systems. Hyderabad. Icfai Center for Management Research.2008.

8. Halale, Mahesh Management Control Systems-5th Edn. Ahmedabad/Everest

Publishing House/2010
9. Agashe, Anil / Inamdar, Sachin Management Control Systems-5th Edn. Pune/Everest
Publishing House/2010

Revised by Dr.AG in August 2013

SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

Context:
With the financial system getting globalized, it has become necessary for Finance professionals to
understand different avenues of investments and the decision-making process of institutional
investors.
Objectives:
The student will be given an in-depth knowledge of how to analyze and select profitable
securities and then construct a portfolio indicating in what proportion to hold such securities.
Outlines:
1. Introduction to Securities: Investment versus speculation, Investment process, investment
categories, Stock fundamental analysis - economic & industry analysis
2. Concept & tools of economic analysis, industry analysis: introduction, need for industry analysis,
alternative classification of industry, industry life cycle analysis, economic factors & industry
analysis, SWOT analysis for industries.
3. Stock Fundamental Analysis - Company Analysis: Risk & return, financial statement analysis,
equity valuation: forecasting earnings including statistical tools, Balance sheet valuation,
dividend discount model, earnings multiplier approach, other comparative valuation ratios.
4. Technical Analysis: Concept, Dow theory, price indicators, volume indicators, Elliott wave
theory, line and volume chart, bar chart, candlestick chart, Moving averages, relative strength
index, stochastic oscillator, Williams % R. Evaluation of technical analysis.
5. Efficient Market Theory: Random walk, efficient market hypothesis, empirical evidence on weakform, semi-strong form and strong form efficient market hypothesis, Implications of Efficient
Market Theory for investment analysis.
6. Portfolio Analysis: Portfolio risk and return, Markowitz risk-return optimization, single index
model, Capital asset pricing theory (CAPM), Arbitrage pricing theory.
7. Portfolio Management: Specification of investment objectives and constraints, selection of asset
mix, Formulation of portfolio strategy, portfolio selection, portfolio execution, portfolio revision
8. Portfolio performance evaluation. Sharpe, Treynor and Jensens Alpha.
Recommended Books:
Text
1. Fisher & Jordan, Security Analysis & Portfolio Management, 6th Edition, Pearson Education.
2. M. Ranganatham and Madhumati, "Investment Analysis and Portfolio management",
First Ed. (2005), Pearson Education.
Revised by Dr.AG in August 2013

3. Prasanna Chandra, "Investment Analysis and Portfolio Management" , second edition,

Tara-Mcgraw Hill
4. A Damodran, "Investment Valuation", II edition, Wiley Finance.
Reference
1. Francis, J.C. Investments: Analysis And Management. New York. Mcgraw-Hill Company,
Inc.2005, Pp.935
2. Frank K. Reilly & Brown, "Investment Analysis & Portfolio Management", ThomsonSW.
3. Sharpe, Alexender, Bailey, "Investments", Eastern Economy Edition
4. Bhatt, Sujay N. Security Analysis And Portfolio Management New Delhi/Biztantra/2011
5. Ranganathan Investment analysis and Portfolio Management
6. Robert.A.Haugen, Modern Investment Theory, PHI-5th Edition.
7. Gordon, William and Jeffery; Fundamentals of Investment, 3rd ed., Pearson Education
8. Charles P Jones, "Investment Analysis and Management" , ninth edition, Wiley.
9. Bodie, Keynee, Marcus & Mohanty, "Investment Management", Tata-Mcgraw Hill.
10. Khatri, D.K. Investment Management & Security Analysis:Text And Cases 2 nd Edn. New
Delhi/Macmillan Publishers India Ltd./2011
11. Murray, R.F./Cottle, S./Block, F.E.Graham And Dodd's Security Analysis New Delhi/Tata
Mcgraw-Hill Publishing Company Limited/2007
12. Graham, Benjamin/Dodd, David Security Analysis: Principles And Technique (With Cd No.
794)-6th Edn. New Delhi/Mcgraw Hill Education (India) Private Limited/2008
13. Thomas, S.Security Analysis And Portfolio Management New Delhi/Phi Learning Private
Limited/2014
14. Cohen, J.B./Zinbarg E.D./Zeikel, A. Investment Analysis And Portfolio Management 5 th
Homewood/Irwin/1987
15. Fischer, D.E./Jordan, R.J Security Analysis And Portfolio Management 6 th Edn.. New
Delhi/Pearson Education Asia/2003

Revised by Dr.AG in August 2013

TAX PLANNING AND MANAGEMENT

Context:
With liberalization and deregulation, business organization finds the tax and regulatory environment
changing rapidly in the direction of flexibility coupled with greater accountability. A finance professional
now has to give greater attention to the environmental interface while taking any major decision in the
finance area. Hence an understanding of fundamental factors in the tax and regulatory environment
becomes essential.
Objectives:
1. To understand the provisions of tax laws
2. To gain knowledge on procedural aspects for filing tax returns for various assesses and other
statutory compliances
3. To get knowledge of various tax incentives and benefits under direct taxes
Outlines:
1.Basics: Terminology/Concepts required like assessee, year, person, income revenue and capital
expenditure, Basis of Charge, Exemptions etc. Residential Status& Incidence of Tax: Individual, Firm,
HUF, Corporate etc. Incomes exempt from tax Section 10
2. Heads of income Part I: Salaries, Income from House Property
3.Heads of Income Part - II: income from business and profession capital gains, income from other
sources, income from business and profession; Income of other persons Set off and carry forward of
losses, Deductions from GTI &Tax liability
4.Agricultural Income, Assessment of Individuals, HUF , Firms & AOPs, Trusts, Co-operative Societies
and Companies and other persons
5. Return of Income and assessment, penalties, Advance Tax, Interest, IDS,. CTS, Refund, Appeals
&Authorities
6. Tax evasion, Tax avoidance, tax planning, tax management, need for tax planning, precautions in tax
planning, Limitations of tax planning, taxation of international transaction, acquisitions, setting up of a
new business etc.
7. Wealth Tax, Service Tax, Excise and Custom duty relevance tax laws
Recommended Books:
Text
1. Singhania, V. Students Guide to Income Tax. New Delhi. Taxmann Allied Services (P) Ltd. 2010,
PP.xx,1000

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2. Taxmann's Income Tax Act .New Delhi. Taxmann Publication Pvt. Ltd.2010.Pp.1282
3. Datey, V. S.Indirect Taxes: Law and Practice 2009.New Delhi. Taxmann Publication Pvt.
Ltd.2009,Pp.890
4. Nag, C.K. Karmakar, C. Direct And Indirect Tax Laws And Practice. New Delhi. New Central
Book Agency.2008,Pp.Xxv, 724
5. AHUJA, G./GUPTA, R. Systematic Approach To Income Tax Service Tax & Vat-30th
New Delhi/Bharat Law House Pvt. Ltd./2013
Reference
6. Singhania, V.K. Singhania, M. Students Guide to Income Tax Including Service Tax New Delhi.
Taxmann Allied Services (P) Ltd. 2009, PP.860
7. Ramaiya, A. Guide to the Companies Act. Appendices Part 1 & Part 2. Nagpur. Wadhwa&
Co.2001, PP. ccxxii, 2336, 207
8. Singhania, V.K. Direct Taxes Ready Reckoner 2010-11 & 2011-12.New Delhi. Taxmann
Publication Ltd.2010,Pp.248
9. Mehta, N.V. Income-Tax Ready Reckoner 2010-2011.Mumbai.Shree Kuber Publishing
House.2010,Pp.344
10. Jain, R K. Central Excise Law Manual 2008-09: With Service Tax Ready Reckoner. New Delhi.
Centax Publications Pvt. Ltd.2008,Pp.Xxiii, 1100.
11. IMS Publications Tax Planning (Concept Book) Mumbai/IMS Learning Resources Pvt. Ltd./2008

Revised by Dr.AG in August 2013

FIXED INCOME SECURITIES

Objectives:
To acquaint students with fixed income securities - bonds and securities, their pricing, trading strategies,
risk management, and yield curves.
Contents:
1. Debt Instruments: Basic concepts of debt instruments
2. Indian Debt Markets: Different types of products and participants; Secondary market for debt
instruments.
3.Central Government Securities-Bonds: Primary issuance process; Participants in Government bond
markets; Constituent SGL accounts; Concept of Primary dealers, Satellite dealers; Secondary markets for
Government bonds; Settlement of trades in G-Secs; Clearing Corporation; Negotiated Dealing System;
Liquidity Adjustment Facility (LAF).
4. Central Government Securities-Treasury Bills: Issuance process; Cut-off yields; Investors in T-bills,
Secondary market activity in T-bills.
5. State Government Bonds: Gross fiscal deficit of state Governments and its financing, Volume, coupon
rates and ownership pattern of state Government bonds.
6. Call Money Markets: Participants in the call markets, call rates.
7. Corporate Debt-Bonds: Market Segments, issue process, issue management and book building, terms
of debenture issue, credit rating.
8. Commercial Paper and Certificate of Deposits Guidelines for CP issue, Rating notches for CPs, Growth
in the CP market, stamp duty, certificates of deposit
9.Repos: Repo rate, calculating settlement amounts in repo transactions, advantages of repos, recent
issues in repo market in India, secondary market transactions in repos.
10. Bond market indices and Benchmarks: I-Bex, Sovereign bond index, NSE-MIBID/MIBOR
11.Trading Mechanism in NSE-WDM: Description of the NSE WDM trading system, order types and
conditions, order entry in negotiated trades market, order validation and matching, trade management,
reports, settlement, rates of brokerage.
12. Regulatory and Procedural Aspects: G-Sec Act 2006, SEBI (Issue and Listing of Debt Securities)
Regulations 2008 and Market Practices and Procedures.
13.Valuation of Bonds: Bond valuation; Accrued interest; Yield; Weighted yield; YTM of a portfolio;
Realized yield; Yield-price, relationships of bonds
14.Yield Curve and Term Structure of Interest Rates: Yield Curve; Bootstrapping; Alternate
methodologies to estimate the yield curve; Theories of the term structure of interest rates
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15. Duration: Introduction and definition; Calculating duration of a coupon paying bond; Computing
duration on dates other than coupon dates; Modified duration; Rupee duration; Price value of a basis
point; Portfolio duration; Limitations of duration
16.Fixed Income Derivatives: Concept of fixed income derivatives; Mechanism of forward rate
agreements; Interest rate swaps
Recommended Books:
Text
1. Hand Book of Fixed Income Securities, Frank J. Fabozzi, McGraw-Hill Professionals
2. Moorad Chowdhary Introduction to Bond Markets, John Wiley and Sons
3. Suresh Sundaresan Fixed Income Markets and their Derivatives, South Western College
Publications
4. A V Rajwade Handbook of Debt Securities and Interest Rate Derivatives, , TATA McGraw Hill
5. Apte, A./Sen, J. Fixed Income Markets in India: Investment Opportunities For
You Mumbai/Shroff Publishers & Distributors/2012
Reference
1. Fixed Income Securities - Tools for Today's Markets, Bruce Tuckman, John Wiley and Sons
2. Duration, Convexity, and other Bond Risk Measures, Frank J. Fabozzi, John Wiley and Sons
3. Fixed Income Analysis - Second Edition, Frank J. Fabozzi, John Wiley and Sons
4. Moorad Chowdhary Bond & Money Market Strategy, Butterworth Heinemann
5. Moorad Chowdhary The Money Markets Handbook: A Practioners Guide, John Wiley and Sons
6. Moorad Chowdhary Analysing& Interpreting the Yield Curve, John Wiley and Sons
7. Moorad Chowdhary, Fixed Income Markets (Instruments, Applications, Mathematics), John
Wiley and Sons
8. Moorad Chowdhary An Introduction to Repo Markets, , John Wiley and Sons
9. Philippe Jorion Value at Risk, McGraw-Hill
10. Olivier De La Grandville Bond Pricing & Portfolio Analysis, MIT Press

11. Rajwade , A V Handbook Of Debt Securities And Interest Rate Derivatives New
Delhi/Mcgraw Hill Education (India) Private Limited/2007

Revised by Dr.AG in August 2013

FINANCE ELECTIVE
SEM IV
MERGERS, ACQUISITIONS AND CORPORATE RESTRUCTURING
Context:
This course is concerned with the decision-making in the finance sub-system of the enterprise, such that
the short-term and long-term needs of the enterprise are effectively met. The enterprise needs to be
financially efficient, viable and sustainable. This necessitates looking into the enterprise and the finance
function in a larger perspective facing key challenges posed by the global markets.
Objectives:
At the end of the course the student should be able to
a) Understand the strategic element involved in financial decision-making;
b) Effectively and efficiently manage the both sides of balance sheet, i.e. financing and investing;
c) Look alternative ways for growing the organization through mergers and acquisitions.
Outlines:
1. Financial Environment: Determining financial objectives within the strategic planning process, identify
key stakeholders of organizations and the interests of each stakeholder group, corporate social
responsibility, its relationship to the objective of maximising shareholder wealth, agency theory and its
relevance to financial managers, the professional, regulatory and legal framework relevant to financial
management.
2. Mergers and Acquisitions: Introduction to M & A, Categorize merger and acquisition (M & A)
activities based on forms of integration and types of mergers, Common Motivations behind M & A
activity, The M & A Process, Due Diligence, EPS Bootstrapping and Calculation of post-merger EPS,
Valuing a Target Company, Evaluating merger bid, Post Merger Value of the Acquirer/Gains accrued to
the acquired vs. acquirer, Reasons for Failure for M & A/Problems for M & A in India, Pre-Offer and
Post-Offer Takeover Defense Mechanism, Cross Border M & A.
3. Corporate Debt Restructuring: CDR System and its objectives, Standing Forum, Core Group,
Empowered Group, CDR Cell, Monitoring Mechanism, CDR Performance.
Recommended Books
Text:
1

Ruth Bender and Keith Ward, Corporate Financial Strategy. Butterworth Heinemann

Sudi Sudarsanam, Creating Value from Mergers and Acquisitions, FT Prentice Hall.

H.R.Machiraju Mergers, Acquisitions and Takeovers, New Age International Publishers.

Kamal Ghosh Ray, Mergers and Acquisitions: Strategy, Valuation and Integration, PHI Learning.

Revised by Dr.AG in August 2013

Vishwanath, S.R./Krishnamurti, C. Mergers, Acquisitions And Corporate Restructuring

New Delhi/Response Books (A Division Of Sage Publications India Pvt. Ltd.)/2008

Reference
1. Harold Bierman, Jr., Corporate Financial Strategy and Decision Making to Increase
Shareholder Value, Wiley.
2. S. R. Vishwanath, Chandrasekhar Krishnamurti, Advanced Corporate Finance, PHI
Learning.
3. Mark Grinblatt and Sheridan Titman, Financial Markets and Corporate Strategy, 2nd
Edition (Irwin/McGraw-Hill, 2002)
4. Joseph P. Ogden, Frank C. Jen, Philip F. O'connor, Advanced Corporate Finance: Policies
and Strategies, Pearson Education Ltd.
5. Brealey, Myers, and Allen, Principles of Corporate Finance 9/e (BMA).
6. Mulherin, J.H./Weston, J.F./Mitchell, P.R. Takeovers, Restructuring, and Corporate
Governance-4th New Delhi/Pearson Education Pvt.Ltd./2011.
7. Aswath Damodaran, Investment Valuation, Second Edition, 2002, John Wiley & Sons,
Inc.
8. Hersh Shefrin, Behavioral Corporate Finance, McGraw-Hill
9. Richard H. Thaler, Advances in Behavioral Finance, Russell Sage Foundation.
10. Arnold, G. Handbook Of Corporate Finance: A Business Companion To Financial
Markets, Financial Times Prentice Hall.
11. P. Mohan Rao, Mergers And Acquisitions of Companies, Deep and Deep Publications.
12. Ramanujam, Mergers and Acquisitions, Lexis Nexis.
13. Weston, Mergers and Acquisitions, Tata McGraw Hill.
14. Desai, Jay M./Joshi, Nisarg A. Mergers And Acquisitions New Delhi/Biztantra/2012
15. Kumar, B.R. Mergers And Acquisitions: Text And Cases By New Delhi/Tata Mcgraw
Hill Education Private Limited/2011
16. Sudarsanam, S. Creating Value From Mergers And Acquisitions: The Challenges New
Delhi/Pearson Education (Singapore) Pvt. Ltd./2004
17. Boeh, K.K./Beamish, P.W. Mergers And Acquisitions: Text And Cases New Delhi/Sage
Publications India Pvt. Ltd./2008

Revised by Dr.AG in August 2013

PROJECT FINANCE
Context
With a fluid global environment and increasing pace of innovation and technological changes, enterprises
have to undertake modernisation and up gradation more frequently than in the past. Not only this, there
can be standalone new projects too, right from pipelines to refineries and electric-generating facilities,
hydroelectric projects and so on. This calls for deploying funds on a one-time basis and monitoring their
utilisation towards the desired end.
Objectives
Students should be able to:
1. Define the principles of searching, screening, defining and evaluating projects;
2. Ensuring financial feasibilities of the project and satisfying their funding requirements;
3. Understanding different kinds of projects risks and their mitigation;
4. Describe and meet the requirements of financing institutions and regulatory institutions.
Content Outline
1. An Overview of Project Finance
Introduction to project finance, project life cycle and its impact on the feasibility Project identification
Different types of needs leading to different types of projects under BMRED (Balancing,
Modernization, Replacement, Expansion and Diversification) Considerations involved in decision
under each of these types Macro parameters in project selection Different considerations for project
under private, public and joint sectors Project formulation: preparation of project profile, Structuring
Projects: Description of a Typical Project Finance Transaction.
2. Project appraisal
Different types of appraisal Technical, economic, organizational and managerial, commercial and
financial Projected Financial Statements Financial techniques for project appraisal and feasibility
discounted cash flow and non-discounted cash flow methods Social cost benefit analysis and economic
rate of return Non-financial justification of projects.
3. Project Risk Analysis
Risk Analysis in Capital Investment Decisions what is Risk Types of Risk Measurement of Risk
Method of Incorporating Risk into Capital Budgeting Monte Carlo Simulation Deal structuring
through risk identification, assessment & mitigation Managing Project Risks: How risk management
creates value in project finance.
4. Project Financing
Pattern of financing Sources of finance Impact of taxation Public loans Small savings Surplus
of public enterprises Deficit financing Foreign aid Public sector project financing Syndication
Leverage Leases Various debt instruments and innovative Structures Equator principles securitizing
project loans PPP Models of Project Finance PPP models from Supply and Service Contracts
Management Agreements Leasing, DBO, BOT, BOO, Privatization Infrastructure Project Financing.
5. Special Issues

Revised by Dr.AG in August 2013

Project Financial Closure - The role of credit ratings in project finance transactions the role of Private
Equity and Venture Capital Public Private Partnerships.
Recommended Books
Text
1 Prasanna Chandra, Projects, Planning, Analysis, Selection, Financing, Implementation and
Review- Tata McGraw Hill Publishing.
2

Finnerty, J.D., Project Finance: Asset-Based Financing Engineering, John Wiley & Sons (New
York,NY).

Bhavesh M Patel, Project Management: Strategic Financial Planning, Evaluation and Control,
Vikas Publishing House.

D.P.Sarda, Project Finance: Appraisal & Follow-up, ABD Publishers.

Krishnamurthi, S. Project Finance: Policies, Procedures and Practice, Vinod Law Publications.

Reference
1 Fabozzi,F., and P. Nevitt, 2000, Project Financing, Euro money Publications (London, UK).
2 S. Choudhury -Project Management - -Tata McGraw Hill Publishing.
3 Gopalkrishnan, P./Moorthy, V.E.R, Text Book Of Project Management, Macmillan India
Limited.
4 Joy, P.K. Total Project Management: The Indian Context, Macmillan India Limited.
5 Young, T.L., Project Management Manual: Planning Projects, Leading Projects, Implementing
Projects, Global Business Press.

6 Agrawal, M R Project Planning and Budgetary Control JAIPUR/Garima Publications/2008

7 Patel, Bhavesh. Project Management: Financial Evaluation With Strategic Planning,
Networking
and Control 2nd Edn. Noida/VIKAS PUBLISHING HOUSE PVT. LTD./2010
8 Morrison, D.J./Slywotzky, A.J. Project Zone: How Strategic Business Design Will Lead You
to Tomorrow's Profits New York/Times Books, A Division of Random House, Inc./1997
9 Nokes, S./Kelly, S. Definitive Guide to Project Management: The Fast Rack to Getting the
Job Done on Time and on Budget 2nd Edn New Delhi/PEARSON EDUCATION
PVT.LTD./2007
10 Harvard Business Essentials Managing Projects Large and Small: The Fundamental Skills for
Delivering on Budget and on Time Boston/Harvard Business School Press/2004
Revised by Dr.AG in August 2013

11 Kesiraju, K .Project Risk Management Hyderabad/ICFAI University Press/2004

12 Lewis, James P. Project Planning Sceduling & Control: A Hands-On Guide To Bringing
Projects In On Time And On Budget New Delhi/Tata Mcgraw-Hill Publishing Company
Limited/2004

FINANCIAL PLANNING AND WEALTH MANAGEMENT

Context:
The Financial Services sector has grown by leaps and bounds in India in the last two decades. With
increasing competition and greater consumer awareness, a lot of opportunities for employment and
growth have been generated in financial planning and wealth management.
Objectives:
1. To identify and comprehend the different elements of the Financial Planning Process;
2. To provide an overview of the Wealth Management Context
Outlines:
1. Understanding financial planning: meaning, need, scope and goals. Wealth Management-business
overview. Financial Planning and Wealth Management Process, Risk Profiling of clients.
2. Asset Allocation: Building model portfolio, portfolio re-balancing.etc.
3. Portfolio Performance Measurement:performance measurement parameters, Risk adjusted returnsharpe,treynor and jensens alpha,performance attribution.
4. Investment Products-equity market, equity derivatives,bond markets,currency markets,commodity
derivative,mutual funds and insurance,alternative investment products,etc.
5. Retirement Planning.
.
Recommended Books:
Text

1. Dun/Bradstreet Wealth Management New Delhi, TataMcgraw-Hill Publishing

Company Limited/2009, ix pp 144
2. Bagchi, S.K. Wealth Management: Includes A Detailed Analysis OF Risk-Free & Low
Risk Investments Mumbai/Jaico Publishing House/2009, xiv, pp 925.
3. Prasanna Chandra, Investment Analysis and Portfolio Management, Tata McGraw Hill.
4. Tripathi, Naliniprava Wealth Management New Delhi/Mahamaya Publishing House/2009
Reference
Revised by Dr.AG in August 2013

1. Jack, R, Kapoor, Les R. Dlabay and Robert J.Hughes, Personal Finance. McGraw Hill
2. Arthur Keown, Personal Finance Workbook, Pearson.
3. SHIM, J.K. Handbook of Financial Planning: An Expert's Guide for Advisors and Their
Clients
AUSTRALIA/THOMSON LEARNING/2004
4. IMS Publications Introduction to Financial Planning (Concept Book) Mumbai/IMS
Learning Resources Pvt. Ltd./2008

CREDIT RISK MANAGEMENT

Objectives: The following are the key objectives of this course:
1. To establish a strong and pro-active credit risk management framework for the organization
2. How to measure credit risk for different portfolios
3. Basel II/RBI guidelines for measuring and managing credit risk.
Contents:
1. Introduction: Concept of credit risk management, Credit risk management process, Classification of
credit risk Default risk and migration risk, Risk mitigating measures.
2. Measuring Credit risk: Probability of default, Exposure at Default, Loss Given Default Modeling credit
losses, Concept of expected and un-expected losses, Joint probabilities of default
3. Credit risk computation: The computation of credit risk for a market portfolio using Credit Metrics
methodology, Credit risk computation challenges - Cumulative default probabilities, Transition matrices.
4. Credit risk management: Managing credit risk through pricing and capital cushion, Concept of
RAROC, Mitigation of credit risk through Netting arrangements, Collateral, Limits, Termination
Rights, and Guarantees. Credit derivatives. Credit risk exposure monitoring, Credit risk management in
banks in practice. Role of technology in credit risk management
5. Basel and RBI Guidelines for management of credit risk.
Recommended Books:
Text
1. Ciby Joseph-Credit Risk Analysis. Tata McGraw Hill.
2. S.K. Bagchi-Credit Risk Management. Jaico Publishing House.
3. Hrishikes Bhattacharya-Banking Strategy, Credit Appraisal, And Lending Decisions: A Risk
(Return Framework).Oxford University Press.
4. S.K. Bidhani, P.K.Mitra, Pramod Kumar-Credit Risk Management. Taxmann 5. Publications.
5. Vaidyanathan, K.,Credit Risk Management for Indian Banks New Delhi/Sage Response/2013
Revised by Dr.AG in August 2013

Reference
1. Popli, G.S./Puri, S.K. Strategic Credit Management In Banks New Delhi/Phi Learning Private
Limited/2013
2. D.D. Mukherjee- Credit Appraisal, Risk Analysis And Decision Making. Snowhite
3. B.N.Dash-Commercial Banking Risk And Credit Management. Arise Publishers And Distributors
4. David Lando-Credit Risk Management. New Age International.
5. Da Silva A-Credit Risk Models, New Tools For Credit Risk Management, Icfai Press.
6. Fight, Andrew. Credit Risk Management Oxford/Butterworth-Heinemann Elsevier/2004

7. Bagchi, S.K.Credit Risk Management: Rbi / Basel Ii Implications-3RD Edn.

Ahmedabad/Jaico Publishing House/2013
8. Balaraman, R./Chatterjee, D.P./Indian Institute Of Banking & Finance Risk
Management: An Overview Chennai/Macmillan Publishers India Ltd./2011
9. Popli, G.S./Puri, S.K. Strategic Credit Management In Banks New Delhi/Phi Learning
Private Limited/2013
10. Bhattacharya, Hrishikes Banking Strategy, Credit Appraisal, And Lending Decisions: A
Risk-Return Framework 2ND Edn. New Delhi/Oxford University Press/2011
11. Bidani, S.N./Kumar, Pramod./Mitra, P.K. Credit Risk Management New
Delhi/Taxmann Allied Services (P) Ltd./2004
12. Bagchi, S.K. Treasury Risk Management: Analysing Market Risk Dynamics 2ND By
Ahmedabad/Jaico Publishing House/2009
13. Dash, B.N. Commercial Banking: Risk And Credit Management 1ST Edn By New
Delhi/Arise Publishers And Distributors/2011
14. Bagchi, S.K.Treasury Risk Management: Analysing Market Risk Dynamics 2ND Edn
Ahmedabad/Jaico Publishing House/2009

Revised by Dr.AG in August 2013

DERIVATIVES
Objectives:
This course provides an in depth understanding of various derivative securities and markets. It covers
options, futures, forwards, swaps, interest rate forwards and options, commodity derivatives. It aims at
giving the conceptual understanding as well as practical knowledge about derivative markets in India.
Contents:
1.Derivative Markets: Definition and Origin of Derivatives, Derivative Markets and Instruments, Growth
of Derivatives in India, Basic Derivatives Forwards, Futures, and Options, Derivative
Terminologies.
2.Forwards and Futures: Structure of Forwards and Futures Markets, Forward Contracts, Futures
Exchanges and Contracts, Types of Futures, Mechanics of Future Trading, Major Characteristics, Trading
Process, Price Quotations, Hedging and Speculation with Commodity Futures, Interest Rate Futures,
Currency Futures and Stock Index Futures, Principles of Pricing
Forwards, Futures and Options on Futures Contracts, Forwards and Futures Hedging, Pricing of Index
Futures Contracts, Stock Index Arbitrage.
3. Options: Option Pricing, Principles of Call and Put Option Pricing, Binomial and Black Scholes Option
Pricing Models, Factors Affecting Option Prices, Basic and Advanced Option Strategies, Types of
Options, Interest Rate Options, Currency Options and Trading Strategies, Option Pricing Models, Options
on Futures Contracts and Exotic Options, Elementary Inventory Strategies, Complex Investment
Strategies, Covered Call Writing, Protective Put, Straddles and Strangles, Spreads, Evaluation of Option
Based Investment Strategies, Risk Associated with Options, Options Sensitivities.
4. Swaps: Evolution of Swap Market, Interest Rate Swaps, Currency Swaps, Equity Swaps, Swap
Terminology, Motivations Underlying Swaps, Mechanics of Swap Transactions, Valuation and
Application of Swaps.
5. Interest Rate Forwards and Options: Forward Rate Agreements, Interest Rate Options, Interest rate
Swaps and Forwards, Interest Rate Derivatives Strategies.

Revised by Dr.AG in August 2013

6.Commodity Derivatives: Evolution of Commodity Derivative Markets in India, Products, Participants,

Functions, Instruments Available for Trading, Pricing of Commodity Futures, Hedging, Speculation,
Arbitrage, Trading, Clearing and Settlement, Risk Management, Regulatory Framework.
Recommended Books:

Recommended Books:
Text
1. Hull, John, C. (2009), Options, Futures, and Other Derivatives, Pearson Prentice Hall.
2. SRIVASTAVA, R.Derivatives and Risk Management New Delhi/Oxford University Press/2010 .
3. Mishra, S.K. Derivatives And Risk Managemen Pune/Everest Publishing Ouse/2010
4. Bhalla, V.K. Financial Derivatives: Risk Management
Company Ltd./2001

New Delhi/S Chand &

5. Somanathan, T.V./Mehta, D.R. Derivatives New Delhi/Tata Mcgraw-Hill Publishing

Company Limited/2006

Reference

1. Strong, R.A. Derivatives: An Introduction Australia/Thomson Learning/2001

2. Kolb, Robert W., and Overdahl, James A. (2003), Financial Derivatives, John Wiley &
Sons, Inc.
3. Chance, Don M., and Brooks, Robert (2008), Introduction to Derivatives and Risk
Management. Thomson South Western.
4. Whaley, Robert E. (2006), Derivatives: Markets, Valuation, and Risk Management, John
Wiley & Sons, Inc.
5. Schofield, Neil C. (2007), Commodity Derivatives: Markets and Applications, John
Wiley & Sons, Inc.
6. Rajib, Prabina Commodity Derivatives And Risk Management New Delhi/Phi
Learning Private Limited/2014
7. Mishra, S.K. Derivatives And Risk Managemen Pune/Everest Publishing Ouse/2010
8. Rajwade, A.V. Cash And Derivatives Markets In Foreign Exchange New Delhi/Tata
Mcgraw-Hill Publishing Company Limited/2010
9. Taylor, F. Mastering Derivatives Markets: A Step-By-Step Guide To The Products,
Applications And Risks 3rd Edn New Delhi/Pearson Education Pvt. Ltd./2007
10. Somanathan, T.V./Mehta, D.R. Derivatives New Delhi/Tata Mcgraw-Hill Publishing
Company Limited/2006

Revised by Dr.AG in August 2013

11. Gupta,

S.L. Financial Derivatives: Theory,

Delhi/Prentice-Hall Of India Private Limited/2005

12. Dubofsky,

Concepts

David.A./Miller,
T.W.
Derivatives:
Management Oxford/Oxford University Press/2003

And

Valuation

Problems New
And

Risk

13. Rajib, Prabina Commodity Derivatives And Risk Management New Delhi/Phi
Learning Private Limited/2014
14. Chacko, G./Motohashi, H./Sjoman, H. Credit Derivatives:A Primer On Credit Risk,
Modeling, And Instruments New Delhi/Pearson Education Pvt.Ltd./2006
15. Redhead, K. Financial Derivatives:An Introduction To Futures, Forwards, Options And

Swaps New Delhi/Prentice-Hall Of India Private Limited/1997

Revised by Dr.AG in August 2013