University of Mumbai Project On: TOPIC NAME

UNIVERSITY OF MUMBAI
PROJECT ON
***TOPIC NAME***
BACHELOR OF COMMERCE
BANKING & INSURANCE
SEMESTER V
(2017-2018)
SUBMITTED
In partial Fulfillment of the requirement for the
Award of Degree of Bachelor of Commerce – Banking & Insurance.
SUBMITTED BY,
***YOUR NAME***
ROLL NO. - **
UNDER GUIDANCE,
***GUIDE NAME (Asst. Prof. *******)***
MAHARSHI DAYANAND COLLEGE OF ARTS, SCIENCE & COMMERCE PAREL,

MUMBAI – 400 012.
MAHARSHIDAYANANDCOLLEGE
OF ARTS, SCIENCE & COMMERCE
PAREL, MUMBAI – 400 012.
CERTIFICATE
This is to certify that MISS/MR. ***YOUR NAME*** of B.Com (Banking &

Insurance) Semester V (2017-2018) has successfully completed the project
on ***TOPIC NAME*** under the guidance of ***GUIDE NAME(Asst.
Prof. ******)*****
Course Coordinator Principal
Project Guide/Internal Examiner External Examiner

DECLARATION
I am MISS/MR. ***YOUR NAME***. The student of B. com (Banking &

Insurance) Semester V (2017-2018) hereby declares that I have completed
the Project on ***TOPIC NAME***. The information submitted is true
and original to the best of my knowledge.
Signature of student
Name of Student
MISS/MR. ***YOUR NAME***.
Roll No. **
ACKNOWLEDGEMENT
The college, the faculty, the classmates & the atmosphere, in the college
were all the favorable contributory factors right from the point when the
topic was to be selected till the final copy was prepared. It was a very
enriching experience throughout the contribution from the following
individuals in the form in which it appears today. We feel privileged to take
this opportunity to put on record my gratitude towards them.
PROF. KUNAL SONI made sure that the resource was made available in
time & also for immediate advice & guidance throughout making this
project. The principal of our college DR. T.P.GHULE and our Vice-Principal
Mrs. SANJEEVANI PHATAK has always been inspiring & driving force. We
are thankful to Mr. SANTOSH SHINDE associated with administration part
of Financial Markets & Banking & Insurance section has been very helpful
in making the infrastructure available for data entry.
EXECUTIVE SUMMARY
***(ES will contain your whole project conceptual understanding within
a page (1 page)***
CONTENTS
SR NO TOPIC PAGE NUMBER

1.1 Introdution 1
1.2 Definition of Investment Banking 4
1.3 The History of Investment Banking
1.4 Credit Enchanement, Business Plan, Litigation

Services
2.1 Evalvation of Investment Banking in India
2.2 Function of Investment Banking
2.3 Core Investment Banking Activites
2.4 Front Off

INVESTMENT BANKING
INDEX
1 CHAPTER-1
1.1 Introdution
1.2 Definition of Investment Banking
1.3 The History of Investment Banking
1.4 Credit Enchanement , Business Plan, Litigation Services
2 CHAPTER-2
2.1 Evalvation of Investment Banking in India
2.2 Function of Investment Banking
2.3 Core Investment Banking Activites
2.4 Front Office,Middle Office and Back Office
3 CHAPTER-3
3.1 Organization Strueture
3.2 Industry Profile
3.3 Top 10 Banks
3.4 Financial crisis of 2008
4 CHAPTER-4
4.1 Major Investment Bank in indai
4.2 Conclusion
4.3 Bibliography
M.D.COLLEGE TYBI TYBI INVESTMENT BANKING
CHAPTER 1
INTRODUCTION
An investment bank is a financial institution that assists individuals,

corporations, and governments in raising capital by underwriting or acting as the
client's agent in the issuance of securities (or both). An investment bank may also
assist companies involved in mergers and acquisitions and provide ancillary
services such as market making, trading of derivatives and equity securities, and
FICC services (fixed income instruments, currencies, and commodities).
Unlike commercial banks and retail banks, investment banks do not take deposits.
From 1933 (Glass–Steagall Act) until 1999 (Gramm–Leach–Bliley Act), the
United States maintained a separation between investment banking and
commercial banks. Other industrialized countries, including G8 countries, have
historically not maintained such a separation. As part of the Dodd–Frank Wall
Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act of 2010),
Volcker Rule asserts full institutional separation of investment banking services
from commercial banking.
There are two main lines of business in investment banking.
The "sell side" involves trading securities for cash or for other securities
(e.g. facilitating transactions, market-making), or the promotion of
securities (e.g. underwriting, research, etc.).
The "buy side" involves the provision of advice to institutions concerned

with buying investment services. Private equity funds, mutual funds, life
insurance companies, unit trusts, and hedge funds are the most common
types of buy side entities.





 B.COM(BANKING INSURANCE ) 1 | P a g e
M.D.COLLEGE TYBI INVESTMENT BANKING
An investment bank can also be split into private and public functions with an
information barrier which separates the two to prevent information from crossing.
The private areas of the bank deal with private insider information that may not
be publicly disclosed, while the public areas such as stock analysis deal with
public information.
An advisor who provides investment banking services in the United States must
be a licensed broker-dealer and subject to Securities & Exchange Commission
(SEC) and Financial Industry Regulatory Authority (FINRA) regulation.
Sales and trading
On behalf of the bank and its clients, a large investment bank's primary function
is buying and selling products. In market making, traders will buy and sell
financial products with the goal of making money on each trade. Sales is the term
for the investment bank's sales force, whose primary job is to call on institutional
and high-net-worth investors to suggest trading ideas (on a caveat emptor basis)
and take orders. Sales desks then communicate their clients' orders to the
appropriate trading desks, which can price and execute trades, or structure new
products that fit a specific need. Structuring has been a relatively recent activity
as derivatives have come into play, with highly technical and numerate employees
working on creating complex structured products which typically offer much
greater margins and returns than underlying cash securities. In 2010, investment
banks came under pressure as a result of selling complex derivatives contracts to
local municipalities in Europe and the US. Strategists advise external as well as
internal clients on the strategies that can be adopted in various markets. Ranging
from derivatives to specific industries, strategists place companies and industries
in a quantitative framework with full consideration of the macroeconomic scene.
This strategy often affects the way the firm will operate in the market, the
direction it would like to take in terms of
B.COM(BANKING INSURANCE ) 2 | P a g e
its proprietary and flow positions, the suggestions salespersons give to clients, as
well as the way structures create new products. Banks also undertake risk through
proprietary trading, performed by a special set of traders who do not interface
with clients and through "principal risk"—risk undertaken by a trader after he
buys or sells a product to a client and does not hedge his total exposure. Banks
seek to maximize profitability for a given amount of risk on their balance sheet.
The necessity for numerical ability in sales and trading has created jobs for
physics, computer science, mathematics and engineering Ph.D.s who act as
quantitative analysts.
Definition of 'Investment Banking’

A specific division of banking related to the creation of capital for other
companies. Investment banks underwrite new debt and equity securities for all
types of corporations. Investment banks also provide guidance to issuers
regarding the issue and placement of stock.
THE HISTORY OF INVESTMENT BANKING
JP Morgan
Undoubtedly, investment banking as an industry in the United States has come

a long way since its beginnings. Below is a brief review of the history
1896-1929
Prior to the great depression, investment banking was in its golden era, with the
industry in a prolonged bull market. JP Morgan and National City Bank were the
market leaders, often stepping in to influence and sustain the financial system. JP
Morgan (the man) is personally credited with saving the country from a
calamitous panic in 1907. Excess market speculation, especially by banks using
Federal Reserve loans to bolster the markets, resulted in the market crash of 1929,
sparking the great depression.
1929-1970
During the Great Depression, the nation’s banking system was in shambles, with
40% of banks either failing or forced to merge. The Glass-Steagall Act (or more
specifically, the Bank Act of 1933) was enacted by the government with the intent
of rehabilitating the banking industry by erecting a wall between commercial
banking and investment banking. Additionally, the government sought to provide
the separation between investment bankers and brokerage services in order to
avoid the conflict of interest between the desire to win investment banking
business and duty to provide fair and objective brokerage
services (i.e., to prevent the temptation by an investment bank to knowingly

peddle a client company’s overvalued securities to the investing public in order
to ensure that the client company uses the investment bank for its future
underwriting and advisory needs). The regulations against such behavior became
known as the "Chinese Wall."
1970-1980
In light of the repeal of negotiated rates in 1975, trading commissions collapsed

and trading profitability declined. Research-focused boutiques were squeezed out
and the trend of an integrated investment bank, providing sales, trading, research,
and investment banking under one roof began to take root. In the late 70’s and
early 80’s saw the rise of a number of financial products such as derivatives, high
yield an structured products, which provided lucrative returns for investment
banks. Also in the late 1970s, the facilitation of corporate mergers was being
hailed as the last gold mine by investment bankers who assumed that Glass-
Steagall would someday collapse and lead to a securities business overrun by
commercial banks. Eventually, Glass-Steagall did crumble, but not until 1999.
And the results weren’t nearly as disastrous as once speculated.
1980-2007
In the 1980s, investment bankers had shed their stodgy image. In its place was a
reputation for power and flair, which was enhanced by a torrent of mega-deals
during wildly prosperous times. The exploits of investment bankers lived large
even in the popular media, where author Tom Wolfe in “Bonfire of the
Vanities” and movie-maker Oliver Stone in “Wall Street” focused on investment

banking for their social commentary.
Finally, as the 1990s wound down, an IPO boom dominated the perception of
investment bankers. In 1999, an eye-popping 548 IPO deals were done – among
the most ever in a single year -- with most going public in the internet sector.
The enactment of the Gramm-Leach-Bliley Act (GLBA) in November 1999

effectively repealed the long-standing prohibitions on the mixing of banking with
securities or insurance businesses under the Glass-Steagall Act and thus permitted
“broad banking.” Since the barriers that separated banking from other financial
activities had been crumbling for some time, GLBA is better viewed as ratifying,
rather than revolutionizing, the practice of banking
Credit enhancement
Credit enhancement is key in creating a security that has a higher rating than the
underlying asset pool. Credit enhancement can be created, for example, by issuing
subordinate bonds. The subordinate bonds are allocated any losses from the
collateral before losses are allocated to the senior bonds, thus giving senior bonds
a credit enhancement. As a result, it is possible for defaults to occur in repayment
of the underlying assets without affecting payments to holders of the senior bonds.
Also, many deals, typically those involving riskier collateral, such as subprime
and Alt-A mortgages, use over-collateralization as well as subordination. In over-
collateralization, the balance of the underlying assets (e.g., loans) is greater than
the balance of the bonds, thus creating excess interest in the deal which acts as a
"cushion" against reduction in value of the underlying assets. Excess interest can
be used to offset collateral losses before losses are allocated to bondholders, thus
providing another credit enhancement. A further credit enhancement involves the
use of derivatives such as swap transactions, which effectively provide insurance,
for a set fee, against a decrease in value.
Monoline insurers play a critical role in modern day Credit Enhancements; they
are more effective in (a) off-balance-sheet models creating synthetic collateral,
(b) sovereign ratings' enhancement with built-in asset derivatives and (c) cross
border loans with receivables and counterparties in the domain and jurisdiction
of the monoline insurer. The decision whether to use a monoline insurer or not
often depends upon the cost of such cover vis-a-vis the improvement in pricing
for the loan or bond issue by virtue of such credit enhancement.
Credit ratings
Ratings play an important role in structured finance for instruments that are meant
to be sold to investors. Many mutual funds, governments, and private investors
only buy instruments that have been rated by a known agency, like Moody's or
Standard & Poor's. New rules in the U.S. and Europe have tightened the
requirements for ratings agencies (perhaps in light of previous credit crises).
These are reflected in Europe by a body of regulations relating to the use of credit
agencies
BUSINESS PLAN
A business plan is a formal statement of a set of business goals, the reasons they
are believed attainable, and the plan for reaching those goals. It may also contain
background information about the organization or team attempting to reach those
goals.
Business plans may also target changes in perception and branding by the
customer, client, taxpayer, or larger community. When the existing business is to
assume a major change or when planning a new venture, a 3 to 5 year business
plan is required, since investors will look for their annual return in that timeframe
LITIGATION SERVICES
The essential goal of litigation support is to organize, analyze, and present case
materials through computer systems. In federal criminal defense cases, there are
three primary ways that litigation support is used by Federal Defender Office
(FDO) staff and Criminal Justice Act (CJA) panel attorneys. One is in conducting
electronic courtroom presentations. Another is management and analysis of paper
documents and their electronic equivalents. The third is the
identification, collection, preservation, processing, review, analysis and

production of electronically stored information (ESI).
Litigation support is the marriage of project management and technology. We

believe that while every district is different and every case is unique, there are
certain standards to follow in order to ensure that the data involved in a case is
handled in a cost effective and time efficient manner allowing for good
organization, easy retrieval and effective client representation.
Both federal defender offices and CJA panel attorneys are often faced with the
challenge of limited resources and staffing. Litigation support technology can
help to make up that deficit by allowing data to be intelligently collected,
processed, organized, reviewed, analyzed and presented.
While therebmay not be a single piece of technology address all the challenges
face,the National Litigation support team can help you to navigate through the
process of evaluating your choices and in deiding what solutions best meet the
needs of your case.
CHAPTER-2
EVOLUTION OF INVESTMENT BANKING IN INDIA
The origin of investment banking in India can be traced back to the 19 th century
when European merchant banks set-up their agency houses in the country to assist
in the setting of new projects. In the early 20 th century, large business houses
followed suit by establishing managing agencies which acted as issue house for
securities, promoters for new projects and also provided finance to Greenfield
ventures. The peculiar feature of these agencies was that their services were
restricted only to the companies of the group to which they belonged. A few small
brokers also started rendering Merchant banking services, but theirs was limited
due to their small capital base.
In 1967, ANZ Grind lays bank set - up a separate merchant banking division to
handle new capital issues. It was soon followed by Citibank, which started
rendering these services. The foreign banks monopolized merchant banking
services in the country. The banking committee, in its report in 1972, took note
of this with concern and recommended setting up of merchant banking institutions
by commercial banks and financial intuitions. State bank of India ventured into
this business by starting a merchant banking bureau in 1972. In 1972, ICICI
became the first financial institution to offer merchant banking services. JM
finance was set-up by Mr. Nimesh Kampani as an exclusive merchant bank in
1973. The growth of the industry was very slow during this period. By 1980, the
number of merchant banks rose to 33 and was set-up by commercial banks,
financial institutions and private sector. The capital market witnessed some
buoyancy in the late eighties. The advent of economic reforms in 1991 resulted
in sudden spurt in both the primary and secondary market. Several new players
entered into the field. The securities scam in may, 1992 was a major setback to
the industry. Several leading merchant bankers, both in public and private sector
were found to be involved in various irregularities.
Some of the prominent public sector players involved in the scam were Can bank
financial services, SBI capital markets, Andhra bank financial services, etc.
leading private sector players involved in the scam included Fair growth financial
services and Champaklal investments and finance (CIFCO).
The market turned bullish again in the end of 1993 after the tainted shares
problem was substantially resolved. There was a phenomenal surge of activity in
the primary market. The registration norms with the SEBI were quite liberal. The
low entry barriers coupled with lucrative opportunities lured many new entrants
into this industry. Most of the new entrants were undercapitalized with little or
no expertise in merchant banking. These players could hardly afford to be
discerning and started offering their services to all and sundry clients. The market
was soon flooded with poor quality paper issued by companies of dubious
credentials. The huge losses suffered by investors in these securities resulted in
total loss of confidence in the market. Most of the subsequent issues started
failing and companies started deferring their plans to access primary markets.
Lack of business resulted in a major shake out in the industry. Most of the small
firms exited from the business. Many foreign investment banks started entering
Indian markets. These firms had a huge capital base, global distribution capacity
and expertise. However, they were new to Indian markets and lacked local
penetration. Many of the top rung Indian merchant banks, who had string
domestic base, started entering into joint ventures with the foreign banks. This
energy resulted in synergies as their individual strength complemented each
other.
FUNCTIONS OF INVESTMENT BANKS
Investment bankers play an important role in the issue management process. Lead
managers (category I merchant bankers) have to ensure correctness of the
information furnished in the offer document. They have to ensure compliance
with SEBI rules and regulations as also guidelines for disclosures and investor
protection. To this effect, they are required to submit to SEBI a due diligence
certificate conforming that the disclosures made in the draft prospectus or letter
of offer are true, fair and adequate to enable the prospective investors to make a
well informed investment decision. The role of merchant bankers in performing
their due diligence functions has become even more important with the
strengthening of the disclosure requirements and with the SEBI giving up the
vetting up of prospectus. SEBIs various operational guidelines issued during the
year to merchant bankers primarily addressed the need to enhance the standard
of disclosures.
It was felt that a further strengthening of the criteria for registration of merchant
bankers was necessary, primarily through an increase in the net worth
requirements, so that the capital would be commensurate with the level of
activities undertaken by them. With this in view, the net worth requirement or
category I merchant bankers was raised in 1995-96 to Rs.5 crore. In 1996-96, the
SEBI (merchant bankers) regulations, 1992 were amended to require the payment
of fees for each letter of offer or draft prospectus that is filed with SEBI.
.COLLEGE TYBI INVESTMENT BANKING

CORE INVESTMENT BANKING ACTIVITIES
Investment banking has changed over the years, beginning as a partnership form
focused on underwriting security issuance, i.e. initial public offerings (IPOs) and
secondary offerings, brokerage, and mergers and acquisitions, and evolving into
a "full-service" range including securities research, proprietary trading, and
investment management. In the modern 21st century, the SEC filings of the major
independent investment banks such as Goldman Sachs and Morgan Stanley
reflect three product segments:
(1) Investment banking (fees for M&A advisory services and securities
underwriting);
(2) Asset management (fees for sponsored investment funds), and
(3) Trading and principal investments (broker-dealer activities including

proprietary trading ("dealer" transactions) and brokerage trading ("broker"
transactions).
In the United States, commercial banking and investment banking were separated
by the Glass–Steagall Act, which was repealed in 1999. The repeal led to more
"universal banks" offering an even greater range of services. Many large
commercial banks have therefore developed investment banking divisions
through acquisitions and hiring. Notable large banks with significant investment
banks include JPMorgan Chase, Bank of America, Credit Suisse, Deutsche Bank,
Barclays, and Wells Fargo. After the financial crisis of 2007–2008 and the
subsequent passage of the Dodd-Frank Act of 2010, regulations have limited
certain investment banking operations, notably with the Volcker Rule's

restrictions on proprietary trading.
The traditional service of underwriting security issues has declined as a

percentage of revenue. As far back as 1960, 70% of Merrill Lynch's revenue was
derived from transaction commissions while "traditional investment banking"
services accounted for 5%. However, Merrill Lynch was a relatively "retail-
focused" firm with a large brokerage network.
FRONT OFFICE
Front office is generally described as a revenue generating role.
There are two main areas within front office:
Investment Banking and Markets, which includes: Sales; Trading; Research;

Structuring. Investment Banking involves advising the world's largest
organizations on mergers, acquisitions, as well as a wide array of fund raising
strategies. This is, on average, the most prestigious and highest paid department
in the bank with first year analysts typically making £60,000 upwards (depending
on individual, team and firm performance).
Markets are then split into further divisions; sales, trading, some research and
also structuring. Though the average investment banker will make considerably
more than the average trader, the best trader will make significantly more than
the best investment banker.
INVESTMENT BANKING
Corporate finance is the traditional aspect of investment banks which also

involves helping customers raise funds in capital markets and giving advice on
mergers and acquisitions (M&A). This may involve subscribing investors to a
security issuance, coordinating with bidders, or negotiating with a merger target.

Another term for the investment banking division is corporate finance, and its
advisory group is often termed "mergers and acquisitions". A pitch book of
financial information is generated to market the bank to a potential M&A client;
if the pitch is successful, the bank arranges the deal for the client. The investment
banking division (IBD) is generally divided into industry coverage and product
coverage groups. Industry coverage groups focus on a specific industry – such as
healthcare, public finance (governments), FIG (financial institutions group),
industrials, TMT (technology, media, and telecommunication) – and maintains
relationships with corporations within the industry to bring in business for the
bank. Product coverage groups focus on financial products – such as mergers and
acquisitions, leveraged finance, public finance, asset finance and leasing,
structured finance, restructuring, equity, and high-grade debt – and generally
work and collaborate with industry groups on the more intricate and specialized
needs of a client. The Wall Street Journal, in partnership with Dialogic, publishes
figures on investment banking revenue such as M&A in its Investment Banking
Scorecard.
SALES AND TRADING
On behalf of the bank and its clients, a large investment bank's primary function
is buying and selling products. In market making, traders will buy and sell
financial products with the goal of making money on each trade. Sales is the term
for the investment bank's sales force, whose primary job is to call on institutional
and high-net-worth investors to suggest trading ideas (on a caveat emptor basis)
and take orders. Sales desks then communicate their clients' orders to the
appropriate trading desks, which can price and execute trades, or structure new
products that fit a specific need. Structuring has been a relatively recent activity
as derivatives have come into play, with highly technical and numerate employees
working on creating complex structured products which
typically offer much greater margins and returns than underlying cash securities.
In 2010, investment banks came under pressure as a result of selling complex
derivatives contracts to local municipalities in Europe and the US. Strategists
advise external as well as internal clients on the strategies that can be adopted in
various markets. Ranging from derivatives to specific industries, strategists place
companies and industries in a quantitative framework with full consideration of
the macroeconomic scene. This strategy often affects the way the firm will
operate in the market, the direction it would like to take in terms of its proprietary
and flow positions, the suggestions salespersons give to clients, as well as the
way structures create new products. Banks also undertake risk through
proprietary trading, performed by a special set of traders who do not interface
with clients and through "principal risk"—risk undertaken by a trader after he
buys or sells a product to a client and does not hedge his total exposure. Banks
seek to maximize profitability for a given amount of risk on their balance sheet.
The necessity for numerical ability in sales and trading has created jobs for
physics, computer science, mathematics and engineering Ph.D.’s who act as
quantitative analysts.
RESEARCH
The equity research division reviews companies and writes reports about their
prospects, often with "buy" or "sell" ratings. Investment banks typically have sell-
side analysts which cover various industries. Their sponsored funds or proprietary
trading offices will also have buy-side research. While the research division may
or may not generate revenue (based on policies at different banks), its resources
are used to assist traders in trading, the sales force in suggesting ideas to
customers, and investment bankers by covering their clients. Research also serves
outside clients with investment advice (such as institutional investors and high
net worth individuals) in the hopes that these clients will execute suggested trade
ideas through the sales and trading division of the bank,
and thereby generate revenue for the firm. Research also covers credit research,
fixed income research, macroeconomic research, and quantitative analysis, all of
which are used internally and externally to advise clients but do not directly affect
revenue. All research groups, nonetheless, provide a key service in terms of
advisory and strategy. There is a potential conflict of interest between the
investment bank and its analysis, in that published analysis can affect the bank's
profits.
RISK MANAGEMENT
Risk management involves analyzing the market and credit risk that an
investment bank or its clients take onto their balance sheet during transactions or
trades. Credit risk focuses around capital markets activities, such as loan
syndication, bond issuance, restructuring, and leveraged finance. Market risk
conducts review of sales and trading activities utilizing the VaR model and
provides hedge-fund solutions to portfolio managers. Other risk groups include
country risk, operational risk, and counterparty risks which may or may not exist
on a bank to bank basis. Credit risk solutions are key part of capital market
transactions, involving debt structuring, exit financing, loan amendment, project
finance, leveraged buy-outs, and sometimes portfolio hedging. Front office
market risk activities provide service to investors via derivative solutions,
portfolio management, portfolio consulting, and risk advisory. Well-known risk
groups in JPMorgan Chase, Goldman Sachs and Barclays engage in revenue-
generating activities involving debt structuring, restructuring, loan syndication,
and securitization for clients such as corporates, governments, and hedge funds.
J.P. Morgan IB Risk works with investment banking to execute transactions and
advise investors, although its Finance & Operation risk groups focus on middle
office functions involving internal, non-revenue generating, operational risk
controls. Credit default swap, for instance, is a famous credit risk hedging solution
for clients invented by J.P. Morgan's Blythe Masters during the 1990s.
The Loan Risk Solutions group within Barclays' investment banking division and
Risk Management and Financing group housed in Goldman Sach's securities
division are client-driven franchises. However, risk management groups such as
operational risk, internal risk control, legal risk, and the one at Morgan Stanley
are restrained to internal business functions including firm
balance-sheet risk analysis and assigning trading cap that are independent of
client needs, even though these groups may be responsible for deal approval that
directly affects capital market activities. Risk management is a broad area, and
like research, its roles can be client-facing or internal.
MIDDLE OFFICE
This area of the bank includes treasury management, internal controls, and
internal corporate strategy.
Corporate treasury is 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 the finance
division is the principal adviser to senior management on essential areas such as
controlling the firm's global risk exposure and the profitability and structure of
the firm's various businesses via dedicated trading desk product control teams. In
the United States and United Kingdom, a financial controller is a senior position,
often reporting to the chief financial officer.
Internal corporate strategy tackling firm management and profit strategy, unlike
corporate strategy groups that advise clients, is non-revenue regenerating yet a
key functional role within investment banks.
This list is not a comprehensive summary of all middle-office functions within

an investment bank, as specific desks within front and back offices may
participate in internal functions.
BACK OFFICE
OPERATIONS
This involves data-checking trades that have been conducted, ensuring that they
are not wrong, and transacting the required transfers. Many banks have
outsourced operations. It is, however, a critical part of the bank.
TECHNOLOGY
Every major investment bank has considerable amounts of in-house software,

created by the technology team, who are also responsible for technical support.
Technology has changed considerably in the last few years as more sales and
trading desks are using electronic trading. Some trades are initiated by complex
algorithms for hedging purposes.
Firms are responsible for compliance with government regulations and internal
regulations.
OTHER BUSINESSES
Global transaction banking is the division which provides cash

management, custody services, lending, and securities brokerage services
to institutions. Prime brokerage with hedge funds has been an especially
profitable business, as well as risky, as seen in the "run on the bank" with
Bear Stearns in 2008.
Investment management is the professional management of various

securities (shares, bonds, etc.) and other assets (e.g., real estate), to meet
specified investment goals for the benefit of investors. Investors may be

institutions (insurance companies, pension funds, corporations etc.) or
private investors (both directly via investment contracts and more
commonly via collective investment schemes e.g., mutual funds). The
investment management division of an investment bank is generally
divided into separate groups, often known as private wealth management
and private client services.
Merchant banking can be called "very personal banking"; merchant

banks offer capital in exchange for share ownership rather than loans, and
offer advice on management and strategy. Merchant banking is also a name
used to describe the private equity side of a firm. Current examples include
Defoe Fournier & Cie. and JPMorgan's One Equity Partners and the
original J.P. Morgan & Co. Rothschild’s, Barings, Warburg’s and
Morgan’s were all merchant banks. (Originally, "merchant bank" was the
British English term for an investment bank.)
 
CHAPTER-3
ORGANIZATIONAL STRUCTURE
Investment banking is split into front office, middle office, and back office
activities. While large service investment banks offer all lines of business,
both "sell side" and "buy side", smaller sell-side investment firms such as
boutique investment banks and small broker-dealers focus on investment
banking and sales/trading/research, respectively.
Investment banks offer services to both corporations issuing securities and

investors buying securities. For corporations, investment bankers offer
information on when and how to place their securities on the open market,
an activity very important to an investment bank's reputation. Therefore,
investment bankers play a very important role in issuing new security
offerings
INDUSTRY PROFILE
There are various trade associations throughout the world which represent the
industry in lobbying, facilitate industry standards, and publish statistics. The
International Council of Securities Associations (ICSA) is a global group of trade
associations.
In the United States, the Securities Industry and BANKING INSURANCE

Association (SIFMA) is likely the most significant; however, several of the large
investment banks are members of the American Bankers Association Securities
Association (ABASA)[13] while small investment banks are members of the
National Investment Banking Association (NIBA).
In Europe, the European Forum of Securities Associations was formed in 2007

by various European trade associations. Several European trade associations
(principally the London Investment Banking Association and the European
SIFMA affiliate) combined in 2009 to form Association for BANKING
INSURANCE in Europe (AFME).
In the securities industry in China (particularly mainland China), the Securities
Association of China is a self-regulatory organization whose members are largely
investment banks.
GLOBAL SIZE AND REVENUE MIX
Global investment banking revenue increased for the fifth year running in 2007,
to a record US$84.3 billion, which was up 22% on the previous year and more
than double the level in 2003. Subsequent to their exposure to United States sub-
prime securities investments, many investment banks have experienced
losses. As of late 2012, global revenues for investment banks were estimated at
$240 billion, down about a third from 2009, as companies pursued less deals and
traded less. Differences in total revenue are likely due to different ways of
classifying investment banking revenue, such as subtracting proprietary trading
revenue.
In terms of total revenue, SEC filings of the major independent investment banks
in the United States show that investment banking (defined as M&A advisory
services and security underwriting) only made up about 15-20% of total revenue
for these banks from 1996 to 2006, with the majority of revenue (60+% in some
years) brought in by "trading" which includes brokerage commissions and
proprietary trading; the proprietary trading is estimated to provide a significant
portion of this revenue.
The United States generated 46% of global revenue in 2009, down from 56% in
1999. Europe (with Middle East and Africa) generated about a third while Asian
countries generated the remaining 21%. The industry is heavily concentrated in a
small number of major financial centers, including City of London, New York
City, Frankfurt, Hong Kong and Tokyo.
losses. As of late 2012, global revenues for investment banks were estimated at
$240 billion, down about a third from 2009, as companies pursued less deals and
traded less. Differences in total revenue are likely due to different ways of
classifying investment banking revenue, such as subtracting proprietary trading
revenue.
In terms of total revenue, SEC filings of the major independent investment banks
in the United States show that investment banking (defined as M&A advisory
services and security underwriting) only made up about 15-20% of total revenue
for these banks from 1996 to 2006, with the majority of revenue (60+% in some
years) brought in by "trading" which includes brokerage commissions and
proprietary trading; the proprietary trading is estimated to provide a significant
portion of this revenue.
The United States generated 46% of global revenue in 2009, down from 56% in
1999. Europe (with Middle East and Africa) generated about a third while Asian
countries generated the remaining 21%. The industry is heavily concentrated in a
small number of major financial centers, including City of London, New York
City, Frankfurt, Hong Kong and Tokyo.
According to estimates published by the International Financial Services London,

for the decade prior to the financial crisis in 2008, M&A was a primary source of
investment banking revenue, often accounting for 40% of such revenue, but
dropped during and after the financial crisis. Equity underwriting revenue ranged
from 30% to 38% and fixed-income underwriting accounted for the remaining
revenue.
Revenues have been affected by the introduction of new products with higher
margins; however, these innovations are often copied quickly by competing
banks, pushing down trading margins. For example, brokerages commissions
for bond and equity trading is a commodity business but structuring and trading
derivatives has higher margins because each over-the-counter contract has to be
uniquely structured and could involve complex pay-off and risk profiles. One
growth area is private investment in public equity (PIPEs, otherwise known as
Regulation D or Regulation S). Such transactions are privately negotiated
between companies and accredited investors.
Banks also earned revenue by securitizing debt, particularly mortgage debt prior
to the financial crisis. Investment banks have become concerned that lenders are
securitizing in-house, driving the investment banks to pursue vertical integration
by becoming lenders, which is allowed in the United States since the repeal of
the Glass-Steagall Act in 1999
TOP 10 BANKS
List of investment banks
The ten largest investment banks as of December 31, 2013, are as follows (by
total fees from all advisory). The list is just a ranking of the advisory arm of each
bank and does not include the generally much larger portion of revenues from
sales and trading and asset management.
Rank Company Fees ($m)

1. J.P. Morgan & Co. 6,271.74
2. Bank of America Merrill Lynch 5,685.59
3. Goldman Sachs 5,053.21
4. Morgan Stanley 4,452.88
5. Citigroup 3,952.09
6. Deutsche Bank 3,616.12
7. Credit Suisse 3,545.45

8. Barclays 3,454.73
9. Wells Fargo 2,277.88
10. RBC Capital Markets 2,041.80
World's biggest banks are ranked for M&A advisory, syndicated loans, equity
capital markets and debt capital markets.
The Financial Times, The Wall Street Journal and Bloomberg often cover
mergers and acquisitions and capital markets. League tables are also available:
Investment Banking Review, The Financial Times.

Investment Banking Scorecard, The Wall Street Journal.
Global M&A Financial Advisory Rankings, Bloomberg.
 Global Capital Markets League Tables, Bloomberg.



































 B.COM(BANKING INSURANCE ) 39 | P a g e
FINANCIAL CRISIS OF 2008
The 2008 financial credit crisis led to the notable collapse of several banks,
notably including the bankruptcy of large investment bank Lehman Brothers and
the hurried sale of Merrill Lynch and the much smaller Bear Stearns to banks
which effectively rescued them from bankruptcy. The entire financial services
industry, including numerous investment banks, was rescued by government
loans through the Troubled Asset Relief Program (TARP). Surviving U.S.
investment banks such as Goldman Sachs and Morgan Stanley converted to
traditional bank holding companies to accept TARP relief. Similar situations
occurred across the globe with countries rescuing their banking industry. Initially,
banks received part of a $700 billion TARP intended to stabilize the economy
and thaw the frozen credit markets. Eventually, taxpayer assistance to banks
reached nearly $13 trillion, most without much scrutiny, lending did not increase
and credit markets remained frozen.
The crisis led to questioning of the business model of the investment bank without
the regulation imposed on it by Glass-Steagall. Once Robert Rubin, a former co-
chairman of Goldman Sachs, became part of the Clinton administration and
deregulated banks, the previous conservatism of underwriting established
companies and seeking long-term gains was replaced by lower standards and
short-term profit. Formerly, the guidelines said that in order to take a company
public, it had to be in business for a minimum of five years and it had to show
profitability for three consecutive years. After deregulation, those standards were
gone, but small investors did not grasp the full impact of the change.
A number of former Goldman-Sachs top executives, such as Henry Paulson and

Ed Liddy were in high-level positions in government and oversaw the
controversial taxpayer-funded bank bailout. The TARP Oversight Report

released by the Congressional Oversight Panel found that the bailout tended to
encourage risky behavior and "corrupted the fundamental tenets of a market
economy".
Under threat of a subpoena, Goldman Sachs revealed that it received $12.9 billion
in taxpayer aid, $4.3 billion of which was then paid out to 32 entities, including
many overseas banks, hedge funds and pensions. The same year it received $10
billion in aid from the government, it also paid out multi-million dollar bonuses;
the total paid in bonuses was $4.82 billion. Similarly, Morgan Stanley received
$10 billion in TARP funds and paid out $4.475 billion in bonuses.
CHAPTER-4
MAJOR INVESTMENT BANKS IN INDIA
An investment bank is a financial institution that assists individuals,

Corporations and governments in raising capital by underwriting and/or acting
as the client’s agent in the issuance of securities eg: IPO/ FPO work is handled
by investment banks. An investment bank also assist companies in mergers and
acquisitions, and provide ancillary services such as market making, trading of
derivatives, fixed income instruments, foreign exchange, commodities, and
equity securities.
The following is the list of major indian investment banks based out of India.
Avendus
Avendus is an investment bank based in India with offices in Mumbai and
Bangalore. The firm was founded in 1999 by three investment bankers Ranu
Vohra, Gaurav Deepak and Kaushal Kumar, who had worked for large
global financial institutions and wanted to offer knowledge and research
oriented capital raising and M&A solutions to international firms with a
strong India connection.
Website url : http://www.avendus.com
Bajaj Capital
Bajaj Capital’s Investment Banking Service is a step ahead in that direction.
Bajaj Capital offers you unparalleled capital raising solutions for your business.
With over 120 offices in 50 cities all over the country and a network of over
10,000 Advisor Associates, we can connect you to potential investors all over
the country.
Website url : http://www.bajajcapital.com
Barclays India
Barclays unveiled its Global Retail and Commercial Banking division in India
over the past year as part of its plan to be a leading global bank. In a very
short time, Barclays is already making waves in one of the world’s fastest
growing countries.
web site url : http://www.barclays.in
Cholamandalam Investment & Finance Company

Cholamandalam Investment & Finance Company Limited is the financial
services arm of the USD 880 million Murugappa Group. Incorporated in 1978,
it is one of the leading Financial Services Company in the country. The
products and services include vehicle finance, capital market finance, mutual
funds, securities broking, depository services, and insurance and distribution
services. web site url : http://www.cholamandalam.com/
ICICI Securities Ltd

A subsidiary of ICICI Bank – the largest and most recognized private bank in
India ICICI Securities Ltd is premier Indian Investment Bank, with a
dominant position in its core segments of its operations – Corporate Finance
including Equity Capital Markets Advisory Services, Institutional Equities,
Retail and Financial Product Distribution.
Website url : http://www.icicisecurities.com/
ICRA Limited
ICRA Limited (an Associate of Moody’s Investors Service) was incorporated
in 1991 as an independent and professional company. ICRA is a leading
provider of investment information and credit rating services in India. ICRA’s
major shareholders include Moody’s Investors Service and leading Indian
financial institutions and banks.
Website url : http://www.icra.in
IDFC
IDFC’s mission is to be the financier and advisor of choice for infrastructure
in India. IDFC is positioned as a special financial institution which is focused
on project finance and investment banking activities in infrastructure. Going
forward, IDFC will focus on establishing stable fee revenues from innovative
infrastructure initiatives in BANKING INSURANCE, asset management,
project development and advisory along with growing its balance sheet at a
significant pace.
Website url : http://www.idfc.com/
IDFC Private Equity.

IDFC Private Equity (IDFC PE) was set up in 2002 as a 100% subsidiary of
the Infrastructure Development Finance Company (IDFC). IDFC PE manages
two funds with a current corpus of INR 1,734 crore (USD 400 million). – India
Development Fund and IDFC Private Equity Fund II. Both these funds provide
growth capital to promising enterprises in the area of infrastructure in India.
web site url : http://www.idfcpe.com/
Industrial Development Bank of India

The Industrial Development Bank of India (IDBI) was established in 1964 under
an Act of Parliament. It was initially set up as a wholly owned subsidiary of the
Reserve Bank of India (RBI) with a mandate of providing credit and other
facilities for balanced industrial development. In 1976, the ownership of IDBI
was transferred to the Government of India and it was accorded the status of
principal financial institution in the country for co-ordinating the working of
institutions, engaged in financing, promoting and developing industry, and also
assisting in the development of such institutions. Following amendment to IDBI
Act in October 1994 to permit public ownership up to 49% of its issued capital,
IDBI went in for a public issue in July 1995. The shareholding of Government
of India in IDBI currently stands at 58.47%. web site url : http://www.idbi.com/
Industrial Finance Corporation of India (IFCI)

IFCI, the first Development Finance Institution in India, was set up in 1948, as a
Statutory Corporation, to pioneer institutional credit to medium and large
industries IFCI was also the first institution in the financial sector to be
converted into a Public Limited Company. IFCI’s record of performance has
broadly run parallel to the course of industrial and economic development of the
nation. IFCI’s principal operations include – Project financing, Financial
services & Comprehensive corporate advisory services. web site url :
http://www.ifciltd.com/
Kotak Investing Banking

Kotak Mahindra Capital Company (KMCC) helps leading Indian corporations,
banks, financial institutions and government companies access domestic and
international capital markets. KMCC has the most current understanding of
investor appetite, having been the leading book runner/lead manager in public
equity offerings in the period FY 2002-06.

web site url : http://www.kmcc.co.in
Kotak Mahindra Capital Company

As a full service Investment Bank, Kotak Investment Banking’s core business
areas include Equity Issuances, Mergers & Acquisitions, Advisory Services and
Fixed Income Securities and Principal Business. web site url :
http://www.kmcc.co.in/
SBI Capital Markets

SBI Capital Markets Ltd. is amongst the oldest players in the Indian Capital
Market, offering an entire range of Investment Banking Services. With
strong fund mobilization strengths, we are one of the leading players in the
areas of fund raising through Capital Market Issues / Private Placement. web
site url : http://www.sbicaps.com/
S.E Investments Limited

SEIL’s philosophy on corporate governance envisages commitment to ensure
customer satisfaction through better services. The company is committed to
good corporate governance & continuously reviews various relationship
measures with a view to enhance shareholder’s value. SEILprovides detailed
information on various issues concerning the company’s business and financial
performance. SEIL respects the rights of its share holders to information on
performance of the company and believes that the best corporate governance
promotes transparency and helps mitigate the risks associated with the
business. web site url : http://www.seil.in
Small Industries Development Bank of India

Small Industries Development Bank of India (SIDBI) was established in April
1990 under an Act of Indian Parliament. SIDBI has completed 12 years of
service to the small scale sector. Consequent upon, amendment in the SIDBI Act,
the Bank has been delinked from SIDBI with effect from March 27, 2000.
The SIDBI (Amendment) Act, 2000 has changed the provisions relating to
capital structure, share holding pattern, management, business, borrowings,
etc. The amended Act provides for divesting of 51% of the equity share capital
of Rs.4.5 billion Subscribed and held by IDBI in favour of Life Insurance
Corporation of India, General Insurance Corporation of India, Public Sector
Banks and other Institutions owned or controlled by the Government of India.
web site url : http://www.sidbi.com/
SSKI Group
SSKI is a leading India-based financial services group that offers Institutional
Equities and Investment Banking services. SSKI Investment Banking is a full-
service investment bank with a strong research bias. Our team members bring
deep domain knowledge, spanning a number of sectors, that we are able to
leverage to meet the varied corporate finance needs of our clients. We provide a
full range of services, from private placements of equity and debt, public
offerings, project advisory to mergers and acquisitions. web site url :
http://www.sski.co.in/
Tata Investment Corporation Limited (TICL)

TICL is a non-banking financial company (NBFC) registered with the Reserve
Bank of India under the ‘Investment Company’ category. The company’s
activities comprise primarily of investing in long-term investments in equity
shares and other securities of companies in a wide range of industries. The
major sources of income for the company consist of dividend income and
profit on sale of investments.
web site url : http://www.tata.com/tata_investment/
UTI Securities Ltd

UTI Securities Ltd., was promoted as an independant professional entity in
June 1994. With the repealing of Unit Trust of India (UTI) Act, the entire share
capital of UTISEL is now held by Administrator of specified undertaking of
Unit Trust of India since 1st February 2003. UTISEL has been providing all
kinds of Investment related activities which include investment banking and
corporate advisory services.
web site url : http://www.usectrade.com/
Yes Bank
Yes Bank’s Investment Banking group is involved in the identification,
structuring and execution of transactions for our clients in diverse industries and
geographies. Some of the typical transactions include mergers & acquisitions,
divestitures, private equity syndication and IPO advisory.
CONCLUSION
The investment banker plays a vital role in channelizing the financial surplus of
the society into productive investment avenues. Hence before selecting a
investment banker, one must decide what the services for which he is being
approached are. Selecting the right Intermediary who has the necessary skills to
meet the requirements of the client will ensure success.
It can be said that this project helped me to understand every details about
Investment Banking and in future how it’s going to get emerged in the Indian
economy. Hence, Investment Banking can be considered as essential financial
body in Indian financial system.
Market development is predicated on a sound, fair and transparent regulatory

framework. To sustain the growth of the market and crystallize the growing
awareness and interest into a committed, discerning and growing awareness and
interest into an essential to remove the trading malpractice and structural
inadequacies prevailing in the market, and provide the investors an organized,
well regulated market place in future.
BIBLIOGRAPHY
PRINCIPLES OF INVESTMENT – VIPUL PRAKASHAN
WEBILOGRAPHY
www.economictimes.com
www.wikipedia.com
www.sebi.com
www.managementparadise.com
www.scribd.com
www.indiastat.com
www.jpmorgan.com
www.wallstreetprep.com/knowledge/about-investment-banking
www.investopedia.com
  
 www.morganstanley.com




























University of Mumbai Project On: TOPIC NAME

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

University of Mumbai Project On: TOPIC NAME

Hochgeladen von

Copyright:

Verfügbare Formate

UNIVERSITY OF MUMBAI

MAHARSHI DAYANAND COLLEGE OF ARTS, SCIENCE & COMMERCE PAREL,

This is to certify that MISS/MR. ***YOUR NAME*** of B.Com (Banking &

Course Coordinator Principal

Project Guide/Internal Examiner External Examiner

I am MISS/MR. ***YOUR NAME***. The student of B. com (Banking &

MISS/MR. ***YOUR NAME***.

SR NO TOPIC PAGE NUMBER

1.2 Definition of Investment Banking 4

1.3 The History of Investment Banking

1.4 Credit Enchanement, Business Plan, Litigation

2.2 Function of Investment Banking

2.3 Core Investment Banking Activites

2.4 Front Off

1.2 Definition of Investment Banking

1.3 The History of Investment Banking

1.4 Credit Enchanement , Business Plan, Litigation Services

2.2 Function of Investment Banking

2.3 Core Investment Banking Activites

2.4 Front Office,Middle Office and Back Office

3.2 Industry Profile

3.3 Top 10 Banks

3.4 Financial crisis of 2008

An investment bank is a financial institution that assists individuals,

There are two main lines of business in investment banking.

The "buy side" involves the provision of advice to institutions concerned

Sales and trading

Definition of 'Investment Banking’

THE HISTORY OF INVESTMENT BANKING

Undoubtedly, investment banking as an industry in the United States has come

services (i.e., to prevent the temptation by an investment bank to knowingly

In light of the repeal of negotiated rates in 1975, trading commissions collapsed

Vanities” and movie-maker Oliver Stone in “Wall Street” focused on investment

The enactment of the Gramm-Leach-Bliley Act (GLBA) in November 1999

identification, collection, preservation, processing, review, analysis and

Litigation support is the marriage of project management and technology. We

EVOLUTION OF INVESTMENT BANKING IN INDIA

FUNCTIONS OF INVESTMENT BANKS

.COLLEGE TYBI INVESTMENT BANKING

CORE INVESTMENT BANKING ACTIVITIES

(2) Asset management (fees for sponsored investment funds), and

(3) Trading and principal investments (broker-dealer activities including

certain investment banking operations, notably with the Volcker Rule's

The traditional service of underwriting security issues has declined as a

Front office is generally described as a revenue generating role.

There are two main areas within front office:

Investment Banking and Markets, which includes: Sales; Trading; Research;

Corporate finance is the traditional aspect of investment banks which also

security issuance, coordinating with bidders, or negotiating with a merger target.

SALES AND TRADING

Corporate treasury is responsible for an investment bank's funding, capital

This list is not a comprehensive summary of all middle-office functions within

Every major investment bank has considerable amounts of in-house software,

Global transaction banking is the division which provides cash

Investment management is the professional management of various

specified investment goals for the benefit of investors. Investors may be

Merchant banking can be called "very personal banking"; merchant

Investment banks offer services to both corporations issuing securities and

In the United States, the Securities Industry and BANKING INSURANCE

In Europe, the European Forum of Securities Associations was formed in 2007

GLOBAL SIZE AND REVENUE MIX

According to estimates published by the International Financial Services London,

This is to certify that MISS/MR. YOUR NAME of B.Com (Banking &

I am MISS/MR. YOUR NAME. The student of B. com (Banking &

MISS/MR. YOUR NAME.