DSE I: MDF 604: INVESTMENT BANKING AND FINANCIAL SERVICES
Course Objectives:
The objective of this paper is to know the different aspects of Investment banking and
financial services such as Issue Management, Leasing, Hire Purchase, Factoring and
Forfaiting, Insurance, Credit Rating, Securitization and Venture Capital Financing, Mergers
and acquisition and the detailed SEBI guidelines on issue management.
Learning Outcomes:
Understand the importance and relevance of Investment Bankers in any Financial
System.
Understand the entire process of raising funds from primary markets along with the
concerned regulations applicable in India.
Understand the various financial services available in financial markets particularly in
India along with the latest innovations and technological integration in the field of
finance.
Course Contents:
Unit 1 (2 Weeks)
Introduction: An Overview of Indian Financial System, Investment Banking in India, Recent
Developments and Challenges ahead, Institutional structure and Functions of Investment /
Merchant Banking; SEBI guidelines for Merchant Bankers, Registration, obligations and
responsibilities of Lead Managers, Regulations regarding Continuance of association of lead
manager with an issue
References:
Khan M.Y. Financial Services, 7th edition (Chapter 13)
Website of SEBI and RBI
Unit II (3 Weeks)
Issue Management: Public Issue: classification of companies, eligibility, issue pricing,
minimum public offer, prospectus, allotment, preferential allotment,
private placement, Book Building process, designing and pricing, Green Shoe Option; Right
document, Bought out Deals, Post issue work & obligations, Investor protection, Broker, sub
broker and underwriters.
INVESTMENT BANKING AND FINANCIAL SERVICES
References:
Khan M.Y. Financial Services, 7th edition (Chapter 14)
Machiraju, H. R .(2019) Indian financial system New Delhi, S.Chand P:ublishing House, 5th
ed (Chapter 12,13 and 14)
Website of SEBI and RBI
Unit III (3 Weeks)
Leasing and Hire Purchase :Concepts of leasing, types of leasing financial & operating
lease, direct lease and sales & lease back, advantages and limitations of leasing, Lease rental
alment, difference between
Hire Purchase & Leasing, Choice criteria between Leasing and Hire Purchase, mathematics of
HP, Factoring, Forfaiting and its arrangement, Housing Finance : Meaning and rise of housing
finance in India, floating vs. fixed rate.
References:
Khan M.Y. Financial Services, 7th edition (Chapter 4,5,6 and 8)
Website of SEBI and RBI and othder felated we cources
Unit IV (4 Weeks)
Venture Capital: Concept, history and evolution of VC, the venture investment process,
various steps in venture financing, incubation financing. Insurance: concept, classification,
principles of insurance, IRDA and different regulatory norms, operation of General Insurance,
Health Insurance, Life Insurance. Credit Ratings: Introduction, types of credit rating,
advantages and disadvantages of credit ratings, Credit rating agencies and their methodology,
International credit rating practices. Securitization: Concept and Process, Credit Enhancement
parties to a Securitization Transaction, Instruments of Securitization, Types of Securities,
Securitization in India.
Mergers and Acquisitions Introduction of mergers and acquisitions, benefits of mergers, the
procedure and theories of mergers, acquisitions and takeovers in India and anti-takeover
strategies.
References:
Khan M.Y. Financial Services, 7th edition (Chapter 8,9,10 and 17)
Website of SEBI and RBI
INVESTMENT BANKING AND FINANCIAL SERVICES
Text Books:
1. Khan, M. Y. (2013). Financial services. New Delhi: McGraw Hill Education.
2. Machiraju, H. R. (2002). Indian financial system. New Delhi, Vikas Publication House
Additional Readings:
1. Verma, J. C. (1996). Bharats manual of merchant banking: Concept, practices and
procedures with SEBI clarifications, guidelines, rules and regulations. New Delhi: Bharat
Law House.
2. K.Sriram: Hand Book of Leasing, Hire Purchase & Factoring, ICFAI, Hyderabad.
3. Ennew.C.Trevor Watkins & Mike Wright: Marketing of Financial Services, Heinemann
Professional
Teaching Learning Process:
Lecture, discussion, PowerPoint presentations, demonstration of live trading.
Course contents may be discussed in the light of latest SEBI regulations and RBI guidelines.
Website of SEBI, RBI, BSE and NSE must be referred to for any amendment in the
guidelines.
Assessment Methods:
Internal Assessment: 25 marks
Written Theory Exam: 75 marks
Keywords:
SEBI guidelines, Public Issue, Private Placement, Book Building, Leasing, Hire Purchase,
Factoring, IRDA, Credit Ratings, Securitization, Mergers and Acquisitions.
