Investment banking

Investment Banking

I NTRODUCTION

‘Investment Banking’ as the term suggests, is concerned with the primary

function of assisting the capital market in its function of capital market

intermediation, i.e. the movement of financial resources from those who

have them means investors, to those who need to make use of them

means issuer for generating profit. Banking & financial institutions on the

one hand & capital market on the other hand are two broad Platforms of

institutional intermediation for capital flows in the economy. Therefore, it

could be inferred that investment banks are those institutions that are the

counterparts of banks in the capital market in the function of

intermediation in resources allocation. Investment banks carried on

various activities it helps companies and governments and their agencies

to raise money by issuing and selling securities in the primary market.

They assist public and private corporations in raising funds in the capital

markets both equity and debt, as well as in providing strategic advisory

services for expansion acquisitions, mergers and other types of financial

transactions.

Investment banking is much wider term than merchant banking as it

implies significant fund based exposure to the capital market.

Internationally, investment banking have progressed both in fund based &

fee based segments of industry. In India, the dependence is heavily on

merchant banking, more particularly with issue management &

underwriting. However downturn in primary market has forced merchant

banks to diversify & become full fledged investment banks. Over the

decades, backed by evolution & also fuelled by recent technological

developments, investment banking has transformed repeatedly to suit the

needs of the finance community & thus become one of the vibrant &

exciting segments of financial services. The future for investment banks

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Investment Banking

is bright with scope for merchant banks to convert themselves into

investment banks. Much of the investment banking in its present form,

thus owes its origins to the financial market in U.S.A due to which,

American investment banks have been leader in the American & Euro

market as well. Therefore, the term ‘investment banking’ can be said to

be American origin. Their counterparts in U.K were termed as ‘merchant

banks’ since they had confined themselves to capital market

intermediation until the U.K & European markets & extended the scope

of such businesses.

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Investment Banking

TYPES OF PLAYERS IN INVESTMENT BANKING

Full-Service Firms- These are type of investment banks who have

significant presence in all areas like underwriting, distribution, M&A,

brokerage, structured instruments, asset management etc. They are all

rounder 0f the game.

Commercial Banks- Commercial Banks operating through “Section 20”

subsidiaries referring to the subsidiaries formed under section 20 of the

Glass- Steagall Act which were allowed to carry on limited investment

banking services.

Boutique Firms-These are the type of players which specialist in

particular areas of investment banking.

Brokerage Firms- These firms offers only trading services to retail &

institutional clients. They have huge investor base which is also used by

underwriters to place issues.

Asset Management Firms- These firms offer on investment services.

This includes activities like fund management, wealth management, cash

management, portfolio management depending on the type of investors,

tenure of corpus, purpose of investments, type of instrument invested in

etc.

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Investment Banking

STRUCTURE OF INDIAN INVESTMENT BANKING INDUSTRY

Investment banking in India has evolved in its own characteristic

structure over the years both due to business realities & the regulatory

regime.

On the regulatory front, the Indian regulatory regime does not allow all

investment banking functions to be performed under the entity for two

reasons-

(a- To prevent excessive exposure to business risk under the one entity.

(b-To prescribe & monitor capital adequacy & risk management

mechanisms.

-Therefore bankruptcy remoteness is the key feature in structuring the

business lines of an investment bank so hat the risk & rewards are defined

for the investors who provide resources to the investment banks.

- In addition, the capital adequacy requirements & leveraging capability

for each business have been prescribed differently under relevant

provisions of law.

- Therefore, Indian investment banks structure their segments in different

corporate entities to able to meet regulatory norms. For e.g. it is desirable

to have merchant banking in separate company as it requires a separate

merchant banking license from the SEBI. However, since banks are

subject to the Banking Regulation Act, they cannot perform investment

banking to a large extent on the same balance sheet. Asset management

business in the form of mutual fund requires a three-tier structure under

the SEBI regulations. Equity research should be independent of the

merchant banking business so as to avoid the kind of conflict of interest.

Stock broking has to be separated into a different company as it requires a

stock exchange membership apart from SEBI registration.

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Investment Banking

- The Indian investment banking industry has a heterogeneous structure.

The bigger investment banks have several group entities in which the

core & non- core business segments are distributed. Others have either

one or more entities depending upon the activity profile. The

heterogeneous & fragmented structure even if Indian investment banks

are classified on the basis of their activity profile. Some of such as-

SBI,IDBI, ICICI, IL & FS, Kotak Mahindra, Citibank & other offer

almost whole of investment banking services permitted in India. Among

these, the long term financial institutions transforming themselves into

full service universal banks. They also have full service investment

banking under their fold. Other entities such as NBFCs or subsidiary of

public sector banks mainly offer merchant banking & corporate advisory

services. There are also several others who are providing only corporate

advisory services but prefer to hold merchant banking or underwriting.

- Presently, there are no global Indian investment banks although there is

a number of investment banks in India that have some overseas presence

to serve Indian issuers & their investors. At the middle level are several

niche players including the merchant banking subsidiaries of some public

sectors banks. Some of these subsidiaries have been either shut down or

sold off in the wake of the securities scams.

- However certain banks such as Canara Bank & Punjab National Bank

have had successful merchant banking activities. Among the middle level

players are also merchant banks structured as non- banking financial

services companies such as Rabo India Finance Ltd., Alpic Finance etc.

There are also in the middle level, some pure advisory firms such as-

Lazard Capital, Ernst & Young, KPMG, Price waterhouse coopers etc. At

the lower end are several niche players & boutique firms, which focus on

one or more segments of the investment banking spectrum.

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Investment Banking

POTENTIAL FOR INVESTMENT BANKING IN INDIA

The bane of Indian capital market today is lack of investor confidence.

This is reflected in the poor performance of both primary & secondary

markets. The causes for existing situation are many but primarily arise on

account of lack of liquidity, unscrupulous issuers & merchant bankers &

poor or unappraised issues. Investment banking can solve this problem

because investor would be dealing with reputed investment banker in the

primary market rather than unknown issuers. The investment banks

whatever be their issue management techniques have their own capital on

hold. The issues are likely to be properly appraised & priced & sponsors

on OTCEI have a two year lock-in period. Similarly investment banks

would hold the issues until market conditions are appropriate for issue,

thus reducing the risk exposure of investors in gestation for issue.

Moreover, the price of reissue will be a better indicator of issue’s

performance. Investment banks make the primary market subscription. In

sum, the quality of pricing, appraisal, & primary market functions will

improve resulting in substantial improvement in investor confidence.

Since the investment banker lends its name to the issue it will imply an

issue investors can trust. Investment bankers may gradually replace

merchant bankers in India.

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Investment Banking

SERVICE PORTFOLIO OF INVESTMENT BANKS

Investment banks handle significant fund-based business of their own in

capital market along with non-fund service portfolio which is offered to

clients. All this activities are segmented across three broad platforms –

equity market activity, debt market activity & mergers & acquisition

activity. Investment banks differ in the way they conduct their activities.

These differences may arise due to their evolution, strategies & the way

the strategies are implemented. Other factors that can influence

investment banking operations are as follows:-

Wide & narrow geographical presence like global & local firms.

Extent of integration between the activities.

Inter relationships between activities of relates industries. E.g. As

those between commercial banks & investment banking industries.

The activities of an investment banks depend upon the service provided.

The services provided by an investment bank can be broadly given

below~

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Investment Banking

CORE SERVICE PORTFOLIO

Non- Fund Based Fund Based

Merchant Banking Service for

Management of public offers of equity & debt instruments. Buy back offers. Book-running Advisory & transaction service in Project financing, Syndicate loan Venture capital Private equity Private placements of equity & debt Business advisory & structuring Financial restructuring Corporate reorganizations such as Merger & acquisition, asset sales, sell-off & exit etc. Acquisition & takeovers Government disinvestments &

privatization Asset recovery agency services

Underwriting Market making Bought out deals Investment in primary

market

SUPPORT ACTIVITY PORTFOLIO

Non Fund Based

Secondary market services

Stock broking

Derivative product

Portfolio Management

Sales & distribution

Equity research

Fund Based

Venture capital

Private equity

Asset management

Proprietary trading & dealing in securities.

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Investment Banking

Issue of securities, underwriting & merchant banking

Investment banks play a vital role in primary market. They are

responsible for finding investors for initial public offering of securities in

primary market. By bringing the buyers & sellers together, they create a

market. Such sales can take the form of best offers or agency

arrangement. Best offer activity is resorted to in the case of either new or

small companies in whose case of either new or small companies in

whose case underwriting would be risky or established & popular

companies whose issues are enthusiastically received. Investment bankers

may also help as a finder for private placement of securities with

institutions. They also purchase new issues from security issuers &

arrange for their resale to the investing public. Investment bankers buy

the new issue at an agreed price & hope to resell it at a higher price. In

this capacity they are said to underwriter, or guarantee, an issue. A group

of investment bankers join together to underwriting syndicate. The

commission received by the investment bankers consist of differential or

spread between purchase & resale prices. The underwriting risk would be

that the issue may not attract buyer at positive differential. Investment

banks put its effort in managing & placement of an issue. Investment

banks helps in issue by helping in deciding type of security, size of the

issue according to the financial requirement of the issuer. It also helps in

deciding time, pricing of issue which is one of the important aspects of

success of the issue. Investment banks help in listing of issue, issue of

prospectus underwriting of issue etc.

The primary market which was quite small in India was revitalized with

the abolition of the Capital Issuers (control) Act 1947 & the passing of

the Securities & Exchange Board of India Act, 1992. The SEBI functions

as the regulator for the capital markets similar to its counterpart, the SEC

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Investment Banking

in USA. SEBI vide its guidelines dated June 11, 1992 introduced free

pricing of securities in public offers for the first time in India. The

purpose of this law is to require security issuers to fully disclose all

information that affects the value of their securities. Over the last ten

years, there have been two distinct phases of primary market boom- the

first between 1992-1996 & the second between 1998-2001. The third

wave of the primary market issuers could be shape up in near future. This

market is very closely regulated by SEBI. In the days when the public

offers market is very vibrant, this area of service forms the main activity

for investment banks. In the past few years, through public offers have

been very few, the private placement market, especially in the debt

segment have been very active & has served as an important source of

funds for prime rated corporate. Once the private placement markets also

come under regulatory stipulations, investment banks would have a wider

role to play in such issuances.

Mergers & Acquisitions Advisory

The merger & acquisitions industry was pretty nascent in India prior to

1994 & continues to be tiny compared to the global scale transactions.

However, two main factors that given below given a big push to this

industry are:

The forces of liberalization & globalization that have forced the Indian

industry to consolidate.

The intitutionalisation of corporate acquisitions by SEBI through its

guidelines, popularly known as the Takeover Code.

One of the cream activities of investment banks has always been M&A

advisory. The larger investment banks specialize in M&A as a core

activity. While some of them provide pure advisory services in relation

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Investment Banking

M&A, other valid merchant banking licences from SEBI also manage the

open offers arising out of such corporate events.

The investment bankers play the role of an advisor in M&A deal. The

financing capability of the investment banks is beginning to play a crucial

role in securing the goal. Those firms that have networks with banks &

other financial institutions & thereby can provide finance or have

necessary resources to finance the deal themselves a better chance of

success of deal. Investment banks thus helps in finding a buyer/seller, in

working out the terms of the transaction, financing the structure,

arranging bridge loans. It is necessary that the M&A group keep a close

watch on the various industries, companies in order to identify the

potential M&A candidate. Similarly, close relationship with the securities

research people, traders also help to identify the companies vulnerable to

takeovers. The task of doing M&A deals begins with analyzing &

structuring the transaction. This comprises of analyzing the companies

that offer attractive strengthening or diversification possibilities & then

which among these could be purchased. The M&A group will value the

prospect companies & estimate what price will have to be paid to acquire

them. Once the target for the merger or acquisition is identified, the banks

would advice the firms on how to approach for that. Financing is the final

aspect in structuring an M&A. The form of financing includes cash,

common stocks, preferred stocks or debt or convertible securities. When

these negotiations reach to a point agreement, the investment banks of the

parties must ensure that all the regulatory & legal aspects of the deal are

complied with. Thus investment bankers act as chain for companies.

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Investment Banking

Asset management services

This is a service provided by investment banks to local fund managers for

cross border settlement & administration. It involves receipt of dividends

& interest, subscribing to the right issues & adjusting portfolio. Asset

management is the unglamorous aspect of investment banking, the

prosaic bank office work of settling traders, making payments, keeping

records & such related tasks. Investment banks provide this service for a

fee to investors such as mutual funds, pension fund & insurance

companies, enabling fund managers to buy & sell securities at home &

abroad. It is a hi-tech, hi-volume, low margin business, revolutionized by

advances in computer technology & information exchanges.

Asset management services are growing at the rate 15-20%. The primary

reason for such growth is the growing need to diversify beyond domestic

markets to reduce risk & boost returns. Custody fees are based on the

value of assets under consideration. This increased competition, banks

fees are falling to levels insufficient to cover operating expenses. This

leads to diminishing interest in custody services. Most of the top financial

group in India which investment banking businesses such as the –ICICI,

the IDBI, Kotak Mahindra, DSP Merrill Lynch, JM Morgan Stanley, SBI

also have presence in the asset management business through separate

entities. As per the three structure propounded by SEBI, the parent

organization acts as the sponsor of the fund & the fund itself is

constituted as a trust.

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Investment Banking

Secondary market activities

Investment banks also indulge in proprietary trading. Some investment

banks have proprietary trading desks which take risk on of institution’s

behalf, based on a view of economic & market perceptions &

expectations. The trader in securities or derivatives for the account of the

firm itself rather than on behalf of it’s clients. Proprietary trader tends to

take decisions based on detailed technical & fundamental research,

analytic calculations & time series forecasting. The banks incur profit out

of the price movement in the market. Secondly, as a market maker the

trader investment banks take position in the market through purchase &

sale of equities, debt & other securities, execute the customer orders &

manage the customers, institution’s market risk. Investment banks

perform the following functions:-

The traders of investment banks help in making market. The traders

maintain a position in the stock that their firms has underwritten,

quote the bid & ask prices & sell at those price.

Advise the salespeople, client & research analysts on the market

activity & pricing for different equity issues.

Put major trades together by negotiating with the salespeople, client &

the other dealers.

Manage the firm’s investment risks.

Develop a sound knowledge about the markets, companies & the

industries.

The commonly traded securities by investment banks include the

sovereign securities, equities, money market instruments, investment

grade corporate debt, high yield debt, derivatives, mortgages, etc.

Most of the universal banks such as ICICI & IDBI & Kotak Mahindra

have their broking & distribution firms in both the equity & debt

segments of secondary market. In addition several other investment banks

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such ad JM Morgan Stanley, DSP Merrill Lynch have a strong presence

in this area of activity. In the past few years, the derivative segment has

been introduced in the Indian capital market & this provides an additional

avenue of specialization for investment banks. Derivative trading, & risk

management & structured product offerings are the new segments that are

fast becoming the areas of future potential for Indian Investment banks.

The securities business also provides extensive research offerings &

guidance to investors. The secondary market services cater to the both the

institutional & non- institutional investors.

Full service brokers & Discount brokers

Investment banks act as Full service brokers & Discount brokers.

Full service brokers provide a whole range of services, including

giving specific investment advice. They keep close tracks of the

markets & keep the client abreast of opportunities that suit their

objective. They also offer detailed about the clients financial picture,

structure & monitor the assets, make recommendations about

investments & implement the transactions about investments &

implement the transactions as required. A full service brokerage

therefore suits those investors who do not have the time to watch the

markets.

Discount brokers are called so because they generally charge lower

fees than the full service brokers do. Investors who like to do their

own research & make their own decisions use discount brokers.

Discount brokers offer little or no advice & merely execute the

transaction as ordered.

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Investment Banking

Sales & Distribution

In the present scenario, the financing needs are immense for both

corporates & governments, while the investment managers are constantly

on the lookout for optimal allocation of funds for optimal Returns. The

link between the two is filled by investment banks, in particular, by the

sales & Distribution operations. Sales & Distribution bring together the

primary issuers & secondary sellers with the buyer of the instruments.

These could be equity, fixed income instruments.

In general, there could be two product categories:

Institutional sales group

Retail segment

Institutional segment

The salespersons at the investment banks have counterparts at the

institutions. These ‘counterparts’ are normally referred to as buy- side

analysts or portfolio managers. If the investment bank’s analyst is

respected, they also act as sell-side analyst, as a part of investment

decision.

Retail segment

Investment bank’s act as an advisor to his clients. He is more multi-

market oriented & can recommend stocks as well as bond unlike

specialists in the institutional product group. The success of a salesperson

reflects not just in his selling abilities, but also his ability to fulfill client

expectation

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Investment Banking

Research

The research operations of an investment bank are concerned with

studying the economic trends, industry developments, & individual

companies stocks & providing proprietary investment advice to the

institutional clients, & to its sales & trading divisions. The research

division is also an important part of the underwriting process, both in

attracting the clients by their knowledge of clients industry & in

providing a critical link to the institutions that own the clients stocks once

the stocks is publicly traded. An efficient research team provides an

information advantage to the investment banks that can use it for in-house

trading purpose & also can use for the benefit of their clients.

Equity Research

The Equity Research division of a securities house or investment bank

provides in-depth stock market analysis & a broad perspective &

knowledge regarding the industry trends. They also provide an insight

into the including valuation of quoted companies & evaluation of

companies prospects. The research evaluations usually include:

Industry evaluations, which analyze the trends in the industry,

compare the company’s performance to the industry averages.

Company evaluations that examine the particular company, its

financial position, its securities from an investment perspective &

thereby recommend a buy/ hold/ sell decisions.

Technical analysis that focuses on the performance of the securities in

the various markets.

Portfolio analysis that helps to manage the client’s investment

objective with a suitable investment program.

Like this investment bankers perform equity research service.

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Investment Banking

Fixed-income research

The fixed income research division provides research focus on the

instruments like corporate debt including investment grade debt, high-

yield debt, corporate & portfolio strategy derivatives, mortgage backed

securities, asset backed securities. Fixed- income research is considerably

more quantitative than equity research. The analysts in this division

assess the fairness of the spreads between the fixed- income instruments

of different maturities & different risk classes & makes trading

recommendations based on the deviations from the fair spreads, estimate

the value of the options in the mortgages & mortgage backed products.

The fixed income research groups work closely with the clients in order

to identify their needs & work to provide customized solutions to the

clients.

Institutional investing

Institutional investors have been a recent phenomenon in the Indian

capital market, Which till then had the presence of a handful of public

financial institutions such as the & the insurance companies. The term

lending institutions such as the IFCI did not participate in secondary

market dealing as a matter of policy. With the advent of liberalization,

there are presently a large number of domestic institutional investors in

the secondary market apart from approved foreign institutional investors.

In addition, institutional investment have risen significantly in the

primary markets through venture capital & private equity investments by

investors in both the domestic & non- resident categories. Several of the

leading investment banks either have dedicated venture funds or private

equity funds that invest on primary market through their dealings &

market making activities.

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Investment Banking

Wealth management services

Wealth management services also called as private banking. Many

reputed investment banks nurture a separate segment to manage the

portfolio of high networth individuals, households, trust, & other type of

non- institutional investors. This can be structured either as a pure

advisory services wherein the investment manager does not have any

access to the funds or as a fund management service wherein the

investment manager is given charge of funds. In the former case, it

becomes it becomes a non-discretionary portfolio & in the latter case, it

becomes a discretionary portfolio. Such activity is regulated under the

guidelines. In other case, wealth management may be restricted to a

research based activity wherein in the investors is a provided good

investment recommendation from time to time.

Corporate Advisory

Investment banks in India also have large practice in corporate advisory

services relating to project financing, corporate restructuring through

equity repurchase including management of buyback offers under section

77A of the Companies Act,1956 raising private equity, structuring joint-

ventures & strategic partnerships & other such value added specialized

areas. Several investment banks have longstanding relationships with

government & firms. Their advise is sought because investment banks are

not big traders & distributors of securities or do not have a commercial

parent.

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Investment Banking

REGULATORY FRAMEWORK FOR INVESTMENT BANKING

Investment banking in India is regulated in its various facets under

separate legislations or guidance issued under statute. The regulatory

powers are also distributed between different regulators depending upon

the constitutions & status of the investment bank. Pure investment banks

which do not presence in the lending or banking business are governed

primarily by the capital market regulator i.e. SEBI. However universal

banks & NBFC investment banks are regulated primarily by the RBI 9in

their core business of banking or lending & so far as the investment

banking segment is concerned, they are also regulated by SEBI. An

overview of the regulatory framework is furnished below:-

1. At the constitutional level, all investment banking companies

incorporated under the Companies Act 1956 are governed by the

provision of the act.

2. Investment banks that are incorporated unde4r a separate statute such

as the SBI or the IDBI are regulated by their respective statue. IDBI is

in the process of being converted into Companies Act.

3. Universal Banks are regulated by RBI of India under the RBI Act

1934 & the Banking Regulation Act which put restrictions on the

investment banking exposures to be taken by the banks. The RBI has

relaxed the exposure limits for merchant banking subsidiaries of the

commercial banks. Till now, such companies were restricting their

exposure to a single entity through the underwriting business & other

fund based commitments such as standby facilities etc. to 25% of their

net owned funds. Therefore these companies are now on par with

other investment banks which can do so upto 20 times their net owned

fund.

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Investment Banking

4. Investment banking companies that are constituted as non-banking

financial companies are regulated operationally by the RBI under

Chapter IIIB section 45H & 45QB of the RBI Act, 1934. Under these

sections RBI is empowered to issue directions in the area of resources

mobilization, accounts & administrative controls. The following

directions have been issued by the RBI so far:

Non-Banking Financial Companies Acceptance of Deposits (Reserve

Bank) Directions, 1998.

NBFCs prudential Norms (Reserve Bank) Directions, 1998.

5. Functionally, different aspects of investment banking are regulated

under the securities & Exchange Board of India Act, 1992 & the

guidelines & regulations issued under. These are listed below:

Merchant banking business consisting of management of public offers

is a licensed & regulated activity under the SEBI Act (Merchant

Bankers), 1992.

Underwriting business is regulated under the SEBI (underwriters)

Rules & Regulations, 1993.

The activity of secondary market operations including stock broking

are regulated under the relevant by-law of the stock exchange & the

SEBI (stock broker & sub broker) Rules & Regulations, 1992. Besides

for restricting unethical trading practices, SEBI has issued the SEBI

(Prohibition of fraudulent & unfair trade practices relating to securities

markets) Regulations 1995& also SEBI prohibited insider trading

under regulations, 1992.

The business of asset management as mutual funds is regulated under

the SEBI (Mutual Fund) Regulations, 1996.

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Investment Banking

The business of portfolio management is regulated under the SEBI

(Portfolio mangers) Rules & Regulations, 1993.

The business of venture capital & private equity by such funds that are

incorporated in India is regulated by the SEBI(venture capital)

Regulations,1996 & by those that are incorporated outside India is

regulated under the SEBI ( Foreign venture capital funds)

Regulations,2000.

The business of institutional investing by foreign investment banks &

other investors in Indian Secondary markets is governed by the SEBI

(Foreign Institutional Investors) Regulations 1995.

6. Investments banks that are set up in India with foreign direct

investment either as joint ventures with Indian partners or as fully

owned subsidiaries of the foreign entities are governed in respect of

the foreign investment by the Foreign Exchange Management Act,

1999& Foreign Exchange Management (Transfer or issue of a person

resident outside India) Regulations 2000 issued there under as

amended from time to time through circulars issued by the RBI.

7. Apart from the above specific regulations relating to investment

banking, investment banks are also governed by the other laws

applicable to all other underwriting support on government securities

issue & participate in auctions held by the RBI.

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Investment Banking

SKILLS SUGGESTED FOR INVESTMENT BANKERS

Technical Skill

Academic Background- In the early days of investment banking, not

much importance was attached to academic background. Today, the

business has become very complicated and the skill requirements have

multiplied. Consequently, investment banks find it important to recruit

people with the right academic credentials. Typically, for most of the

important jobs, an MBA is a must. Investment banks rely heavily on

campus recruitments

Conceptual Soundness- One of the major benefits for a professional

in an investment bank is the learning associated with work. The

financial skills of an expert are tested to the core while handling a

complicated deal. Comprehensive and in-depth knowledge of financial

and business concepts are essential to sustain business. Multiple

relationships between various factors render decision-making difficult.

Financial solutions can be provided to the clients only when the

advisor is competent to understand all or at least a majority of them.

Before practical solutions emerge, the tools for decision-making will

give greater choice to the solution provider. A strong grounding in

theory and concepts facilitates this.

Product Specialization- One way to specialize in an

investment bank is through products. An expert in a particular

product, say hybrid instruments, can work out financial solutions for

any client across the industries. Each client has his or her individual

risk taking ability. To cater to the client on an in basis, appropriate

products that would suit their risk profile should be identified. The

clients will also feel at home while dealing with a product specialist.

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Legal Knowledge- While clear cut guidelines can be issued to the

traders regarding their market related activities that are governed by

the law, the complexity multiplies for an M&A deal. The regulators’

guidelines have to be strictly followed, even while envisaging a

combination. Legal knowledge is also important for structuring such

deals, which will help identify the constraints associated with

proposed solution. The situation gets more intense when the deal is a

cross-border M&A proposal. Apart from the knowledge of the inland

laws, foreign laws also have to be considered. Any regulation by the

foreign government can make an otherwise desirable deal, unviable.

Knowledge of Capital Markets and Functioning- More than any

other industry, it is the investment banking industry that has a direct

bearing on the way capital markets function. Any changes in the

capital market regulations affect the brokerage side of the business,

along with the trade clearing and settlement houses. The trading

personnel should be conversant with the regulations, guidelines,

procedural formalities and actual trade execution processes involved

in capital market. E.g. Trading system involves a lot of additional

skills than online trading. He has to be conversant with the codes,

symbols and conventions followed by the market. Quick signaling and

accurate interpretation are of utmost significance. Any mistake in

these would lead to faulty execution of orders and might entail

additional costs to the firm in correcting the errors.

Knowledge of Regulatory Bodies involved in the Various

Operations- It is necessary for an investment banker to be aware of

all the regulatory bodies that govern the activities in which he/she is

involved. A thorough knowledge of all such bodies is absolutely

essential to perform extraordinarily. In India, the SEBI & central bank

acts as a watchdog and regulator of market related activities.

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Knowledge of International Business Scenario and Economic

Trends:-Though a researcher is primarily involved in economic and

business cycle studies, it is the duty of all the investment bankers to

have a general overview of these affairs. Salespersons, who also act as

financial consultants/advisors, should essentially be aware with

economic and business cycles, lest they lose the respect and trust of

the client. The requirement for global perspective and international

exposure is becoming increasingly important. The firm should offer

services across the national borders to the corporate clients and

informed services are possible only when the employee is well-

equipped with international business information.

Knowledge of Software Tools, Developments in the Field of

Information Technology- One of the most important technical skills

is the usage of computers, tools and internet technologies. Marketing,

brokerage, research and capital mobilization have all undergone

sweeping changes owing to technology.

The securities trader has changed into a tech-savvy professional,

executing online orders & maintaining databases. The technology

helps management and other departmental professionals and even the

clients to disseminate such data in negligible time. Asset managers

have now complicated tools for scientific and in-depth valuation of

portfolios. Comp frameworks can be solved with minimum effort

using technology.

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Investment Banking

Communication Skills

Ability to Cater to the Audience According to its

Awareness Levels- Communication skills include both the means of

communication — written and oral. However, the audiences vary

extensively, and hence, the requisite communication skills also differ

widely. A marketer handling individual investors will necessarily have

to keep the content very simple and express t in layman’s terms.

Usage of financial terms & jargons will not fetch results. Cash flows,

the characteristics of the instruments & the risk class to which the

investment belongs to must be explained in simple & easily

understandable terms.

Negotiation Skills- Negotiation skills is important at a variety of

places. Institutional clients have to be convinced about the prospects

of the investments that are solicited by the firm. Investors in

syndicated debt must be satisfied with the payment streams and

interest rate terms. M&A transactions are the toughest assignments for

negotiations. Even a friendly transaction would be difficult if not for

patient and mutually negotiations. The common issues that pertain to

negotiation are — terms of offer, offer price, post merger integration,

organization and reporting structure, business lines to be developed

above all dealing with the overlapping functions. While negotiating,

the banker should always keep the prime object in the mind & quickly

evaluate the various counter offers & suggestions made by other party.

Personality Traits- Personality Traits plays an important

role in developing the skill set of an investment banker. Creativity is

an important feature. It comes in use while handling prospectus,

clients & team members. It is essential when solutions are to be

identified for complex problem. Innovations & creativity are required

structure deals.

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Investment Banking

Other Skills

Marketing Skills- The marketing skills would be an

application of skills mentioned above. One of the important marketing

skill would be relationship management. Unlike most other industries

where relationship plays a facilitating role in conducting business, it is

fundamental issue in the investment banking industry. An attitude for

creating, establishing & maintaining relationships, during boom &

down period, is of utmost importance in getting mandates.

Inter-Personal Skills-Inter-personal skills are basically blended from

communication skills, and personality traits. They include interactions

with superiors, subordinates, colleagues, clients, competitors, team

members and even politicians and public office bearers. Inter-personal

skills come to the fore during team exercises where diplomacy and

manners become essential. Team exercises can also include dealing

with members from other departments or even with other firms. Such

situations call for greater application of team skills and an element of

mutual respect towards each other.

Networking Skills- Networking refers to the process of developing a

web of contacts and acquaintances. Some of the special attributes

required to develop networking abilities would include:

• Knowledge of human psychology;

• Presence of mind to apply the appropriate skills as situation demands;

• Approaching through proper channels that would lend credibility

respectability to contacts;

• Persuasion skills;

• Highest standards of professionalism.

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Investment Banking

ROLE OF INVESTMENT BANKERS IN DEVELOPING AN ECONOMY.

Investment Bankers

Banks & Financial

Investment Institutions (financial economy)

Capital Market / Money Market

(financial economy)

Foreign Exchange Market

(financial economy)

Real Estate / Gold etc (real

economy)

Commodity futures Market

(financial economy)

Business activityProduction of

goods and services (real

economy)

Investors (generate savings)

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Investment Banking

EXPLANATION

1) Investors: Investors are the persons who generate savings. The

investors who generate savings will definitely like to earn something

out of it rather keeping the funds idol. So the question of investment

arises and with the investment risks arises. So for proper and safe

deployment of funds investment bankers help them in the process of

investing their funds.

2) Role of investment bankers: The investment bankers act as an

intermediary between the investors and capital market which consists

of primary market and secondary market. The investment bankers

with their intense research guide them to invest their money in

banks/FI, Capital and money market, foreign exchange market,

commodity market, real estate/gold etc. Proper deployment of funds

will help the investors to earn good returns with safety of their initial

invested funds.

3) Business Activity: All these investments from the investors will lead

to business activity in different sectors. The funds deployed by the

investors will be utilized by the users of the deployed funds will lead

production of goods and services in the economy.

4) Twin Advantage: The investors will not only earn returns, capital

appreciation etc but also they will utilize the goods and services

produced by the users of the deployed funds. This will in return create

satisfaction in the minds of consumer/investor and will also earn

profits for the user of the funds because of utilization of goods and

services.

This will be a win-win factor and also will develop the economy as a

whole.

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Investment Banking

CASE - STUDY

INTRODUCTION

Kotak Securities Ltd., is India's leading stock broking house with a

market share of around 8%. Kotak Securities Ltd. has been the largest in

IPO distribution.

The accolades that Kotak Securities has been graced which include:

Prime Ranking Award (2003-04) - Largest Distributor of IPO's

Finance Asia Award (2004) - India's best Equity House

Finance Asia Award (2005)-Best Broker In India

The company has a full-fledged research division involved in Macro

Economic studies, Scrotal research and Company Specific Equity

Research combined with a strong and well networked sales force which

helps deliver current and up to date market information and news.

Kotak Securities Ltd is also a depository participant with National

Securities Depository Limited (NSDL) and Central Depository Services

Limited (CDSL), providing dual benefit services wherein the investors

can use the brokerage services of the company for executing the

transactions and the depository services for settling them.

Kotak Securities has 122 branches servicing more than 1, 70,000

customers and coverage of 187 cities. Kotaksecurities.com, the online

division of Kotak Securities Limited offers Internet Broking services and

also online IPO and Mutual Fund Investments. Kotak Securities Limited

manages assets over 2500 crores of Assets under Management

(AUM) .The portfolio Management Services provide top class service,

catering to the high end of the market. Portfolio Management from Kotak

Securities comes as an answer to those who would like to grow

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Investment Banking

exponentially on the crest of the stock market, with the backing of an

expert.

AREA OF BUSINESS FOR KOTAK SECURITIES

Kotak Securities has five main areas of business:

Institutional Business

This division primarily covers secondary market broking. It caters to the

needs of foreign and Indian institutional investors in Indian equities (both

local shares and GDRs). The division also incorporates a comprehensive

research cell with sectoral analysts who cover all the major areas of the

Indian economy.

Private Client Services

Private Client Services (PCS) is a special investment division for High

Net-worth individuals, retail investors, Non-Resident Indian investors,

trusts, corporates and banks. The investment product range at PCS is

among the widest in the country and covers debt and equity, mutual funds

and specialised structured investment products.

Client Money Management

This division provides professional portfolio management services to

high net-worth individuals, retail investors, and corporates. Its expertise

in research and stock broking gives the Company the right perspective

from which to provide its clients with investment advisory services.

Retail distribution of financial products

Kotak Securities has a comprehensive retail distribution network,

comprising approximately 7000 agents, 13 branches and over 20

franchisees across India. This network is used for the distribution and

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Investment Banking

placement of a range of financial products that includes company fixed

deposits, mutual funds, Initial Public Offerings, secondary debt and

equity and small savings schemes.

Depository Services

Kotak Securities is a depository participant with the National Securities

Depository Limited and Central Depository Services (India) Limited for

trading and settlement of dematerialized shares. Since it is also in the

broking business, investors who use its depository services get a dual

benefit. They are able to use its brokerage services to execute transactions

and its depository services to settle these.

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PRODUCTS OF KOTAK SECURITIES

Once you invest with Kotak Securities, you can enjoy access to a wide

range of products and services to help you make the most of your

investments.

Easy Equity: Want your capital to appreciate fast? Invest in Easy Equity.

a) Sms Alerts

b) Call & Trade

c) Top Gainers and Losers notification

d) Super multiple

e) Portfolio Tracker

Easy Derivatives: The higher your risk, the greater the returns on your

investments.

a) Put Call ratios

b) Top value traded

c) Open interest

d) Stock future/Stock options

Easy IPO: Invest early for greater returns.

a) Forthcoming issues

b) New listings

c) Call & Trade

d) IPO news

e) Open issues

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Easy Mutual Fund: Looking to diversify your risk? Invest in Easy

Mutual Fund.

a) Find out NAV of a Scheme

b) View Scheme details

c) Mutual fund News

d) Compare Schemes

e) My portfolio

Easy Insurance: Secure your future and your family’s. There’s more to

insurance than just security.

a) How does the plan work?

b) Advantages of the plans

c) Eligibility

d) Other Benefits

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ACCOUNT TYPES

The first question in an individuals mind where to open an account

Want to start investing? Open an investing account with KOTAK

SECURITIES and begin right away. Whether you are a beginner or an

expert trader, they have different accounts to suit your needs:

Kotak Gateway Account:

If you are new to trading, Kotak Securities opens the gateway to a world

of investing opportunities for you - online and on-phone. Their in-depth

research will guide you in making smart investment decisions. Open the

Kotak Securities Gateway Account and get started.

Your Benefits:

Kotak Securities Knowledge Center that helps you learns more

about stock markets and investments.

Enjoy higher returns by investing early - through Easy IPO.

Research Reports on the economy, select industries and

companies help you make informed investment decisions while

dealing in Easy Equity.

Research advice via Kotak Securities SMS alerts, so you don't

miss out on important buying and selling opportunities.

Buy and sell stocks on phone using Call & Trade.

Access to 14 top-performing mutual funds through Easy Mutual

Fund.

Free news and market updates.

Exposure of upto 15 times your initial margin on select stocks

with Super Multiple.

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Investment Banking

How to activate?

You can activate Kotak Securities Gateway with any amount between Rs

20,000 to 5, 00,000/- as margin. This can be in form of cash deposit or

the value of the shares you buy.

Open your account: Step 1: To open your account, simply download and print an application

form, fill it in and post it along with the essential documents to the

address as mentioned in the form.

You can call them and they will have their representative meet you and

help you open the account

You can also email them at [email protected]. Their

representative will get in touch with you.

Step 2: They will inform you as soon as your account is activated, and

you can start trading instantly

This procedure is common for all accounts.

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Kotak Value Account:

Becoming a wise investor requires a good deal of research and education.

You must learn not only how stocks and mutual funds work, but also to

make your own investment decisions. The Kotak Securities Value

Account is specially equipped to make investing simpler for you.

Your benefits:

Kotak Securities Knowledge Center that helps you learn more

about stock markets and investments.

Their Research Reports on the economy, select industries and

companies help you make informed investment decisions while

dealing in Easy Equity.

Buy and sell stocks on phone using Call & Trade.

Invest in IPO’s with Easy IPO.


Funds.


miss out on important market movements.


The facility to trade in amounts 5 times greater than your

capital.

Lower delayed payment interest.

Access to K.E.A.T Desktop - specialised financial software that

makes trading easier.


with Super Multiple

How to activate?

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You can activate Kotak Securities Value with any amount between Rs.

5, 00,000/- and Rs. 10, 00,000/- as margin. This can be in form of cash

deposit or the value of the shares you would have currently.

Kotak Privilege Circle Account

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Kotak Securities offer you nothing but the best. At Kotak Securities, they

make sure you get to enjoy premier and top-line trading services - with

Kotak Securities Privilege Circle

Your benefits:

A dedicated Privilege Circle customer service desk offers you

assistance in opening accounts, handling day-to-day problems,

and more.

Independent market expertise and support through a dedicated

relationship manager.

Place orders phone through Call & Trade.

Access to Easy IPO and 14 top-performing mutual funds

through Easy Mutual Funds.


companies.



6 times exposure on the margin.

Access to K.E.A.T Premium - an exclusive premium analysis

tool with 52 Indicators for Technical Analysis, Derivative

Chains, Multiple Watchlists, and more.

Lowest delayed payment interest.


with Super Multiple

How to activate?

You can activate Kotak Securities Privilege Circle with any amount more

than Rs. 10, 00,000/- as margin, by way of cash or stock

Kotak High Trader Account:

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For daily traders, they have the Kotak Securities High Trader exposure -

an account specially designed for intra-day traders. This is an Auto

Square Off product where you can enjoy the benefits of intra-day trading.

All open orders will be automatically squared off at 3.10 pm.

Your benefits:




Access to KEAT Premium - an exclusive analysis tool with 52

Indicators for Technical Analysis, Derivative Chains, Multiple

Watchlists, and more.

Intra day calls from our experts for a nominal fee.


companies.





Funds.

Place a paper-free order for IPO, through Easy IPO.

How to activate?

You can activate Kotak Securities High Trader with any amount less than

Rs 5, 00,000/- as margin, by way of cash or stock.

Kotak Freeway Account:

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Trading unlimited! Kotak Securities Freeway enables you to trade as

many times as you like - at a fixed brokerage. Just pay a fixed brokerage

of Rs. 999/- a month and trade as many times as you want

Your benefits:




Intra day calls from our experts for a nominal fee.


sectors and companies.





Funds.

Place a paper-free order for IPO, through Easy IPO.

How to activate?

You can activate Kotak Securities Freeway with any amount less than Rs.

1, 25,000/- as margin, by way of cash or stock.

PLANNING WITH KOTAK

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Why you need to plan?

When it comes to important life goals it is important to develop a

financial roadmap to move your goals forward and to help you make the

most of life's changes.

You need to plan to protect yourself and your family against financial

risks. Sure, no financial planner can protect you from the risks you face in

life. But good financial planning can protect you from suffering the

financial loss that may result when any of those risks become reality.

Step 1: Sound financial planning can help you chart a clear course to your

retirement goals. So no matter whether you're just starting out or

approaching the end of your career, Kotak Securities provides you with

comprehensive planning and support.

Step 2: Plan taxes as ongoing process and not a one-time event. Good

planning will increase your after-tax cash flows, and may mean greater

savings during tax time.

Step 3: Make your money work smarter and harder. Get higher returns

from your investments. Here's how.

Say if you were to invest Rs. 100. Tax-saving schemes like Post Office

Schemes, Mutual Funds and Government Bonds are safe and long-term

avenues. Fixed Deposits also give you a 5.5%* interest, while the share

market brings you returns of 18.88%#.

PORTFOLIO MANAGEMENT

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Why Portfolio management?

As you drive towards your objective of creating wealth, you need to

employ the right investment vehicles, at the right time. Given the

unpredictable nature of equity markets, staying on course requires expert

maneuvering, time and effort.

That's where Portfolio Management comes in. It gives your portfolio the

edge by skillfully sifting through available investment opportunities to

help you reduce risk and maximize your returns; even as you are left with

ample time to focus on more pressing matters.

Benefits of Portfolio management with Kotak

Kotak Portfolio Management lets you effortlessly build and maintain a

safe and healthy investment, providing you with multiple benefits.

Count on experience

Their Portfolio Managers bring 10 years of experience to the table, with

an in-depth understanding of diverse investment instruments.

Stay in the loop

Through quarterly account performance statements, delivered to your

doorstep.

Go digital, stay updated

They e-mail all your financial statements to you, doing away with the

hassle of paperwork.

When in doubt, just ask

KOTAK SECURITIES have a dedicated website and a customer service

desk to address all your queries, anytime.

REASEARCH OF KOTAK SECURITIES

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Kotak Securities Research Center

Welcome to the Kotak Securities Research Center - the special research

cell where some of India's finest financial analysts bring you intensive

research reports on how the stock market is faring, when is the right time

to invest, when to execute your order and more. Depending on what kind

of investor you are, they bring you fundamental or basic research and

technical research. As an investor with Kotak Securities, you get access

to these research reports exclusively. You get access to the following

reports.

Intraday calls:

These calls are provided according to changing market situations. Be it

news, momentum or technical perspectives; be updated with what our

experts advise you to do during the market hours.

Special Report:

These reports give you an in depth coverage on special events such as the

Budget Report, Quarterly results, RBI Credit & Monetary Policy,

Monsoon Report and much more.

Market Morning:

A technical view summarizing the previous day movement and what is

expected to happen on the current day. This report will also provide you

with technical calls for trading along with various supports and

resistances of chosen stocks.

Daily Morning Brief:

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A report providing you information with fundamentally researched stocks

everyday. You also have information on all daily economic, political and

various other factors which affect the fundamentals of a company.

Weekly Technical Analysis:

This Weekly Technical Analysis brings you a complete round up of the

week gone by - recommendations, major supports and resistances, what

to look forward to and more.

Sectoral Reports:

Deciding which sector to invest in? Their Super Sector report can guide

you. Know details including the effect of government policies and

regulations and estimates about how the sector is expected to behave.

Stock Ideas:

Ever wanted to pick a needle from a stack of Hay. That's exactly what a

stock Idea is. Their research desk picks out potential stocks which can

provide immense scope for returns on investments. This is a report which

is completely based on fundamentals.

Derivative Reports:

You can view the put call ratio, the most active derivative contracts and

the top change in open interest. You can also get FII Statistics, the top

gainers and losers and the cost of carrying out various derivative

contracts.

Portfolio Advice:

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You can avail the advice of our experts by simply writing an email to

them. Whether it is on choosing a stock or sector or anything regarding

investments all your queries will be answered. If you need advise simply.

Kotak Securities SMS Alerts:

And last, but not the least, you can get these expert tips and recommendations as SMS on to your mobile phone.

Kotak Securities Research Advantage:

Check out the returns on investments that our clientele has enjoyed over

the past year.

MUTUAL FUND RESEARCH

Mutual Fund Research

When you decide to invest in a Mutual Fund, selecting from hundreds of

Mutual Funds can get tough. With Mutual Fund Research, you can take

your pick easily - from equity-based or debt-based funds, to growth funds

or dividend-based funds.

Quick Research for investments

Get access to in-depth research. Or zero in from our concise list of funds,

stocks and bonds based on your preferred criteria.

Analyse with in-depth research

Get independent research with reports, ratings, and rankings from expert

analysts; plus, insight into current analyst recommendations and their

historical performance.

Monitor your investments

Get breaking news and set alerts for your portfolio, and track

performance with watch lists

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INVESTING WITH KOTAK SECURITIES

At Kotak Securities, this is precisely what they believe in. They are

committed to make trade easy for you. They understand your level of

expertise in trading and provide you solutions to fit your needs - whether

you are a beginner, a seasoned investor or a professional trader. They can

help you invest wisely while taking into account, the amount you wish to

invest. Kotak Securities conducts research for all class of customers.

Beginners

Looking to invest but don't know where and how? Wondering whether

online trading would be a good and reliable way to invest? At Kotak

Securities, they make online investing really easy for you - so you can

trade from the comfort of your home or office, or even while you are on

the move.

Seasoned Investors

Given the volatile nature of the stock markets, you can never be really

sure of getting stable returns every time, from your investments. If you

have a family to look after, the need for planning your investments in the

long run becomes greater than ever. So whatever you’re life goals,

investing wisely could make all the difference between a fortune gained

and an earning lost. Kotak Securities, help you plan investments keeping

your future in mind.

Super Trader

If the research for beginners and seasoned are taken care of by them,

super traders—having a huge volume of transactions, who are dedicated

customers, research is conducted to maximize their returns with

minimizing risks.

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MARKET SURVEY FOR KOTAK SECURITIES

1) Are you familiar with Kotak Securities?

Yes No

2) Do you have an account with Kotak Securities? If No, Than pleaseSpecify?

Kotak HDFC

ICICI Others

3) Are you satisfied with the services provided by Kotak securities?

4) How do you find the portfolio management services of Kotak securities? Rate on the scale below Between 1-5 (1– Good, 5– Worst)

1 2 3

4 5

5) Which facility of Kotak Securities do you appreciate the most?

Easy Equity Easy Derivatives Easy IPO

Easy Mutual Fund Easy Insurance

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YES NO

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6) How do you find the customer relationship management of Kotak? Rate it on the scale below? Between 1-5 (1– Good, 5– Worst)

1 2 3

4 5

7) How do you find follow up services of Kotak securities in terms of Monthly reports and others? Rate it on the scale below between 1-5? (1– Good, 5– Worst)

1 2 3

4 5

8) Any limitations to Kotak Securities?

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MARKET SURVEY RESULT FOR KOTAK SECURITIES.

1) Are you familiar with Kotak Securities?

Total No of Person Yes (%) No (%)50 90 10

Kotak Securities

90%

10%

Yes (%)

No (%)

2) Do you have an account with Kotak Securities? If No, Than pleaseSpecify?

Total No of Person Kotak (%) HDFC (%) ICICI (%) Others (%)40 40 25 20 15

Kotak (%)40%

HDFC (%)25%

ICICI (%)20%

Others (%)15%

Kotak (%)

HDFC (%)

ICICI (%)

Others (%)

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3) Are you satisfied with the services provided by Kotak securities?

Total No of Person Yes (%) No (%)40 62 38

Yes (%)62%

No (%)38%

Yes (%)

No (%)

4) How do you find the portfolio management services of Kotak securities? How do you rate on the scale below? (1– Good, 5– Worst)

Total No of Person 1 (%) 2 (%) 3 (%) 4 (%) 5 (%)

40 44 23 15 11 7

1 (%)44%

2 (%)23%

3 (%)15%

4 (%)11%

5 (%)7%

1 (%)2 (%)3 (%)4 (%)5 (%)

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5) Which facility of Kotak Securities do you appreciate the most?Total No of Person

Easy Equity

(%)

Easy IPO (%)

Easy Derivatives

(%)

Easy Mutual

Fund (%)

Easy Insurance

(%)40 34 13 33 13 7

Easy Equity34%

Easy IPO13%

Easy Derivative

s33%

Easy Mutual Fund13%

Easy Insurance

7%

Easy Equity

Easy IPO

Easy Derivatives

Easy Mutual Fund

Easy Insurance

6) How do you find the customer relationship management of Kotak? Rate it on the scale below? (1– Good, 5– Worst)

Total No of Person 1 (%) 2 (%) 3 (%) 4 (%) 5 (%)40 31 27 17 13 12

1 (%)31%

2 (%)27%

3 (%)17%

4 (%)13%

5 (%)12%

1 (%)

2 (%)

3 (%)

4 (%)

5 (%)

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7) How do you find follow up services of Kotak securities in terms of Monthly reports and others? Rate it on the scale below? (1– Good, 5–

Worst)

Total No of Person 1 (%) 2 (%) 3 (%) 4 (%) 5 (%)

40 40 27 10 13 10

1 (%)40%

2 (%)27%

3 (%)10%

4 (%)13%

5 (%)10%

1 (%)

2 (%)

3 (%)

4 (%)

5 (%)

8) Any limitations to Kotak Securities?

LIMITATIONS

After conducting the survey the limitations quoted were as follows

1) Lack of Branches or Franchisee for trading purpose.

2) Telephonic transactions are at times difficult.

3) Difficulty in internet trading sometimes due to technical

problem in loading of sites.

4) No proper marketing strategy.

Note: Percentage rounded off to nearest figures.

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RECOMMENDATIONS.

After studying the working of Kotak Securities for Non-Institutional

investors (Investment Banking for general public) and taking into account

the survey report they should further improve the quality of services

provided by them in regards with transaction statement and the other

limitations which are quoted by the public.

Kotak securities should increase their network of branches according to

customer database and also area wise. It should be done gradually as it

requires lots of capital and it should also not affect the company as a

whole.

If the above recommendations are put into action by Kotak Securities, it

will improve its profitability and goodwill of the company along with

customer satisfaction.

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CONCLUSION

The future of investment banking industry as a whole looks bright. Many

more pure merchant banks & advisory firms could convert themselves

into full service investment banks that would broaden the market & make

the service delivery much more efficient. In addition, the technology &

market developments shaping the capital market would also provide an

added path to the growth of investment banking. Better regulatory

supervision & stricter enforcement of the code of conduct of market

intermediaries would ensure better issuers come to market & existing

issuers would follow enhanced standards of corporate governance. In

long run, all these developments would ensure fair returns to investors, &

encourage them to invest in the market. This would lead to growth for

capital market in general & investment banking industry also.

So hereby I conclude that Kotak Securities is an upcoming brand, in the

area of security business (Investment Banking), trying hard to provide

various services and facilities to their clients. Now as per their recent

strategy they are tying to capture retail investors, in order to increase their

goodwill in the market. In future the company will expand and diversify

its business in terms of new products and innovations in existing products

to cater to the needs of their valuable customers.

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BIBLIOGRAPHY.

Source:

Investment Banking-An Odyssey in High Finance-Pratap Subramanyam.

Managing Investment Banks An Introduction -ICFAIManaging Investment Banks Advance Topic -ICFAI

WIBLIOGRAPHY.

Source:

www. kotaksecurities.com

www.google.com

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Economy & Finance

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