Investment Banking

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Transcript of Investment Banking

  • 1. THE ROAD TO FUTURE OPPORTUNITIES IN A BEARISH MARKET Group 3 : Aravindhan R - GMBA08A158 Jimit Shah- GMBA08A119Mohammed Said- GMBA08A171Navin Bafna - GMBA08A125

2. KMCC - Background KMCC is part of the Kotak group which covers almost all realms of banking and finance industry

  • Our advisory and execution offerings include:
  • Private equity financing
  • Venture funding
  • Mezzanine financing
  • Preferential allotments
  • Buyouts
  • Pre-IPO
  • Secondary sales
  • Block purchases
  • Sectors include:
  • Banking and financial services
  • Pharmaceutical and healthcare
  • Energy and Infrastructure
  • FMCG
  • Automobiles, Aviation
  • Transportation
  • Telecom
  • Technology
  • Retailing
  • Media and Entertainment


  • Global presence extends to New York, London, Mauritius and Dubai

4. IPO Offerings Significant IPO deals and deal pipelines at present. 5. KMCC DEALS

  • Kotak Investment Banking successfully completed the $ 300 mn GVKPIL QIP - largest ever QIP out of India
  • With 16 of the 20 largest Indian offerings, KMCC has consistently topped the league tables for lead management between fiscal 2000 and 2006
  • First Indian Investment Bank to be appointed by the GoI as a Co-lead Manager in their international divestment of GAIL through a GDR offering.
  • Sole advisors to Mantri Developers, Vimta Labs and Jindal Polyfilms in private equity transactions
  • Through its international subsidiaries, acted as joint global coordinator and joint book runner to the $ 100 million GDR issue of Kotak Mahindra Bank, $ 170 million GDR issue of CIPLA and $ 54 million GDR issue of Dhampur Sugar Mills Limited.
  • Sole financial advisor to Mahindra Group on acquisition of the Chakan unit of Amforge
  • Financial advisors to M&M for their acquisition of a 67.9% stake in JECO Holding AG of Germany, the largest outbound auto component acquisition by an Indian company.
  • Successfully completed domestic equity offerings of Andhra Bank, Bank of Baroda, Union Bank, GVK Power, M&M Financial Services and GSPL, Sun TV.

6. KMCC - Achievements

  • Best Indian Investment Bank 2006 -Asset Asian Awards
  • Best Indian Investment Bank 2006&2007 - Finance Asia
  • Best Equity House in India 2003,2004 & 2005 Euro Money
  • Best Equity House in India 2003 & 2004 Asia Money
  • Best Equity House in India 2004 IFR
  • Ranked number one in mergers and acquisitions by Bloomberg, for the period January -June 2004.
  • First Indian investment bank to register with the SEC in the US and the SFA in the UK
  • Conducted the first French auction in India of Indo-Japanese joint venture Maruti Suzuki
  • Lead managed the first book-built follow-on offering for Indian petrochemicals major IPCL
  • Lead managed the first issue under the 10% dilution guidelines for HCL
  • Lead managed the first media IPO with FII participation for HT Media
  • Lead managed the first book-built IPO with standby underwriting for MarutiSuzuki

7. Macroeconomic & Industry Overview GDP GrowthGrowth of volume traded in secondary market (NSE) 8. Industry Overview

  • Indian Financial Sector
    • Considerable broadening and deepening of the Indian financial markets
    • Financial services accounted for approximately 14% of total GDP in fiscal 2007.
    • The combined average daily turnover of the BSE and the NSE for different market segments has increased from approximately Rs. 4.8 billion in March 1996 to approximately Rs. 312.1 billion in March 2006.
  • Regulatory Developments
    • Incorporation of Securities and Exchange Board of India (SEBI) Act, 1992
    • Issuers complying with eligibility criteria are allowed the freedom to issue securities at market-determined rates.
    • SEBI exercises control over the market through the issuance of guidelines and rules for various capital market
    • The SEBI Act established SEBI with the primary objective of protecting the interests of investors in securities.

9. % volume by top brokersIndustry Overview Internet Trading 10. Broking Industry in India

  • Approx 394 firms.
  • On the basis of geographical concentration, the West region has the maximum representation of 52%. Around 24% firms are located in the North, 13% in the South and 10% in the East
  • On the basis of terminals, 40% are located at Mumbai, 12% in Delhi, 8% in Ahmedabad, 7% in Kolkata, 4% in Chennai and 29% are from other cities
  • In terms of sub-brokers, around 55% are located in the South, 29% in West, 11% in North and 4% in East
  • Trading, IPO's and Mutual Fundsare the top three products offered with 90% firms offering trading, 67% IPO's and 53% firms offering mutual fund transactions

11. Peer Performance India Bulls MOST EDELWEISS - RELIGARE Companies P/E EPS Market Cap CMP Listing price Price band India bulls 13.05 22.91 1885.5 74.7 300 Rs.270 and Rs.330 Edelweiss 15.29 39.26 4473.5 595 825 Rs 725 and Rs 825 Motilal oswal 88.33 1.22 1,527.43 107.6 825 Rs 725 and Rs 825 Geojit 19.71 2.3 948.3 45.3 - - Religare 32 12.09 2,945.69 388.5 185 Rs 160 to Rs 185 JM financial 2.8 454.15 3820.5 1273 - - 12. Company valuation Price 200 - 240 Value 1786-2143 cr MC 14-16.8bn INR 3.5-4.2bn US$ 13.

  • Dilution of 12.76%
  • The present Issue of 8,92,90,000Equity Shares, at a price of INR 200 for cash aggregating INR million is being made through the 100% Book Building Process.
  • Equity Shares of Rs10 each. The Issue would constitute 12.76% of the fully diluted post Issue paid up equity capital of the Issuer.

14. QIBsNon-Institutional Retail Individual Employee Reservation Portion Number of Equity Shares available for allocation. A minimum of 5,35,74,000 shares to the QIBs as specified Up to 8,036,100 Equity Shares or Issue less allocation to QIB Bidder and Retail Individual Bidders. Up to 26,787,000 Equity Shares or Issue less allocation to QIB Bidders and Non- Institutional Bidders Up to 892,900 Equity Shares Percentage of Issue Size available for Allotment/ Allocation 60% 9% 30% 1% Basis of Allotment/ Allocation if respective category is oversubscribe Proportionate (Mutual funds 20% min) Proportionate Proportionate Proportionate Minimum Bid Bid Amount exceedsRs 100,000 Bid Amount exceedsRs 100,000 in multiples of 8 equity share in multiples of 8 equity share Maximum Bid Net Issue subject to applicable limits. Net Issue subject to applicable limits. Amount does not exceedRs 100,000. Not to exceed the employee reservation Mode of Allotment Demat Demat Demat Demat Bid Lot 8 Equity Shares in multiples of 8 Equity Shares 8 Equity Shares in multiples of 8 Equity Shares 8 Equity Shares in multiples of 8 Equity Shares 8 Equity Shares in multiples of 8 Equity Shares Allotment Lot same as above same as above same as above same as above Trading Lot 1 equity share 1 equity share 1 equity share 1 equity share Who can Apply as per guidelines as per guidelines as per guidelines as per guidelines 15. Financial Innovation is the key

  • Considering the market sentiments we are of the opinion that a plain vanilla IPO may not be lucrative to the investors.
  • The call of the time is that you come up with an unique offering which works as a bate to prospective investors and entices them to invest into the IPO.

16. Financial Innovation - Detachable Warrant

  • With each equity share the investor will be getting one warrant, which would be exercised 12 months from the issue.
  • It would be exercised at 10% discount if the stock is trading at a price below the one at which, it was issued.
  • But if the share price is trading at a price above the issue price, then investor would get it at 10% discount.

* Warrant conversion price would be computed from the future market price of the share 17. GDR/SDR in Singapore Exchange

  • We as a global I-bank can offer securities in Singapore through the SDR route.
  • Considering the present scenario, the SDR route seems very opportunistic and help the company to raise the capital and feed its ambitious growth plans
  • Each SDR would have 5 shares as the underlying asset priced in the band of approximately 40 SGD.


  • Thank you

Group 3 : Aravindhan RGMBA08A158 Jimit ShahGMBA08A119Mohammed SaidGMBA08A171Navin BafnaGMBA08A125