Financial Markets and Instruments

8/10/2019 Financial Markets and Instruments

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FINANCIAL MARKETS AND INSTRUMENTS

CONTENTS

CHAPTER 1INTRODUCTION TO FINANCIAL

SYSTEM

2 RESERVE BANK OF INDIA 3.MONEY MARKET,STRUCTURE,

OPERATIONS

4.S. E .B. I. GUIDELINES

5.CAPITAL MARKET ..OPERATIONS

6.MERCHANT BANKING ..ACTIVITY..

.. NBFCSTRUCTURE AND SERVICES

! .LEASING

" HIRE PURCHASE

1# CREDIT RATING

11.... MUTUAL FUNDS.

12.... FACTORING

13. FORFAITING

14 VENTURE CAPITAL

15. PRIVATE E$UITY

16. %EALTH MANAGEMENT

1. . OTHER FINANCIAL INSTITUTIONS

1!.. PENSION FUND.

1". SECURITISATION

2#..TERMINOLOGIES.

OB&ECTIVE

To understand our Financial system, acquire knowledge of various financial products, services , Institutions

and use it for Corporate / Individual requirements .

%HY TO STUDY

This subect covers the entire domestic financial system ,functions.

!arious financial services provided in the system . " finance professional should have basic knowledge ofday to day happenings in the financial system to take decision whether it is investment , borrowings or fund

raising.

HO% TO STUDY

#. $ead Financial papers%.articles by eminent finance &rofessionals.

'. (nderstand the terminologies used in the process and their meaning .

). There is no comprehensive te*t book covering the syllabus.

+. otes given has covered all as per syllabus.

-. $ead the notes and come to the class so that the doubts can be minimied.

%HAT ARE %E DISCUSSINGFinancial markets

Financial institutions

S'()*')(+..-+('/0.R+)'( )'(/'.-()*'-(*+)(+7 ' )+ '+

+(8/*+


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CHAPTER..1INTRODUCTION..

FINANCIAL SYSTEM COMPRISES OF ..

FINANCIAL.

. MARKETS

9. PRODUCTS.INSTRUMENTS

*. INTERMEDIARIES.

. INVESTORS.

+. INSTITUTIONS.

:. BENEFICIARIES.

REGULATORY AUTHORITIES.

1. RESERVE BANK OF INDIA.1"34

2. S E B I 1""2

3. I R D A.1"""+. PENSION FUND REGULATORYAND DEVELOPMENT AUTHORITY 2##!

SAVE..INVESTRAISE FUNDS..BORRO%

CREATE ASSETS PERFORM..PROFITGRO%TH..

INCREASE %EALTH..

PAY BACK THE LOANS..TAKE MORE.PERFORM BETTER..GRO%TH.

BOTH THESE OPPORTUNITIES ARE AVAILABLE IN THE MARKETS AND ALSO %ITHTHE INSTITUTIONS.

INVESTORS SHOULD PUT THE SURPLUS MONEY AVAILABLE ..TO PROPER

USE.

BENEFICIARIES %OULD CREATE ASSETS %HICH %ILL GRO% GENERATE

SURPLUS.

S'+; 7/ 8+ (+


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BENEFICIARY AL%AYS LOOKS AT..

CHEAP SOURCE..

COST OF FUNDS.

SIMPLE FORMALITIES..

THE SYSTEM SHOULD ENSURE CREATION OF INFRASTRUCTURE FOR

INVESTMENT ACTIVITY 0 FUND RASING ACTIVITY.

FINANCE FIELD IS EVER GREEN.

CHANGES HAPPENS ..

DUE TO E=TERNAL FACTORS..

INTERNAL FACTORS..

TO UNDERSTAND THE SUB&ECT OF FINANCE AND THE OPERATIONS

KEEP UPDATED %ITH THE MARKET KNO%LEDGE ..

CONTINUOUS FOLLO% UP.

MANY FACTORS AFFECTING THE CHANGE.

> READ FINANCIAL PAPERS DAILY ?

R B I ..REGULATESMONEY MARKET.BANKING SYSTEM..GOVERNMENT

OPERATIONS

SEBI.REGULATES .CAPITAL MARKET OPERATIONS.RELATED INSTITUTIONS

IRDA.REGULATES.INSURANCE SECTOR.

PFRDA..PESNION FUND MANAGEMENT

IMPORTANT ACTIVITIES HAPPENS IN THE SYSTEM FOR THE OPERATIONS.

1. ECONOMIC SURVEY2. UNION BUDGET

3. RBI@SMONETARY AND CREDIT POLICY

4. FOREIGN TRADE POLICY.

THESE ARE THE TOOLS FOR ECONOMIC DEVELOPMENT AND FUNCTIONING OF

VARIOUS PLAYERS IN THE SYSTEM.


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IMPORTANT DEPARTMENTS..

MONETARY POLICY DEPARTMENT.

RBI G8+(0( 00)0*+ '+ M0+'( 0 *(+/' -/* +8+( +( :'+( '+ U0/0 9)+' /

-(++0'+.

T+ -/* )'/0+ '+ -0 : *'/0 :( '+ ;(+', /0'/')'/0 0 )/+/0+ :( :)0*'/0/0 :

)( :/00*/ '+; :( +*0;/* +8+-;+0'.

T+ )/+/0+ *8+( '+ E*0;/* *+0(/, ;+'/* *+0(/, /0'+(0'/0 +*0;/* /')'/0 0

)/+ '+ ;(+' 0 /0'/')'/0 7/' 0+7 -/* , -()*', (+:(; ' 9+ /;-+;+0'+ )(/0 '+

:/00*/ +(.

F(; 2##5 RBI 7/ (+8/+7 '+ -/* )/+/0+


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S(' '+(; )+( ' 8+ **+ ' :)0 ' (+/'/* -(/*+.

INSTRUMENTS.PRODUCTS..SERVICES.

1. CALL AND NOTICE MONEY

2. COMMERCIAL BILLS

3. TREASURY BILLS

4. COMMERCIAL PAPER

5. CERTIFICATE OF DEPOSITS

6. GOVERNMENT SECURITIES

. REPOS.

CHARACTERISTICS.

INSTRUMENTS ISSUED AT A DISCOUNT TRADED AT A DISCOUNT AND

REEDEEMED AT PAR

A)(+ S:+'..

H/ /


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FROM 6.!.2##5 ALL NON BANK PARTICIPANTS E=CEPT PD@S %OULD BE PHASED

OUT .

PRUDENTIAL LIMITS ON E=POSURE IN THIS MARKET LINKED TO CAPITAL

FUNDS.

SCREEN BASED $UOTE BASED APPROACH IS PROPOSED.

NEED FOR USE OF SUCH PRODUCT.

TO MEET C R R RE$UIREMENTS.

ILLI$UIDITY IN THE MARKET.

SUDDEN %ITHDRA%ALS OF FUNDS.

2. COMMERCIAL BILLS

REPRESENTS GENUINE TRADE TRANSACTIONS.

BILLS ROUTED THROUGH COMMERCIAL BANKS.

BANKS DISCOUNT THESE BILLS.

BILLS.MAY BEDEMANDUSANCE.

BANKS CREATS ASSETS IN THE FORM BILLS DISCOUNTING .APPROACHES R

B I FOR REDISCOUNTING TO MEET ITS LI$UIDITY.

IT IS AN ON GOING FACILITY FOR THE BANKS %ITH

R B I .

THIS ALSO HAPPENS ONLY BET%EEN BANKS AND R B I .

R B I *(+ *+('/0 /0'+(+' :( '/ +0/0 7/* / 070 B0 ('+ .

3GOVERNMENT SECURITIES

G .O. I SECURITIES ARE SOVEREIGN DEBT OBLIGATIONS INSTRUMENTS.

TO FINANCE DEFICIT AND ASSIST PUBLIC SECTOR DEVELOPMENT

PROGRAMMES.

TENOR.2 YRS TO 3# YEARS.

COUPON EITHER PRE DETERMINED OR BIDDING PROCESS.

GOI SECURITIES ARE APPROVED SECURITIES FOR S. L. R RE$UIREMENTS OF

BANKS.

STATE GOVERNMENT SECURITIES.

AGENCY BONDS ARE ISSUED BY PSU@S GUARANTEED BY GOVERNMENT. CG..RS1#.###

SG.RS.1,###

AGENCYRS 5,###

PUBLIC DEBT OFFICE A DEPARTMENT OF

R B I MANAGES THIS FUNCTION.

4TREASURY BI LLS

KNO%N AS TBILLS ISSUED BY CENTRAL GOVERNMENT.

R .B. I ISSUES ON BEHALF OF GOVERNMENT FOR A TENOR OF "1 DAYS AND 364

DAYS.


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ROUTE FOR BORRO%ING PROGRAMME OF THE GOVERNMENT .

ISSUED A T A DISCOUNT AND REDEEMED AT PAR.,

ISSUED THROUGH AUCTION PROCESS.

DENOMINATION."1 DAYSRS.25### 364 DAYS FOR RS.1,##,###

UNIFORM PRICE AUCTION FOR "1 DAYS PAPER

CUT OFF PRICE METHOD.

MULTIPLE PRICE AUCTION FOR 364 DAYS PAPER.

RETAIL INVESTORS .THROUGH NON COMPETITIVE BIDDING .

TBILLS ARE FREELY TRANSFERABLE AND TRADED.

OVER THE COUNTER OR THROUGH N .S.E.

SECONDARY MARKET IS VERY ACTIVE..$UOTES ARE READILY AVAILABLE

5. REPOS

REPO MEANS AN INSTRUMENT FOR BORRO%ING FUNDS BY SELLING SECURITIES

%ITH AN AGREEMENT TO REPURCHASE THE SAME SECURITIES ON AMUTUALLYAGREE FUTURE DATE AT AN AGREED PRICE %HICH INCLUDES INTEREST FOR THE

FUNDS BORRO%ED.

SALE AND REPURC HASE OF SAME SECURITY ..BET%EEN T%O PARTIES..

SELLER SELLS SPECIFIC SECURITY %ITH AN AGREEMENT TO REPURCHASE. THE

SAME AT A DECIDED FUTURE DATE AND PRICE

> REPO?

R B I RELEASES SECURITIES TO BANKS UNDER THIS SCHEMEMOBILISES THE

FUNDS FOR THE GOVERNMENT

> REVERSE REPO?

REVERSE REPO IS AN INSTRUMENT FOR LENDING FUNDS BY PURCHASING SECURITIES

%ITH ANAGREEMENT TO RESELL THE SAME SECURITIES ON A MUTUALLY AGREED

FUTURE DATE AT AN AGREED PRICE %HICH INCLUDES INTEREST FOR THE FUNDS

LENT .

R B I ..LENDS AGAINST THE SECURITIES SOLD BYTHE BANK %ITH AREPURCHASE AGREEMENT.

SOURCE OF FUNDS FOR BANK.THIS THE RATE AT %HICH BANKS BORRO% . REPO

RATE

DEPENDS UPON THE PARTY INITIATED THE TRANSACTION.

MA&OR PLAYERS ARE BANKS.

REPO RATES ARE IN LINE %ITH ONGOING MARKET RATES.

6.CERTIFICATE OF DEPOSITS

CD@S ARE NEGOTIABLE MONEY MARKET INSTRUMENT.

INTRODUCED IN &UNE 1"!".


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INVESTORS

INDIVIDUALS.

BANKS.

CORPORATES.

TRUSTS.

NRI@S

FII@S

PROCEDURE

APPOINT.I P A

I P A ISSUE CERTIFICATE AFTER CHECKING ALL THE DOCUMENTS.

APPOINT A INTERMEDIARYMAY BE MERCHANT BANKER.FOR MARKETING.

GET THE INSTRUMENT RATED.

GET THE FUNDS BY SALE OF C.P.

ON DUE DATE %HO EVER IS THE HOLDER OF C.P. %ILL GET THE REPAYMENT .

I P A SHOULD REPORT TO R B I THE C.P. ISSUE.

ISSUER SHOULD DISCLOSE IN THEIR ANNUAL REPORT THE FUNDS RAISEDTHORUGH THIS ROUTE.

OPERATIONAL ASPECTS OF MONEY MARKET..

REGULATORY AUTHORITYRESERVE BANK OF INDIA..

PUBLIC DEBT ACT 1"44.

FI=ED INCOME MONEY MARKET AND DERIVATIVES ASSOCIATION OF INDIA >FIMMDA?

..S.R.O.

RECOMMENDS

HEALTHY BUSINESS PRACTICES..

EHTICAL CODE OF CONDUCT

PRINCIPLES AND PRACTICES

I0 '+ +( 2###G8+(0;+0' *+( +/0+'+ '+ (+ : (+-0/9//'

R B I .CONTROLS..G +* '(+G (+'+ +*)(/'/+M0+ ;(+' +*)(/'/+

SEBI *0'( '+ MF, 0 '+( -+('/0 0 S'* +*0+.. '(/0 ;+*0/;..+'*.

LI$UIDITY AD&USTMENT FACILITY

I0'()*+ /0 1""". B0/0 +*'( (+:(;.

M0+;+0' : (' '+(; /


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MULTIPLE PRICE AUCTION.FRENCH AUCTION

C)' :: /+ 6.2#

BANK YIELD

A 5.!#.......(.4##.## *(

B 6.25.......(.3##.##

C 6.35.......(1###.##

D 6.5#.......(2###.##

E 5."5......(. !##.##

F 6.##......(12##.##

H/+( '0 6.2# / (++*'+.

L7+' /+ :/(' -(/(/'

S+*0 7+' +*0.

A 7/ +' :/(' -(/(/'

E 7/ +' +*0

F +' ' -(/(/'

I0 '/ )*'/0 '+ 8+(0;+0' 7/ 9+ 9+0+:/'+ 9 /)/0 ' /::+(+0' /+ -+( 9/.

T+ *' : :)0 7/ 9+ 9+''+(.

RBI IS LOOKING AT COST OF FUNDS.

INVESTOR IS LOOKING AT THE RETURNSYIELD

D)'* )*'/0

U0/:(; -(/*+ ';+0'.

T+ 9/+( ' 7+( '0 *)' :: -(/*+ (+ (++*'+.

A';+0' 7/ 9+ ;+ ' )0/:(; -(/*+ ' '+ 7 8+ 9/ 98+ *)' :: -(/*+ ' '+ ;+

-(/*+.

T+ 9/ ' /+( '0 *)' :: 7/ 9+ /8+0 -(/(/'.

UNIFROM PRICE AUCTION..DUTCH AUCTION

BANK YIELD

A 5.!#

B 6.25

C 6.35

D 6.5#E 5."5

F 6.##

T+ *)' :: /+ / +' ' 6.1#.

A 90 7/* 8+ /+ 0' +*++/0 6.1# 0;+ A, E, 0 F 7/ +' '+ +*)(/'/+ 7/' 6.1#

/+ .

F(; A-(/ 2##" RBI 7/ )*'/0 '+ G8' +*)(/'/+ )0+( U0/:(; -(/*+ )*'/0.

E=AMPLE

1? = -)(*+ T 9/ : R1### :( R "!, "# 9+:(+ ;')(/'

%' / '+ /+ 0 '/ T 9/

Y/+>F*+ 8)+P(/*+? =365 1##


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P(/*+ 0 : : ;')(/'

5.342

2? A / ::+(+ T 9/ : R 1### :( ( "6!, 1!2 9+:(+ '+ '+ : ;')(/',

A +-+*' 0 /+ : 6.25.%) A 9) '+ T 9/ ::+(+

6.62"

RECENT CHANGES

R B I -+ )' 00 90/0 +0'/'/+ :(; * ;0+ ;(+'.

I0'()*'/0 : R T G S..R+ '/;+ ( +''+;+0' > :'+( +''+;+0' /0 *+ : 90? 9++0

/0'()*+.

COLLATERISED BORRO%ING AND LENDING OBLIGATIONCBLO..

CBLO/ 0+'/9+ /0'();+0' +8+-+ 9 CCIL-':(; :( 9((7/0 +0/0.0*(+/' (/ */'+.CCILP(8/+ )(0'++ /0' +:)'.' 9+ '(+ 0 CCIL

P':(;..>*+(/0 *(-('/0 : I0/ '?.

BENCHMARK RATES..

A(+ -(/*+ : /0'();+0' '' (+ '(+ /0 '+ ;(+'. 7/* (+ )+ :( -(/*/0 '+( /0'();+0'.

I0'+(0'/0 **+-'+ 9+0*;( / LIBOR > L00 /0'+( 90 ::+( ('+?

N'/0 '* +*0+ +8+-+ B+0* ;( ('+ :( I0/0 ;(+'

MIBID..MUMBAI INTER BANK BID RATE

MIBOR.MUMBAI INTER BANK OFFER RATE

B' '++ (+ )+ :( (' '+(; 0 ;+/); '+(; /0 M0+ ;(+'.

FIMMDAFI=ED INCOME MONEY MARKET AND DERAVITIVE ASSOCIATION

CREATES BENCHMARK RATES %HICH CAN BE USED BY THE MARKET PLAYERS.

C;-)''/0 / 9+ 0 '+ ' *+*'+. C;-)''/0 ) 9+ 0+ 0 ' 9/ 0

'/;+ 9)0 *+)+. .

GOVERNMENT SECURITIES INDICES

I0+ -(8/+ 9+0*;( :( -(':/ ;0+;+0' .

FOUR INDICES ARE THERE FOR GOVERNMENT SECURITIES MARKET.

IBE= PUBLISHED BY ICICI SECURITIES.

GOVERNMENT SECURITIES INDE= BYN S E

&P MORGAN@S INDIA GOVENRMENT BOND INDE=.

SBIGILT INDE=..

SECONDARY MARKET


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PLAT FORM FOR TRADING.

T(/0 /0 G8+(0;+0' +*)(/'/+ , T 9/, B0, '+( :/+ /0*;+ +*)(/'/+ ..

% .D. M SEGMENT OF N. .S .E.

GILT SEGMENT OF B S E

DIRECT NEGOTIATIONS.

%DM +;+0' : N S E *;;+0*+ -+('/0 /0 &)0+ 1""4.

F(; *(++0 9+ '(/0 :*//' :( +9' ;(+' /0 '+ *)0'(.

NEAT.>N'/0 +*0+ :( )';'+ '(/0 ?'+; -(8/+ '(/0 0 (+-('/0 :(

G.+*.

A +9' /0'();+0' (+ /0*)+.

T(/0 / (+( (/8+0;'*/0.

NEGOTIATED DEALING SYSTEM >NDS?.. COMMENCED OPERATIONS IN FEB.2##2.

A0 ++*'(0/* +/0 '+; :( :*//''/0 +/0 G+*.O0/0+ 9//0 :*//'. T(0-(+0* :

'(+ 0 ++*'(0/* +''+;+0'.

CLEARING CORPORATION OF INDIA LTD.>CCIL?

P(;'+ 9 B0 0 /0'/')'/0 7 /0*(-('+ /0 A-(/ 2##1 ' )--(' 0 :*//''+ *+(/0

0 +''+;+0' : '(+. I0 G.+*.

O9+*'/8+..

S+''+;+0' : G.+* '(0*'/0 0 DVP 9/>.+/8+( 8+() -;+0' ?

FI=ED INCOME DERIVATIVES

A0 /08+'( /0 '+ F/+ /0*;+ ;(+' / +-+ ' 8(/) (/ /0*)/0 I0'+(+' (/.

I0*;+ ; 9+ :(;.I0'+(+' -;+0'..*-/' /0(+/08+';+0' /0*;+.

I08+(+ (+'/0 ' '+ -(/*+ : B0 0 /0'+(+' ('+.

T++ (+ ++ 9 I0'+(+' ('+ +(/8'/8+

I0'+(+' ('+ 7-

F(7( ('+ (++;+0' (+ --)( ..

INTEREST RATE S%APS

T7 -('/+ (++ ' +*0+ '(+; : /0'+(+' -;+0' :( 0'/0 -(/0*/- ;)0'.

T+ '(0*'/0; 9+ 9+'7++0

F/+ ' :'/0 ('+.

F'/0 ('+ ' :/+ ('+.

O0+ :'/0 ('+ ' '+( :'/0 ('+O)':7 7/ 9+ 0 I0'+(+' -;+0'

DISOCUNT AND FINANCE HOUSE OF INDIA LTD..


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SET UP IN 1"!! AS PER THE VAGHUL COMMITTEE RECOMMENDATIONS.

PROMOTED BY R B I AND CB@S AND FI@S .

A LEADING PRIMARY DEALER.

TO MANAGE THE LI$UIDITY IMBALANCE IN MONEY MARKET.

TO BE AN ACTIVE TRADER IN THE SECONDARY MARKET OF MONEY MARKET.

PROVIDE SAFE AND RISK FREE INVESTMENT AVENUES.

GREATER LI$UIDITY.

IN &UNE 2##4 SBI GILTS LTD MERGED %ITH DFHI .

CHAPTER4

SEBI GUIDELINES..

S E B ISECURITY E=CHANGE BOARD OF INDIA .

C0*+-' : SEBI / 9+ 0 SEC : US.

1""# ..'('+ :)0*'/0/0)0+(') ' C C I .

1""1..CCI 9/+ ..

1""2SEBI *' 7 -+./' 9+*;+ '+ (+)'( )'(/' :( *-/' ;(+'-+('/0.

O9+*'/8+..

1. T -('+*' '+ /0'+(+' : '+ /08+'(.

2. B(/0 /0 D/*)(+ 0(;

3. T -(;'+, (+)'+ 0 +8+- '+ +*)(/'/+ ;(+' 0 /' -+('/0.

REFORMS >CHANGES? IN CAPITAL MARKET

SEBIAS A REGULATORY AUTHORITY.

I+0'/:/*'/0 : I0'+(;+/(/+.

R+/'('/0 : /0'+(;+/(/+.> M0'(?

C-/' + V(/) *0+ 9()' /0 ?

H/ /' R/ :*'(;0+;+0' -+(*+-'/0.

D)+ //+0*+ *+('/:/*'+

M.O.U.

I0'+( + *'/0 : (+-0/9//'/+.

U0+( 7(/'/0 >-'/0.?

L* /0 -+(/

S(+ /0 -''+(0

R'/0 : +9' /0'();+0'.

B 9)//0 -(*+.

R+)*'/0 : '/;+ /0 -' /)+ *'/8/'/+.

R+:)0 : )9*(/-'/0 /0 *+ : 0 )0+(7(/'/0.

G)/+/0+ :( D+9' /)+.

P+0' -/0' :( MB@


15/55

G)/+/0+ ' B0) /)+.

A* :)')(+ 0 -'/0?

I0'()*'/0 INDO NE=T -':(; :( MID CAP '* '(/0.> YET TO FINALISE?

D+;)')/'/0 O: '* +*0+

G)/+/0+ :( IPO '() D+9' /0'();+0'..

I0'()*'/0 ASBA FACILITY.

SEBI 7/ *0+ '+ )/+/0+ -+( '+ *0+ (+


16/55

VENTURE CAPITAL.

MUTUAL FUNDS

ADRGDR ISSUES

SUBSTANTIAL AC$UISITION TAKE OVERS

BUY BACK OF SECURITIES.

ISSUE OF S%EAT E$UITY.

COLLECTIVE INVESTMENT SCHEME.

PRICING OF AN ISSUE.

DISCLOSURE AND INVESTOR PROTECTION.

OFFER DOCUMENTS.PROSPECTUS.SEBI GUIDELINES

DISCLOSURES TO BE MADE..

STRUCTURE AND CONTENTS DEFINED..

HIGHLIGHTS

RISKFACTORSMANAGEMENT PERCEPTION..

GOVERNMENT APPROVALSSEBI DISCLAIMER CLAUSE

STOCK E=CHANGE DISCLAIMER CLAUSE..LISTING.

MINIMUM SUBSCRIPTION

RATING AND DEBENTURE TRUSTEE >IN CASE OF DEBT ISSUE?

ISSUE MANAGEMENT TEAM

CAPITAL STRUCTURE LOCK IN PERIODBUILD UP OF CAPITAL

SHAREHOLDING PATTERN.

TERMS OF THE ISSUE.

INSTRUCTIONS TO APPLICANTS.

INFORMATION ABOUT DEPOSITORY.

STOCK INVEST PROCEDURE.TA= BENEFITS.

OB&ECTS OF THE ISSUE.

COMPANY PROFILE.

PROMOTERS BACK GROUND.

GROUP COMPANIES.

BOARD OF DIRECTORSOTHER DIRECTORSHIP

PRO&ECT DETAILS.

INDUSTRY PROFILE.

BUSINESS PROFILE.

OUTSTANDING LITIGATIONS.

&USTIFICATION PRICING$UALITATIVE$UANTITATIVE. > ISSUE %ITH PREMIUM?FINANCIALSAUDIT REPORT.

MAIN PROVISIONS OF ARTICLES.

MATERIAL CONTRACTS ..DOCUMENTS

PRO&ECTIONS ..VS..PERFORMANCE. > INCASE OF COMPANY GOING FOR 20 TIME

THROUGH PUBLIC ISSUE?.

F( O::+( *);+0' : R/' /)+.L+''+( O: ::+(/0:(;'/0 / +-' ' ;/0/;); '+

+/'/0 (+ +( 07 ;(+ 9)' '+ *;-0..0(; '')'( *)+ 7/ 9+

:)(0/+.


17/55

SCHEDULE I

>C)+ 5.3.1.2?

MEMORANDUM OF UNDERSTANDING BET%EEN THE LEAD MERCHANT

BANKER TO THE ISSUE AND THE ISSUER COMPANY

THIS MEMORANDUM OF UNDERSTANDING MADE BET%EEN....... >0;+ : '+

/)/0 *;-0?, A COMPANY %ITHIN THE MEANING OF THE COMPANIES ACT,1"56 AND HAVING ITS REGISTERED OFFICE AT ......... >(+/'+(+ ::/*+ (+ :

'+ /)/0 *;-0? >HEREINAFTER REFERRED TO AS '+ C;-0? AND........

C;-0 (+/'+(+ )0+( '+ C;-0/+ A*' 1"56, 0 8/0 /' (+/'+(+ ::/*+

'...................... 7/' '+ 9(0* ::/*+ ' >+(+/0:'+( (+:+((+ ' '+ L+ M+(*0'

B0+(?.

%HEREAS

1. T+ C;-0 / '/0 '+- :( /)+ :...................... >-('/*)( : '+ /)+?

' '+ -)9/* +/'/0 (++( : '+ C;-0 '+ / /)+ :

(++9+0')(+ / +(+/0:'+( (+:+((+ ' '+ /)+ AND

2. T+ *;-0 --(*+ '+ L+ M+(*0' B0+( ' ;0+ '+ /)+

0 '+ L+ M+(*0' B0+( **+-'+ '+ +0+;+0' /0'+(/ )9+*'' '+ *;-0 +0'+(/0 /0' ;+;(0); : )0+('0/0 :( '+ -)(-+

9+/0 '++ -(++0'

NO%, THEREFORE, '+ C;-0 0 '+ L+ M+(*0' B0+( +(+9 (++

:7

1. B+/+ '+ L+ M+(*0' B0+(, .........., ............, 0 ................., 7) 9+

*'/0 '+ *;0+( ' '+ /)+.

2. T+ C;-0 +(+9 +*(+ '' /' *;-/+ 7/' ( (++ ' *;-

7/' '+ '')'( :(;/'/+ )0+( '+ C;-0/+ A*', G)/+/0+ :(

D/*)(+ 0 I08+'( P('+*'/0 /)+ 9 '+ S+*)(/'/+ 0 E*0+

B( : I0/ >+(+/0:'+( (+:+((+ ' '+ B(? 0 '+( (++80' '')'+

' +09+ /' ' ;+ '+ /)+ 0 /0 -('/*)( /0 (+-+*' : '+ :7/0;''+(

>G/8+ +'/ 0 -('/*)( : '')'( *;-/0*+ 7/* '+ *;-0 '

:):/ 9+:(+ ;/0 '+ /)+?

C0+0' : '+ +0+( 9 9++0 9'/0+ 8/+........... >+'/ : '+

(+)'/0? 0 /0 **(0*+ ' '+ '+(; : '+ R+)'/0 -+ 9 '+

G+0+( M++'/0 + 0 .............. >'+ : '+ ;++'/0?.

3. T+ *;-0 )0+('+ 0 +*(+ '' 0 /0:(;'/0 ;+ 8/9+ '

'+ L+ M+(*0' B0+( ( 0 ''+;+0' ;+ /0 '+ O::+( D*);+0'

>U-'+ '/ &)0+ 1#, 2##?

P+ 24 : 34!

9+ *;-+'+ /0 (+-+*' 0 9+ '()+ 0 *((+*' 0 '' )0+( 0

*/(*);'0*+ /' /8+ ( 7/' 0 /0:(;'/0 ( ''+;+0' 7/* /

/+ ' ;/+ '+ /08+'(.

4. T+ C;-0 )0+('+ ' :)(0/ *;-+'+ )/'+ 00) (+-('>?,


18/55

'+( (++80' *);+0', --+(, /0:(;'/0 (+'/0 ' -+0/0 /'/'/0, +'*.

' +09+ '+ L+ M+(*0' B0+( ' *((9('+ '+ /0:(;'/0 0

''+;+0' /8+0 /0 '+ O::+( D*);+0'.

5. T+ C;-0 , /: (+? ' +09+ /; ' 8//' '+ -0' /'+, ::/*+ : '+

C;-0 ( )* '+( -*+>? ' *+('/0 :( /;+: '+ '()+ ''+ : ::/(

: '+ *;-0 /0*)/0 '+ -((+ ;+ /0 (+-+*' : '+ -(+*'

/;-+;+0''/0, '') 0 '+( :*' (++80' ' '+ /)+.

6. T+ C;-0 +'+0 0+*+( :*//'/+ ' '+ L+ M+(*0' B0+(

' /0'+(*' 0 0 ;''+( (++80' ' '+ I)+ 7/' '+ /*/'( + 8/(,

)/'(, *;0+(, *0)'0', 8/( ' '+ I)+, '+ :/00*/

/0'/')'/0, 90, ( 0 '+( (0/'/0, 0 7/' 0 '+(

/0'+(;+/(/+ 7 ; 9+ */'+ 7/' '+ /)+ /0 0 *-*/'

7'+8+(.

. T+ C;-0 +0)(+ '' 8+('/+;+0' -(+-(+ 0 (+++ 9 '+

A8+('//0 A+0* ( '+(7/+ /0 *00+*'/0 7/' '+ I)+ *0:(; '

(+)'/0, )/+/0+ +'*. /)+ 9 '+ B( 0 /0'()*'/0 /8+0 9 '+

L+ M+(*0' B0+(>? :(; '/;+ ' '/;+ 0 '' /' 0' ;+ 0

;/+/0, /0*((+*' ''+;+0' /0 '+ 8+('/+;+0', -(+ (+++, ( /0 0;'+(/ (+'/0 ' '+ I)+ ( ' 0 P(+ B(+( I08+'( C0:+(+0*+.

!. T+ C;-0 0', 7/')' -(/( --(8 : '+ L+ M+(*0' B0+(,

--/0' '+( /0'+(;+/(/+ ( '+( -+(0 )* R+/'(( ' '+ I)+,

B0+( ' '+ I)+, R+:)0 B0+(, A8+('//0 A+0*/+, P(/0'+( :(

-(/0'/0 --/*'/0 :(;, ';+0' 8/*+ ';+0' +''+(, (+ *+('/:/*'+

+9+0')(+ *+('/:/*'+, (+:)0 (+( ( 0 '+( /0'();+0', */(*)(, (

8/*+.

". I0 *0)''/0 7/' '+ L+ M+(*0' B0+(, '+ *;-0 , 7+0+8+(

(+


19/55

9/ : ';+0' ( *;-+'/0 : ::+( :(;/'/+.

16. T+ *;-0 (+:)0 '+ ;0+ (/+ /0 '+ /)+ ' '+ --/*0' /:

(+? C-/' '()*')(/0 7/' '+ (+'/8+ *;-0+0' 0 :(;/'/+ )*

*;-/'/0 : +9' 0 +9? D(:'/0 0 D+/0 : '+ ::+( *);+0' 0 : 8+('/+;+0' -)9/*/'

;'+(/ /0*)/0 0+7--+( 8+('/+;+0' 0 9(*)(+ ;+;(0);

*0'/0/0 /+0' :+')(+ : '+ ::+( *);+0'.

Q T+ +/0'+ L+ M+(*0' B0+( +0)(+ *;-/0*+ 7/' '+

G)/+/0+ :( D/*)(+ 0 I08+'( P('+*'/0 0 '+( '/-)'+

(+? M(+'/0 : '+ /)+, 7/* 7/ *8+(, /0'+( /, :(;)'/0 ;(+'/0

'('+/+, -(+-('/0 : -)9/*/' 9)+', ((0+;+0' :( ++*'/0 : >/?

;+/, >//? *+0'(+ : /0 *0:+(+0*+ : 9(+(, /08+'( +'*. >///?

90+( ' /)+, >/8? *+*'/0 *+0'(+ >8? 9(+( ' /)+ 0 >8/?)0+(7(/'+( 0 '+ )0+(7(/'/0 ((0+;+0', /'(/9)'/0 : -)9/*/' 0

/)+ ;'+(/ /0*)/0 --/*'/0 :(;, -(-+*') 0 9(*)(+, 0

+*//0 0 '+ +? S++*'/0 : 8(/) +0*/+ *00+*'+ 7/' /)+, 0;+ R+/'(( '

I)+, -(/0'+( 0 8+('//0 +0*/+.

>:? F7)- 7/' 90+( ' '+ /)+ ' +' U-'+ '/ &)0+ 1#, 2##?

P+ 25# : 34!

>? T+ -'/)+ *'/8/'/+ 7/ /088+ ++0'/ :7)- '+-, 7/* ;)'

/0*)+ :/0/'/0 : 9/ : ';+0' 7++/0 )' : ;)'/-+

--/*'/0, /'/0 : /0'();+0' 0 +-'* : *+('/:/*'+ 0 (+:)0,

7/' '+ 8(/) +0*/+ *00+*'+ 7/' '+ 7( )* (+/'(( ' '+

/)+, 90+( ' '+ /)+, 0 '+ 90 0/0 (+:)0 9)/0+.


20/55


21/55

-(' : -(;'+( *0'(/9)'/0 )9+*' ' */0 0 '+ +*)(/'/+ -(-+ ' :(; -(' :

-(;'+(

*0'(/9)'/0 )9+*' ' */0, 7/ 0' 9+ /-+ '(0:+((+ 9 '+ -(;'+( )(/0 '+

-+(/

'('/0 :(; '+ '+ : ://0 '+ (:' -(-+*') 7/' '+ B( '/ '+ '+ : *;;+0*+;+0' :

*/0

-+(/ ''+ /0 '+ (:' -(-+*').

PLACE LEAD MERCHANT BANKER>S? TO THE ISSUE

DATE %ITH HIS THEIR SEAL >S?

ANNE=URE TO THE DUE DILIGENCE CERTIFICATE FOR THE ISSUE OF

BY LIMITED

1. M+;(0); 0 A('/*+ : A*/'/0 : '+ C;-0.

2. L+''+( : I0'+0'SIA R+/'('/0F(+/0 C9('/0 A--(8A--(8 :( /;-(' : -0' 0

;*/0+(, /: --/*9+.

3. N+*+( *+(0*+ :(; 8+(0;+0', '')'(, ;)0/*/- )'(/'/+ +'*. :( /;-+;+0''/0 :

'+

-(+*', 7+(+8+( --/*9+.

4. D*);+0' /0 )--(' : '+ '(* (+*( 0 +-+(/+0*+ : '+ -(;'+( 0 '+/( -(:+/0*;-+'+0*+.

5. L/'/0 (++;+0' : '+ C;-0 :( +/'/0 +*)(/'/+ 0 '+ S'* E*0+.

6. C0+0' +''+( :(; C;-0 )/'(, B0+( ' /)+, B0+( ' '+ C;-0, L+

M+(*0'

B0+(, B(+( 0 7+(+ --/*9+, P(-+ T()'++.

. A--/*'/0 ;+ 9 '+ *;-0 ' '+ :/00*/ /0'/')'/090 :( :/00*/ /'0*+ -+(

9+*'

: '+ I)+ 0 *-/+ : (+'/8+ 0*'/0 +''+(.

!. U0+(7(/'/0 +''+( :(; '+ -(-+ )0+(7(/'+( ' '+ /)+.

". A)/'+ B0*+ S++' : '+ C;-0P(;'+( *;-0/+ :( (++80' -+(/.

1#. A)/'( *+('/:/*'+ (+(/0 '9+0+:/' 8/9+ ' '+ C;-0, S(++( 0 D+9+0')(++(.

>U-'+ '/ &)0+ 1#, 2##?

P+ 252 : 34!

>C)+ 5.3.3.1?

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY LEAD

MERCHANTBANKER>S? ALONG%ITH DRAFT OFFER DOCUMENT

T,

SECURITIES AND E=CHANGE BOARD OF INDIA

D+( S/(,

SUB. ISSUE OF BY LTD.%+, '+ )0+( 0'+ L+ M+(*0' B0+( >? ' '+ 98+ ;+0'/0+ :('*;/0

/)+ ''+ :7

1. %+ 8+ +;/0+ 8(/) *);+0' /0*)/0 '+ (+'/0 ' /'/'/0 /+

*;;+(*/ /-)'+, -'+0' /-)'+, /-)'+ 7/' *9('( +'*. 0 '+(

;'+(/ ;(+ -('/*)( (+:+((+ ' /0 '+ A00+)(+ +(+' /0 *00+*'/0 7/'

'+ :/0/'/0 : '+ (:' -(-+*')+''+( : ::+( -+('/0/0 ' '+ / /)+

2. O0 '+ 9/ : )* +;/0'/0 0 '+ /*)/0 7/' '+ *;-0, /'

/(+*'( 0 '+( ::/*+(, '+( +0*/+, /0+-+0+0' 8+(/:/*'/0 : '+

''+;+0' *0*+(0/0 '+ 9+*' : '+ /)+, -(+*'+ -(:/'9//', -(/*+

)'/:/*'/0 0 '+ *0'+0' : '+ *);+0' ;+0'/0+ /0 '+ A00+)(+ 0

'+( --+( :)(0/+ 9 '+ *;-0, %E CONFIRM ''

11. C+('/:/*'+ :(; A(*/'+*' ( 0 '+( *;-+'+0' )'(/' 0 -(+*' /;-+;+0''/0 *+)+

:)(0/+

9 '+ *;-0, /: --/*9+.


22/55

12. R+-(' :(; G8+(0;+0' +0*/+ +-+(' +0*/+ *0)'0' *;-0 (+(/0 ;(+'

+;0

0 )-- :( '+ -()*', /0)'( *+0(/, '0/0 : '+ :(+/0 *9('(, +'*.

13. D*);+0' /0 )--(' : '+ /0:('()*')( :*//'/+, (7 ;'+(/ 8/9//', +'*.

14. A)/'( R+-(' /0/*'/0 );;( : )/'+ **)0' :( '+ -+(/ /0*)/0 '' :

)9//(/+ : '+

*;-0.

15. S'* E*0+ :( -('/*)( : D/(+*'(/-? ( '+ C;-0

S+*(+'(

*+('/:/*'+ /0 '/ (+(.

1". R+8)'/0 *+('/:/*'+ : *;-0 +' /8+0 9 G8+(0;+0' V)+( ( 0 '+( --(8+V)+(.

2#. E08/(0;+0' *+(0*+ /8+0 9 P)'/0 C0'( B( : '+ S''+ G8+(0;+0' ( '+

C+0'(

G8+(0;+0' --/*9+.

21. C+('/:/*'+ :(; *;-0 /*/'( /0 (+( ' *;-/0*+ : + -(8//0 : '+ P(-+*')

--/*9//' : FERAMRTP -(8//0 ' '+ *;-0.

22. O'+( *);+0', (+-(' +'*. (+ (++80' 0+*+( :( '()+, :/( 0 +' /8+ +'/?.

23. T()+ *- : '+ B( (+)'/0 -+ 9 '+ /)+( )'(//0 (+-(++0''/8+ : '+R+/'(( ' *'

0 /' 9+: /0 (+'/0 ' 0/0 : '*/08+'.

PLACE LEAD MERCHANT BANKER >S? TO THE ISSUE


>U-'+ '/ &)0+ 1#, 2##?

P+ 253 : 34!

>? '+ (:' -(-+*')+''+( : ::+( :(7(+ ' '+ B( / /0 *0:(;/'

7/' '+ *);+0', ;'+(/ 0 --+( (++80' ' '+ /)+

>9? '+ + (+


23/55

PLACE LEAD MERCHANT BANKER>S? TO THE ISSUE


>U-'+ '/ &)0+ 1#, 2##?

P+ 254 : 34!

ANNE=URE TO THE DUE DILIGENCE CERTIFICATE FOR THE ISSUE OF

BY LIMITED

1. M+;(0); 0 A('/*+ : A*/'/0 : '+ C;-0.

2. L+''+( : I0'+0'SIA R+/'('/0F(+/0 C9('/0 A--(8A--(8 :(

/;-(' : -0' 0 ;*/0+(, /: --/*9+.

3. N+*+( *+(0*+ :(; 8+(0;+0', '')'(, ;)0/*/- )'(/'/+ +'*. :(

/;-+;+0''/0 : '+ -(+*', 7+(+8+( --/*9+.

4. D*);+0' /0 )--(' : '+ '(* (+*( 0 +-+(/+0*+ : '+ -(;'+( 0

'+/( -(:+/0 *;-+'+0*+.

5. L/'/0 (++;+0' : '+ C;-0 :( +/'/0 +*)(/'/+ 0 '+ S'*

E*0+.

6. C0+0' +''+( :(; C;-0 )/'(, B0+( ' /)+, B0+( ' '+

C;-0, L+ M+(*0' B0+(, B(+( 0 7+(+ --/*9+, P(-+

T()'++.. A--/*'/0 ;+ 9 '+ *;-0 ' '+ :/00*/ /0'/')'/090 :( :/00*/

/'0*+ -+( 9+*' : '+ I)+ 0 *-/+ : (+'/8+ 0*'/0 +''+(.

!. U0+(7(/'/0 +''+( :(; '+ -(-+ )0+(7(/'+( ' '+ /)+.

". A)/'+ B0*+ S++' : '+ C;-0P(;'+( *;-0/+ :( (++80'

-+(/.

1#. A)/'( *+('/:/*'+ (+(/0 '9+0+:/' 8/9+ ' '+ C;-0,

S(++( 0 D+9+0')(+ +(.

11. C+('/:/*'+ :(; A(*/'+*' ( 0 '+( *;-+'+0' )'(/' 0 -(+*'

/;-+;+0''/0 *+)+ :)(0/+ 9 '+ *;-0, /: --/*9+.

12. R+-(' :(; G8+(0;+0' +0*/+ +-+(' +0*/+ *0)'0' *;-0

(+(/0 ;(+' +;0 0 )-- :( '+ -()*', /0)'( *+0(/,'0/0 : '+ :(+/0 *9('(, +'*.

13. D*);+0' /0 )--(' : '+ /0:('()*')( :*//'/+, (7 ;'+(/ 8/9//',

+'*.

14. A)/'( R+-(' /0/*'/0 );;( : )/'+ **)0' :( '+ -+(/ /0*)/0

'' : )9//(/+ : '+ *;-0.

15. S'* E*0+ U-'+ '/ &)0+ 1#, 2##?

P+ 255 : 34!

16. A--/*'/0 ' RBI 0 --(8 '+(+: :( ';+0' : (+ ' 00(+/+0',

/: 0, :( *9('/0 '+(; 0 *0/'/0.1. M/0)'+ : B( 0 G+0+( B ;++'/0 : '+ *;-0 :( ;''+( 7/*

(+ /0 '+ -(-+*').

1!. D+*('/0 /0 F(; 32 :(; D/(+*'( >:( -('/*)( : D/(+*'(/-? ( '+

C;-0 S+*(+'( *+('/:/*'+ /0 '/ (+(.

1". R+8)'/0 *+('/:/*'+ : *;-0 +' /8+0 9 G8+(0;+0' V)+( ( 0

'+( --(8+ V)+(.

2#. E08/(0;+0' *+(0*+ /8+0 9 P)'/0 C0'( B( : '+ S''+

G8+(0;+0' ( '+ C+0'( G8+(0;+0' --/*9+.

21. C+('/:/*'+ :(; *;-0 /*/'( /0 (+( ' *;-/0*+ : + -(8//0

: '+ P(-+*') --/*9//' : FERAMRTP -(8//0 ' '+

*;-0.

22. O'+( *);+0', (+-(' +'*. (+ (++80' 0+*+( :( '()+, :/( 0

+' /8+ +'/?.

23. 355>D++'+?


24/55

PLACE LEAD MERCHANT BANKER >S? TO THE

DATE ISSUE %ITH HIS THEIR SEAL >S?

355 O;/''+ '+ :7/0 *)+ 8/+ SEBI C/(*)( N. SEBICFDDILDIP142##5251 '+

&0)( 25,

2##5

T()+ *- : '+ B( (+)'/0 -+ 9 '+ /)+( )'(//0 (+-(++0''/8+ : '+ R+/'((

' *' 0 /'

9+: /0 (+'/0 ' 0/0 : '*/08+'.

>U-'+ '/ &)0+ 1#, 2##?

P+ 256 : 34!

CHAPTER5

CAPITAL MARKET

M(+' :( L0 '+(; :)0/0

M(+' ;(+ :( (+'/ /08+'( .

A *+ -+*)'/8+ ;(+'.

V'/+ ;(+'.

C-/' ;(+' *;-(/+ : .

I..1..ISSUERS

CORPORATES.

COMMERCIAL BANKS,FINANCIAL INSTITUTIONS.

I..2. INSTRUMENTS..> PRODUCTS?

E$UITY SHARES..

PREFERENCE SHARES.

DEBT FAMILY.

DEBENTURES

.FULLY CONVERTIBLE ,

PARTLY CONVERTIBLE ,

NON CONVERTIBLE,

BONDS..CONVERTIBLE, REDEEMABLE

I3.. INTERMEDIARIES..

MERCHANT BANKER.

REGISTRAR TO ISSUE.

BANKERS TO ISSUE.

UNDER%RITERS

BROKERS.

DEBENTURE TRUSTEE.

I..4.. INSTITUTIONS..

STOCK E=CHANGES.

DEPOSITORIES.

CUSTODIANS.

CREDIT RATING AGENCY.


25/55


26/55

SEBI GUIDELINES %ILL BE FOLLO%ED .

MERCHANT BANKER IS THE IMPORTANT INTERMEDIARY IN

CARRYING OUT THIS E=ERCISE %ITH A PROPER PLANNING AND

COORDINATION.

INVESTORS CAN SUBSCRIBE TO THE ISSUE OR MAKEA BID FOR THE

ISSUE DEPENDING UPON THE NATURE OF ROUTE TAKEN BY THE

ISSUER.

SEBI HAS GIVEN GUIDELINES FOR THE PLAYERS IN THE CAPITAL

MARKET

CHAPTER..6

MERCHANT BANKING

NECESSITY OF SUCH SERVICES..

CHANGE IN INDUSTRIAL SCENARIO..GRO%TH IN CORPORATE SECTOR

NE% SOURCES OF FUNDS.

LACK OF PROFESSIONAL SERVICES

PROPER CAPITAL STRUCTURING.

COMPLE=ITY IN CAPITAL MONEY MARKET PRODUCTS.

IDENTIFYING APPROPRIATE SOURCE.

ACTIVITIES

PRO&ECT COUNSELLING

PRO&ECT APPRAISAL SERVICES

LOAN SYNDICATION

ISSUE MANAGEMENT.

TREASURY MANAGEMENT SERVICES.

INTERNATIONAL FINANCE.

ADVISORY SERVICES..

ROLE AND RESPONSIBILITIES OF MERCHANT BANKER.

MERCHANT BANKERSELF

A PROFESSIONAL IN THE FINANCE FIELD.

A %ELL ORGANISED FINANCE PROFESSIONAL.

IDENTIFIED AS A CORPORATE FRIEND.

A %ELL INFORMED INTERMEDIARY.

$UALITIES

GOOD LISTENER.

PLANNER.

ORGANISER.

COORDINATOR.


27/55

RELATIONSHIP MANAGER.

INDUSTRYMARKET KNO%LEDGE.

ANALYTICAL SKILLS.

ISSUE ASSIGNMENT...MERCHANT BANKER

LEAD THE TEAM

CORRECT GUIDANCE PROPER PRICING

PROFESSIONAL %ORK.

SUCCESS.

MERCHANT BANKER

S) ..

B+ ' D)+ //+0*+ 7(.

U0+('0 '+ D/*)(+ *0*+-'.

D P(-+( -(/*/0 : '+ +*)(/'/+.M(+' '+ +*)(/'/+ +::+*'/8+.

ISSUE MANAGEMENT

F(; ..M+(*0' B0+( 8/+7

ONLY ACTIVITY ..VISIBILITY OF M. B.

PLAN THE ACTIVITY.

ACTIVITY CHART AND RESPONSIBILITY.

GOOD RELATION %ITH OTHER INTERMEDIARIES .

UNDERSTAND THE MARKETPRICE THE ISSUE PROPERLY.

EACH ASSIGNMENT IS DIFFERENT.

DRAFTING OF THE OFFER DOCUMENT AND CAPITAL STRUCTURE IS VERY IMPORTANT.

MARKETING .MERCHANT BANKER

PROPER PRESENTATION TO INVESTORS.

IDENTIFY PROPER SOURCES.

NOT A SECONDARY MARKET MAN

RESPONSIBILITIES.

COMMITTMENT TO ISSUER.

COMMITTMENT TO INVESTORS. > DISCLOSURE ?

FOLLO% THE ETHICS.

NO COMPROMISES.

GOALSUCCESS

FOLLO% UP. RELATION BASED.

CONTINUITY IN SERVICES.

BUILDING UP SELF IMAGE

MORE PROFESSIONAL APPROACH.


28/55

CASE STUDY FOR A MERCHANT BANKING ACTIVITY..

COST OF THE PRO&ECT HAS BEEN GIVEN FOR T%O DIFFERENT SITUATIONS.

HO% A MERCHANT BANKER ADVISES HIS CLIENT ABOUT THE FURTHER PLAN OF

ACTION FOR FUNDING .

RS IN LAKHS I II

NE% UNIT 6 YEARS OLD

LAND 2#.## 5#.##

LAND DEVELOPMENT 5.## 1#.##

BUILDING

FACTORY 5.## 25#.##

OFFICE 2#.## 1##.##

$UARTERS 5#.## 15#.##

PLANT ANDMACHINERY . 3##.## "##.##

MISC

FI=ED ASSETS 5.## 2##.##

PRELIM AND

PREOP E=P 5#.## 15#.##

CONTINGENCIES.. 35.## 14#.##

TECHNOLOGY

TRANSFER.. ##.## 3##.##

%ORKING CAPITALMARGIN. 2#.## 15#.##

TOTAL 65#.## 24##.##

SOURCES OF FUNDS..

GROUP1

TERM LOAN ..FROM BANKS, FIS, SFCS AND NBFCS

FOREIGN CURRENCY LOAN ..FROM CBS AND FIS

D.P.G ...FROM CBS

LEASING FINANCE FROM .NBFCELCO..

HIREPURCHASE..FROM ..NBFC.HP CO.


29/55


30/55

P(+*'1.

R..65#.## L

F)0+.

R 325.## .P(;'+( *0'(/9)'/07/ 9+ +


31/55

> ' 07 ;(+ 9)' '+ *'/8/'/+ ..READ THE ADVERTISEMNT OF AN

ISSUE.RECOMMENDATIONS ..VISIT SEBI %EBSITE AND READ THE OFFER

DOCUMENTS UNDERSTAND THE CAPITAL STRUCTURE.LOCK IN PERIOD..DUE

DILIGENCE DONE BY THE [email protected] THE ALLOTMENT ADVT TO UNDERSTAND THE

CONCEPT OF BASIS OF ALLOTMENT .?

DEBT SECURITIES LISTING

SEBI HAS COME OUT %ITH THE GUIDELINES REGARDING PUBLIC OFFER AND LISTING

OF DEBT SECURITIES DURING M 2##!..

T+ )/+/0+ (+ *+( 0-(;'+( *0'(/9)'/0, /*)(+ ,D+9+0')(+ '()'++ +'*

TRADING..SECONDARY MARKET OPERATIONS.

T(/0 ;+0 9)/0 0 +/0 : +*)(/'/+ '' (+ /'+ 0 '+ '* +*0+.

T+ '(/0 ' 9+ 0+ '() 0 )'(/+ 9(+( 7 / ;+;9+( : '* +*0+0 (+/'+(+ 7/' SEBI..

T+ */+0' ) 8+ *0'(*' /0+ 7/' -+*/:/+ 9(+( ' '+ '(0*'/0.

T 9+*)+ : 0/0+ '(/0 '+ +''+;+0' 0 '(0-(+0* : '+ '(0*'/0 *0 09+

)0+(' 9 '+ */+0'.

T+(+ (+ 9/* '(++ '-+ : I08+'( ..-+*)'/8+.(' '+(; 0 '+(; ..

@S+*0( ;(+' :*//''+ 9)' + 0' +0)(+ /


32/55

V(/) :*'( ::+*' '+ ;(+' (+)(.

S/0*+ -' '7 +( C-/' ;(+' /0'()*+ D+(/8'/8+ '(/0, /0 '+ :(; : O-'/0

0 :)')(+.

51 C;-0/+ 8+ 9++0 /+0'/:/+ 7/* *0 9+ *0/+(+ )0+( '/ *+;+.

T/ ;(+' / +' ' +8+-.

A '+ -+('/0 (+ '+*0 (/8+0.

T+ +*0( ;(+' '(0*'/0 >'(/0?/0 +;' :(;' 0,.

STOCK E=CHANGE'')'(/ +:/0+ 0 9 : /0/8/) 7+'+( /0*(-('+ ( 0'

*0'/')'+ :( '+ -)(-+ : /'/0 ( *0'(/0 '+ 9)/0+ : +/0 ( +/0 /0 +*)(/'/+,.

S+*)(/'/+ *0'(*'> R+)'/0 ? *' 1"56

IMPORTANCE..

SUPPORT FOR &OINT STOCK ENTERPRISES.

FACILITY TO DEAL IN SECURITIES.

LI$UIFY THE CAPITAL IN AN ENTERPRISES BY AN INVESTOR.

%ITHOUT STOCK E=CHANGE THE CAPITAL %OULD HAVE BECOME

IMMOBILISED.

S'* +*0+ (+ )9+*' ' -(/;( (+)'/0..

T+ S+*)(/'/+ 0 *0'(*' (+)'/0 *' 1"56..' (+)'+ )0+/(9+ '(0*'/0 /0 +*)(/'/+

21 (+/0 '* +*0+ ..

CLOSURE OF SOME E=CHANGES

OTCEI.OVER THE COUNTER E=CHANGE OF INDIA.

> *0 9+ *0/+(+ 22 0 +*0+?

C;;+0*+ -+('/0 /0 1""1.

M++ 0 '+ NASDA$ > N'/0 */'/0 : S+*)(/'/+ ++( 0 )';'+


33/55

T(0-(+0* : -+('/0.+0


34/55

FOR BOOK BUILDING PROCESS THE SUBSCRIPTION HAS TO BE MADE ONLY BY THE

DEMAT ACCOUNT HOLDERS.

CUSTODIAL SERVICES.

R+'/0 ' +*)(/'/+ ;+0 ..:+ ++-/0 : +*)(/'/+ : */+0' 0 -(8//0 /0*/+0' +(8/*+..

M/0'/0/0 : **)0'.

C+*'/0 : 9+0+:/'.

R+*0*//0 '+ (+*(.

DERIVATIVES

A(+ /0'();+0' 7+ 8)+ / +(/8+ :(; '+ 8)+ : 0+ ( ;(+ )0+(/0 +-)(+.

C;;0 070 +(/8'/8+(+.FOR%ARDS..FUTURES..

OPTIONS.S%APS.

FUTURES.BASED ON INDICESARE .INDE= FUTURES.

BASED ON STOCKS..ARE..STOCK FUTURES.

ON THE SAME LINES THE OPTIONS ARE DEFINED..

FOR%ARDS..

A FOR%ARD CONTRACT IS A CONTRACT TO BUYSELL THE UNDERLYING ON A FUTURE

DATE AT A PRICE THAT IS DETERMINED TODAY.

NEGOTIATED BET%EEN T%O PARTIES

OUTSIDE THE FRAME %ORK OF STOCK E=CHANGE

THE CONTRCTS ARE ILLI$UID.

RE NEGOTIATE %ITH MUTUAL CONSENT..

FUTURES

ARE LIKE FOR%ARDS , E=CEPT THAT THEY ARE TRADE IN STOCK E=CHANGE. ONTHE BASIS OF STANDARD CONTRACTS

T+ '(+ )(0'++ 9 S'* +*0+.

N+'/'/0 / 0 '+ -(/*+.

P/'/0 (+ /


35/55

O'+( -('> O-'/0 7(/'+(? / 9/+ ' '+ '+(; : '+ *0'(*'.

C0'(*' -+ 0 +-/('/0 '+.

O-'/0 -(+;/); ' 9+ -/ 9 '+ -'/0 9)+(.

A0 -'/0 ' 9) / *+ C -'/0..

A0 -'/0 ' + P)' -'/0

A0 A;+(/*0 -'/0 *0 9+ ++(*/+ 0'/;+ 9+:(+ ;')(/'. S'* -'/0

A0 E)(-+0 -'/0 *0 9+ ++(*/+ 0 0 ;')(/'.I0+ -'/0.

S%AP..

A 7- / 0 ((0+;+0' 9+'7++0 '7 -('/+ ' +*0+ '(+; : -;+0' **)'+ 0

/::+(+0' 9+.

MARGINS..

I0 '+ C-/' ;(+' +*0( ;(+' -+('/0 ..'+(+ / *0*+-' : 8/0 +


36/55

ACCUMALATE

SELL

BOOK PROFITS

HOLD . EARLIER BUY RECOMMENDATIONS..SAYS HOLD MEANS IT HAS BEEN DO%N

GRADED.

OVER%EIGHT

OUTPERFORMER

UNDER%EIGHT

UNDERPERFORMER

INTERNATIONAL FINANCIAL REPORTING STANDARDS..

A**)0'/0 '0( +8+-+ 9 '+ I0'+(0'/0 **)0'/0 '0( 9( 7/* / 9

'0( :( -(+-('/0 : :/00*/ ''+;+0' .

I0 I0/ :(; A-(/ 2#11..' 9+ :7+ 9 *;-0/+ /'+ 0 BSE 0 NSE , '+( '0 0+' 7('

: ( 5## *(.

B0 0 /0)(0*+ *;-0/+ 7/ *08+(+ :(; A-(/ 2#13.

I0 I0/ /' 0++ '(/0/0 , /;-+;+0'/0 IT )--(',/0'+(0 /0:('()*')(+

I0/ 0++ ' ;+0 SEBIW I0)(0*+ 0 RBI (+)'/0.

STOCK MARKET INDE=..

I' / 0);9+( ;+)(/0 '+ (+'/8+ 8)+ : ()- : '*.

V)+ : '+ ()- *0+ 7/+ '+ (+ '(+.

I' / '+ /'(/* *;-(/0 : : (+')(0 0 ;0+ /08+'+ /0 '* ;(+'.

I' (+/' (+:+*' '+ ; : '+ ;(+'.

F( ;0 /' / '+ -)+ : '+ +*0;.

M(+' I0+ (+ *0'()*'+ 9 7 : 8)+ 7+/'+ ;+'. %(+ 9+ 0 9+ /0+ ('+.

VARIOUS ANALYTICAL APPROACH FOR VALUATION OF STOCKS..

F)0;+0' 0/.

P(*+ : /0 ' *;-0@ 9)/0+ :(; /08+';+0' -/0' : 8/+7.

A0/ : C;-0@ ;0+;+0' *-9//'/+,*;-+'/'/8+ 80'+ , + ('/ : 9)/0+,

T+*0/* A0/

F)')(+ 8)+ : (+, 8);+ '(+, + 0' ' :/00*/ ( :)0;+0' S( -(/*+

;8+;+0' '+*0/* /0/*'(, *(' -''+(0.

$)0'/''/8+ 0/.

P(*+ : +'+(;/0/0


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I PO GRADING..

IPO (/0 / +(8/*+ /;+ ' :*//''/0 '+ +;+0' : +


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SECTION.!

NON BANKING FINANCIAL COMPANIES..> NBFC?

T++ (+ '+ /0'/')'/0 7/' )' -(-+( +:/0/'/0 . T+ *0 **+-' +-/' 0 +0 /0 0

;00+(.

T++ /0'/')'+ 7+(+ /0 -(+ B0/0 . RBI 9+*;+ '+/( (+)'( )'(/' /0 1"".

I0 '+ ;/'+(; (+8/+7 : M0+'( -/* : 2##6 X2## ' '+ (+


39/55


40/55

HIRE PURCHASE

MODE OF FUNDING THE GOODS TO BE PURCHASED AT A FUTURE DATE.

INITIALLY LET ON HIRE..HIRER HAS AN OPTION TO PURCHASEPAYMENT OF

INSTALMENTS FOR A SPECIFIC PERIOD .

TRANSACTIONS THROUGH A CONTRACT.

PROPERTY PASSES TO HIRER ON PAYMENT OF LAST INSTALMENT.

EACH INSTALMENT IS TREATED AS HIRE CHARGES.

HIRER CHARGES THE DEPRECIATION TILL HE USES THE ASSETS.

IT IS A BALANCE SHEET ITEM.

HIREE HAS A RIGHT TO TAKE BACK THE ASSET IN CASE THE INSTALMENT IS NOT

PAID.

SIMILAR TO BANK TERM LOAN.

MARGIN IS STIPULATED.

RATES %ILL BE $UOTED AS FLAT RATE.

THE EMI PAID %ILL BE BIFURCATED AS PRINCIPAL AND INTEREST FOR

ACCOUNTING PURPOSE. NORMALLY THIS %ILL BE USED TO AC$UIRE MOVABLE OR SMALL

E$UIPMENTS.

MORE POPULAR IN VEHICLE FINANCING.

BOTH HIRER AND HIREE HAVE DUTIES, RESPONSIBILITIES AS DEFINED IN THE

AGREEMENT.

THE APPRAISAL IS SAME AS BANK TERM LOAN.

CREDIT RATING

S E B I IS THE REGULATORY AUTHORITY.

MEANS ESTIMATING %ORTH OR VALUE OF OR ASSIGN VALUE TO..

THIS IS ONLY FOR INDUSTRIAL SECURITIES

RATING E=PRESSES THE CREDIT $UALITY OF THE SECURITY USING SYMBOLS.

RATES THE SECURITY NOT THE ISSUER.

NOT A RECOMMENDATION BY THE RATING AGENCY.

PROCESS EVALUATES THE RISK ASOCIATED %ITH THE INSTRUMENT.

DONE FOR DEBT INSTRUMENTSFI=ED DEPOSITS.

RATING INSTITUTIONS

1. CRISIL.1"!!PROMOTED BY I C I C I .

2. ICRA1""#..PROMOTED BY I F C I

3. CARE1""3..PROMTED BY I D B I

4. FITCHPRIVATE SECTOR.

NEED..

GRO%ING CASES OF DEFAULT BY COMPANIES.

&UDGING THE DEBT OBLIGATION.

INVESTOR SHOULD UNDERSTAND THE RISK.


41/55

BENEFITS

INVESTORS.

RECOGNITION OF RISKS

CREDIBILITY OF THE ISSUER.

SYMBOLS EASY TO UNDERSTAND.

INVESTMENT DECISION.INDEPENDENTLY DONE.

SELECTION INSTRUMENTS FOR INVESTMENTS.

ISSUER..

RATING AS A MARKETING TOOL.

LO%ER COST OF FUNDS.

REACH MORE INVESTORS.

SELF DISCIPLINE BY ISSUERS.

GOOD RATED INSTURMENTSIMPROVES ..GOOD %ILL. REPUTATION.

ADVANTAGES IN GENERAL.

SOURCE OF RELIABLE INFORMATION.

STRENGTHS AND %EAK NESSES IDENTIFIED.

INVESTMENT MARKET ..%ILL BE STRONGER.

SYMBOLS

HIGHEST SAFETY.. AAA

HIGH SAFETY. AAA

ADE$UATE SAFETY ..AA

MODERATE SAFETYA

INADE$UATE SAFETYBBB

HIGHRISKBB

SUBSTANTIAL RISK..B

DEFAULT.C

RATING PROCESS.

MANUFACTURING COMPANY..

1. BUSINESS ANALYSIS.

2. INDUSTRY RISK.MARKET.

3. OPERATING EFFICIENCY.

4. MANAGEMENT ANALYSISPOLICIESSTRATEGIES.S%OT..PHILOSOPHY

DISCUSSION %ITH KEY PERSONNEL.

5. FINANCIAL ANALYSIS..ACCOUNTING $UALITYEARNINGSCASH

FLO%S

FINANCIAL SERVICES COMPANY.


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1. CAPITAL ADE$AUCY.

2. ASSET@S $UALITY

3. LI$UIDITY

4. PROFITABILITY

5. FUNDAMENTAL ANALYSIS

6. REGULATORY ENVIRONMENT.

LOT OF REFORMS HAS BEEN DONE IN THE SYSTEM. T%O AGENCIES RATING IS A

MUST.

THE RESPONSIBILITY OF THE RATING AGENCIES IS YET TO BE LOOKED INTO.

MUTUAL FUNDS..

A '-+ : F/00*/ /0'+(;+/( '' - '+ :)0 : /08+'( 7 ++ '+ ;+ +0+(

/08+';+0' 9+*'/8+ 0 /08+' /0 /::+(+0' :/00*/ -()*'.

T+ /08+'( (+ '+ U0/' +(.

STRUCTURE OF MUTUAL FUNDS IN INDIA..

1. SPONSOROR

2. TRUSTEES.

3. A.M.C.

4. CUSTODIANS

5. AGENTS.

6. R T I

. BANKS

SPONSOROR ESTABLISHES FUND.

REGISTRATION %ITH S E B I .

APPOINTS BOARD OF TRUSTEES.

TRUST DEED DEFINES THE OB&ECTIVE EACH SCHEMES.

TRUSTEES HOLD ASSETS ON BEHALF OF UNITHOLDERS.

APPOINTS ASSET MANAGEMENT COMPANY.

APPOINTS CUSTODIAN OF THE FUND.


43/55

A M C@S FLOATS THE SCHEMES AND MANAGES THEM ACCORDING TO THE

SEBI REGULATIONS.

CUSTODIAN HOLDS THE SECURITIES IN SAFE KEEPING.

REGISTRAR MAINTAINS THE UNIT HOLDER@S ACCOUNTS.

SCHEMES DRA%N UP %ITH A PURPOSE .THE NAME INDICATES THE CATEGORY

GRO%TH FUNDS.

BOND FUNDS.

MONEY MARKET FUNDS.

E$UITY INCOME FUNDS.

SECTOR FUNDS.

T%O TYPES OF FUNDS ARE THERE..

1. OPEN ENDED FUNDS..

T++ '-+ : *+;+ (+ -+0 :( -+*/:/* -+(/ /0 '+ /0/'/ ::+( .

A0 /08+'( *0 +0'+( ( +/' /0 '/ *+;+ '+ S+*0( ;(+' / -+0 .

T+ +*0( ;(+' -+('+ 0 NAV *0*+-'.

2. CLOSE ENDED FUNDS.

T++ (+ :)0 -+0 :( -+*/:/* -)(-+ .;/0 ' 9+0+:/' *+;+ 7+(+ '+ :)0

/08+'+ 9 '+ )0/' +( / *+ /0 :( '(++ +( ( ;(+ . S;+ *+;+ (+ /'+ 0 '*

+*0+ :( +*0( -+('/0 .

N A V .NET ASSET VALUE

M(+' 8)+ : /08+';+0' R+*+/89+ O'+( **()+ /0*;+ '+( +'

A**()+ +-+0+ '+( -9+'+( /9//'/+

N : )0/' )' '0/0 0 NAV '+.

C*)'/0 : NAV / 0 /0'+0/8+ -(*+ '' '+ -*+ /0 (' '/;+ :(;+ ' '+ +0 : +*

9)/0+ .

T+ + ( (+

-)(*+ : )0/' (+ 9+ 0 NAV -(/*+.

E=IT LOAD.

S;+ *+;+ 7/' 0 /0'+0'/0 : ;/0 '+ /08+'( 0' ' (+++;


44/55

R/ --+'/'+

I08+';+0' '+0)(+..(/ /08+';+0' ;)' 0' 9+ + :( 0. I' 7/ '+ '/;+ ' (+*8+(.

I08+';+0'

P+(:(;0*+.

CRISIL HAS *;-/'+ -+(:(;0*+ (0/0 ;+'..(0/0 : ;)') :)0 *+;+'7

+( NAV /'( 1## -(': /*)(+ 0 (0/0 '+.

AMFI. A-+ 9 : (+/'+(+ AMC@ 9+*'/8+ : '+ AMFI / ' -(;'+ /08+'(@

/0'+(+' 9 +:/0/0 0 ;/0'/0/0 / +'/* 0 -(:+/0 '0(.

S E B I / '+ (+)'( )'(/' ..

MUTUAL FUNDS INVESTMENT..

T+ :7/0 (+ '+ (+ : /08+';+0'

ADR@SGDR@S /)+ 9 I0/0 ( :(+/0 *;-0/+.

E FACTORS?

A0 9)/0+ *0*+(0 > THE CLIENT ? +/0 ( +(8/*+ ' '(+ *)';+(>THE

CUSTOMERS? 7+(+ 9 '+ :*'( -)(*+ '+ */+0'@ **)0' (+*+/89+ 9 +9' +/'+(

7/' ( 7/')' (+*)(+ ' '+ */+0' 0 /0 (+'/0 '+(+' *0'( '+ *(+/' +'+0+ ' '+

*)';+( 0 ;/0/'+( '+ + ++(.

S; 0 ;+/); *+ )0/' 0++ )* +(8/*+.

C+*'/0 : (+*+/89+ 0 '/;+.

D+ + ;(+ *;-/*'/0.

FACTORS DOES..

A((0+;+0' : *+*'/0 +9'.

A;/0/'('/0 : + ++(.

C8+(/0 *(+/' (/ /088+.

A8/( +(8/*+ 9 '+ ;(+' /0:(;'/0.

FACTORS.+ 7/' (+*)(+ :*'(/0/0 I0/.

FOR A CLIENT

OFF BALANCE SHEET ITEM.


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INSTITUIONS FOLLO%S UP.

MORE TIME FOR BUSINESS DEVELOPMENT

IMPROVE RETURN.

CAN AVOPID RISKY CUSTOMER.

COMFORTABLE CASH FLO%.

GOOD REPUTATION IN MARKET.

COMPARED TO BILLS DISOCUNTING>BANKS?. P*+ : +(8/*+.

N )-:(0' :++.

E -(*+)(+.

M/;); :)0 8/9+.

L+( *' : :)0.

S'()*')(+ :( +* *)';+(.

O:: 90*+ ++' /'+;.

I+0'/:/*'/0 : *)';+(.

A : 07 F*'( 8+ /0'()*+ -)(*+ 9/ :*'(/0 7+(+ /0 -)(*+ ;+ 0 *(+/'7/ 9+ :/00*+.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

FORFEITING

F/00*/0 (+*+/89+ ../0'+(0'/0 '(+.

P)(+ :/00*/0 ((0+;+0'.

%/' )' (+*)(+.

A (/ *8+(+.

A*'/8/' -(+ 8+( 3 ' 5 +(.

E-('+( + ' /;-('+( 0 +:+((+ -;+0' 9/.

B/ (70 9 +-('+( 7/ 9+ **+-'+ 9 I;-('+(.

P(;/( 0'+ /0 )(0'++ 9 +0(+;+0' 9 '+ /;-('+(@ 90.> AVAL?

E-('+( +0'+( /0' 0 ((0+;+0' 7/' FORFEITER ' + '+ 8+ 0'+ '

/*)0' 7/' )' (+*)(+.

DISCOUNTING OF THESE GUARANTEED NOTESPRICING DEPENDS UPON.

TERMS OF THE NOTES.

RATING OF THE GUARANTOR .

MARGIN TO COVER THE RISK

DAYS OF GRACE,

COMMITMENT CHARGES

RATE OF INTEREST.

FORFEITOR CAN HOLD THESE TILL MATURITY OR ELSE CAN SELL IT AS HIGHLY

SECURED PAPER

I;-('0' '/0 +(+ / '+ :/00*/ -/'/0 : '+ 90 7/* /8+ )(0'++.

!!!!!!!!!!!!!!!!!!!!!!!!!!

VENTURE CAPITAL

CONCEPT FUNDING..INNOVATION.ENTERPRISE.


46/55

FOCUSSES ON GRO%TH.TESTING THE REALITY OF THE CONCEPT.

LONG %AIT FOR RETURNS.

HIGH GRO%TH HIGH RISK..

INVESTMENT IN THE FORM.E$UITY.$UASI E$UITY

DEBT..CONDITIONAL LOAN.

INVESTMENT IN UNTRIED TECHNOLOGY.

AT SEEDEARLY STAGE OF FINANCINGSUPORT THE CONCEPTRD

SUPPORTSTART UPS.GRO%TH STAGEFINANCING FULL SCALEPRODUCTION.

ALSO FUNBDS TAKE OVER ..AC$UISITION..BUY OUT ..

VC HAS $UALITY OF A COMMERCIAL BANKER..STOCK MARKET

INVESTOR.ENTREPRENEUR.

GRO%TH OF THE INDUSTRY.

1"!5 SA% DEVELOPMENT FUNDS. SET UP BY D F I @S

1""# INDIA SA% SPONSORED VC@S AND PRIVATE VC@S

21 VC@S ARE OPERATING.%ITH FUNDS

DRA% BACKS.

PRIORITISATION OF THRUST AREAS.

LACK OF REGIONAL FOCUS.

LACK OF FOCUS ON ENTREPRENEURIAL DEVELOPMENT.

SUCCESS OF VC@S..

IDENTIFICATION OF PROPER PERSON BEHIND THE

PRO&ECT.ENTREPRENEURIAL SKILLS.PROFESSIONAL APPROACHABILITY

TO INNOVATEPERSUEINTEGRITY

TECHNOLOGY.. GRO%TH PROSPECTS.

SHOULD BE IN APOSITION TO DISTINGUISH BET%EEN..POTENTIAL

PERFORMER.NON STARTER..NON PERFORMER.

E=IT ROUTE..OR DISINVESTMENT.

PROMOTERS BUY BACK

IPO

ALTERNATIVE INVESTOR.

VC@S SHOULD LOOK INTO SMALL AND MEDIUM ENTERPRISES FOR SUCCESS.

GOVERNMENT POLICY GIVING INCENTIVES %ILL HELP TO IMPROVE THIS

INDUSTRY.

S E B I IS THE REGULATORY AUTHORITY.APPROVAL AND LICENSE FROM S E B I IS

A MUST >SEBI > VENTURE CAPITAL FUND? REGULATIONS 1""6.?

..

PRIVATE E$UITY

N' +:/0+ /0 0 :/00*/ /'+(')(+


47/55

M(+ 070 P(/8'+ -*+;+0' .

C0 9+ + /0' '+( '+ :/00*/0.

C0 :/00*+ A*


48/55


49/55

I0 +* : '++ *+ '+ 8)'/0 : '+ C;-0 0 -(/*/0 : '+ +


50/55

A;)0' -/ / /0 '+ 0')(+ : +:+((+ -;+0' *;-)0/0 :( '+ +(8/*+ (+0+(+.

T+(+ ) 9+ *0+ /0 ''/')+ '7( -+0/0+( 7 ) 9+ '(+'+ (+-+*'+ +0/(

*/'/+0 : '+ *)0'(.

M0+;+0' -(8/+ > M+0 ? '' -+(0 7/ 9+ 9+ ' /8+ +*+0' , /0+-+0+0' , +:

(+-+*' 0 ''/0 '0( + M('+ 9*+ +*)(/'/+?

S+*)(/'/'/0 / -(*+ 9 7/* '+ :(+*' :)')(+ /0*;+ : 0 +0'/' / '(0:(;+ 0

+9' /0'();+0' .

S)/'9+ (+-*/0 '+ :)')(+ C :77/* *0 9+ -)' ' -()*'/8+ )+ /0 '+ 9)/0+.

ORIGIN..

1"# /0 USA.

M' : '+ +8+-+ *)0'(/+ '('+ ;(+' :( +*)(/'/+ +'.

1""1 . F/(' '(0*'/0 ' -*+ /0 I0/.

ASSET SECURITISATION ../ +:/0+ *(+:) '()*')(+ -(*+ 7+(+9 0 0 '+(

(+*+/89+ (+ -*+ , )0+(7(/''+0 0 /0 '+ :(; : +' 9*+ +*)(/'/+.

I' / -(*+ 9 7/* 0 // SPV? 0(; /08+';+0' 90+( .

SPV *(+'+ -+*/ +*)(/' .

O0 *;-+'/0 : '(0*'/0 /+ ..'(0:+( : +' :( 8)+ *0/+('/0 '+ +' '0

(+;8+ :(; '+ B0*+ ++' : '+ O(//0'(.

SPV + '+ +*)(/'/+ ' /08+'(.

T++ +*)(/'/+ (+ P '() *+('/:/*'+.

R+-;+0' (+*+/8+ 9 '+ (//0'( ..-+ 0 ' '+ SPV.

SPV 7( '()'.

R'/0 (+


51/55

LEGAL PROVISIONS TO BE AMENDED

STRONG SECONDARY MARKET TO BE SET UP.

%EALTH MANAGEMENT

M0/0 : 7+' 7/' 0 /0'+0'/0 : 7+' ;/;/'/0 0 0 0 /0 9/, 7/' -(-+(

:/00*/ -00/0.

T/ +(8/*+ / 9/* 07 (+


52/55

P('+*'/0 '+ +'.

%+' ;0+;+0' / (+*+0' *0*+-'.

S'()*')(+ /'+ -((;;+.

M(+ --)( /0 (+'/ +;+0' .

T+ *(+ : C;-+'+ /08+';+0'.

I0+-+0+0' /08+';+0' )'/0.

E* /0/8/). 0++ 0 9+*'/8+.

L0 '+(; /08+';+0' '('+.

I08+';+0' 8/( +(8/*+I08+' 90/0-(':/ ;0+(..%+'

;0+(..

NEED OF SUCH SERVICES

G(7' /0 H N % I.

D/8+(+ 9+' : -()*'.

C0*+-' : F/00*/ -00/0.

C)';/+ /08+';+0' )'/0.

I08+';+0' -(;+'+( +'+(;/0'/0.

P(-+( +' *'/0.

A+' ;0+;+0'.

E0)(+ '/;+ (+')(0.

P(-+( ' -00/0.

%HO ARE THESE PROFESSIONALS..

I0)'( +-+(/+0*++-)(+.

D;/0 07++.

H/ +(++ : +'/*.

A0'/* /.

I0+-+0+0' +*//0 ;/0 .

ACTION.

T/;+ -+0' 0 +/0 '+ */+0'@ (+


53/55

COMMODITY MARKET .

!!!!!!!!!!!!!!!!!!!!!

ADDITIONAL NOTES.

FOREIGN INVESTMENTS IN INDIA ..

A0 /08+';+0' :7/0 :(; 0+ *)0'( ' 0'+( / :(+/0 /08+';+0' .

I0/0 G8+(0;+0' */:/+ )0+(..

F(+/0 /(+*' /08+';+0'

F(+/0 /0'/')'/0 /08+';+0'

N0 (+/+0' I0/0

P+(0 : I0/0 (//0

%HY.

C(+'/0 : /'/0 +*0;/* *'/8/'

G+0+('/0 +;-;+0'F7 : '+*0

F(+/0 I08+';+0' /0 I0/ / 8+(0+ 9 '+ FDI -/* 00)0*+ 9 GOI /0 '+ -(8//0 :

FEMA 1""".

FDI/ /(+*' /08+';+0' ' '+ -+*/:/* +0'+(-(/+.

FIII08+';+0' /0 +*0( ;(+'.

FDI / ;(+ '9+ '0 FII..

FDI *0 +0'+( *+('/0 +*'( .7/' *+//0.

FII *0 9) 0 + ..*00' 8+ ;(+ '0 1# : '+ -/ )- *-/' : '+ *;-0.

U0+( FDI /08+';+0' *0 9+ ;+ 9 00 (+/+0' /0 (+ 0 *08+('/9+ +9+0')(+ : 0

I0/0 *;-0 )0+( '7 ()'+.

A)';'/* ()'+

G8+(0;+0' ()'+ .FIPB --(8 / (+


54/55

F(7( ;(+' *;;//0 *;;/' +*0+ (+)'( +0*)(+ +''/0 )- : C;;/'

+*0+.

MC=.M)'/ *;;/' +*0+ : I0/

NCDE=N'/0 *;;/' 0 +(/8'/8+ +*0+ '.

NMCEN'/0 ;)'/ *;;/' +*0+

TERMINOLOGIES PRIMARY MARKET

SECONDARY MARKET.

TRADING

YIELD

COST OF FUNDS

RETURN ON INVESTMENT

SECURITY

SECURITIES

SECURITISATION

DERIVATIVES.

IPOFPO

REDEEM

LISTING

$UOTATIONS.

FRENCH AUCTION

DUTCH AUCTION

A S B A

LOCK IN PERIOD

GREEN SHOE OPTION

UNDER%RITING

DEVOLVEMENT

DEPOSITORIES

D.P.

DEMAT


55/55

BASIS OF ALLOTMENT

MOU

DDC

INTERSE ALLOCATION

PREMIUM

OFFER PRICE.

PROMOTERS CONTRIBUTION

PROMOTERS HOLDING

LEASE RENTALS.

FINANCIAL LEASE

OPERATIONAL LEASE.

RTISTA

CUSTODIANS

NAV

RECORD DATE

BOOK CLOSURE

E= RIGHTSE= BONUS

CUM RIGHTS CUM BONUS

RENOUNCING THE RIGHTS.DELISTING

PRIMARY PERIOD

SECONDARY PERIOD

RESIDUAL VALUE

E=IT ROUTE

!!!!!!!!!!!!!!!!

Financial Markets and Instruments

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Transcript of Financial Markets and Instruments