IB Presentation Abridged
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December 2010
Investment Banking - Opportunities for
Chartered Accountants
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Programme Agenda
Session 1 Role of Investment Banking in Business Finance
Session 2 Investment Banking Boom
Session 3 Functional Scope of Investment Banking
Session 4 Professional Skill-set for Investment Banking
Session 5 Opportunities for CAs in Investment Banking
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Session 2
Investment Banking inBusiness Finance
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CA Raghunath AFounder & MD, akasam consulting private limited
Has over 18 years of experience in investment banking
Key focus areas are Private Equity syndication, M&A Advisory and
Capital Markets Advisory
Distinguished guest faculty at several eminent institutions like JNIDB ,
IPE and other industry forums
He is a fellow member of the Institute of Chartered Accountants of
India and an associate member of the Institute of Cost & Works
Accountants of India
A tennis enthusiast , a person with never say NO attitude and strong
will power
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Business Life Cycle
Business Roadmap
Inception
Stabilisation
Market
Acceptance
Growth
Consolidation
Market
Dominance
Decline/ Repositioning
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Globalization Impact on Business
PositivesAccess to
International
Markets
MarketEconomy
Faith on Private
Capital
Movement of
Capital
NegativesEconomic
Interdependency
Global Conflicts,
trade disputes &culture disputes
Sharing business
to empower own
economies
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Finance as Integral Business Input
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Business Finance
Business
Finance
Strategic
Debt EquityMix
WealthOptimisation
Operational
RaisingEquity
Raising Debt
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Scope of Business Finance
Estimating Fund Requirement
Selection of Source of Finance
Capital Rationing Decisions
Determining the Capital Structure
Cash Management
Surplus Allocation and Management
Financial Control
Business Finance
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Business Finance Professional Skill set
Strong analytical and mathematical skills
To have project and time management skills
Knowledge on various capital structures, to suggest
suitable capital structure
Good inter personal skills
Communication and networking skills
Maintaining relationships with investment community
Up-to-date knowledge on various sectors
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Role of Investment Banker
Estimating Fund Requirement
Selection of Source of Finance
Capital Rationing Decisions
Determining Capital Structure
Cash Management
Surplus Allocation and
Management
Financial Control
In the context of each of these functions
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Session - 4
Investment Banking Functional Scope
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CA Harsha Vardhan MAssociate - Debt, akasam consulting private limited
Has 4 years of experience in corporate finance advisory services
Handles debt syndication and has worked on a number of funding
transactions for businesses in diverse sectors.
His areas of focus include telecom, infrastructure and manufacturing
sectors.
Is an Associate Member of the Institute of Chartered Accountants of
India and also an Associate Member of the Institute of Cost & Works
Accountants of India
A movie buff and enthused about analyzing stock markets
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Praveen MAssociate - Equity, akasam consulting private limited
Has 4 years of experience in the financial services industry with special
focus on Equity Syndication and Equity Research.
Has handled several large and complex engagements in Private Equity
Syndication
A Graduate in Commerce and a budding Chartered Accountant
When not responding to mails, selling ideas and working deals,
Praveen goes out on adventure trips and loves listening to music
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Core Investment Banking Functions
Core IB Functions
Traditional IB Activities
Raising Capital
Ancillary Activities
Corporate Advisory
Debt
Equity
Sales & Trading
Others
Research
M&A Advisory
Restructuring
Advisory
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Raising Capital
Capital Market
Investment bankers are the intermediaries between users of capital
and providers of capital. Capital can be
Debt
Private EquityBanks & FIs
Equity
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Raising Capital - Debt
Funding Types
Project Finance
Working Capital
Acquisition
Restructure
Debt
Is an amount owed to a
person/organization for funds
borrowed.
Fund Based
Term Loan
Working Capital
Non-Fund Based
Letter of Credit
Bank Guarantee
How?
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i i i l i l k
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Raising Capital Capital Markets
Debt
Issue of Debentures
Issue of Corporate Bonds
Issue of Money Market Bonds
Issue of Government Bonds
Fund Raising in Capital Markets
Equity
Initial Public Offering (IPO)
Follow on Public Offering (FPO)
Private Placements
Preferential Allotments
Rights Issue
Hybrid
Convertible Preference Shares
Convertible Debentures
Convertible Bonds
Fund raising in capital markets can be through any of the above modes
Issue of each of the instruments require separate and elaborate procedure to be followed
Investment Banker has the requisite skill set and infrastructure to mobilize and complete the
transactions
R i i C i l P i E i
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Raising Capital Private Equity
What is PE
Private Equity consists of investors and funds that
make investments directly into private companies.
Contribution of capital towards equity
Characteristics of Private Equity:
Unsecured in nature
Dilution of promoters stake
Incisive evaluation of company
Management participation
Higher cost of capital
R i i C it l P i t E it
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Raising Capital Private Equity
Why PE?
How
Growth catalysts
Facilitating organizationalevolution
Strategic inputs/market
intelligence
Helping build process
/systems to ensure longevity
and robustness
Improving Corporate
governance
Adding to the organizational
financial acumen.
Funding Types
Angel Funding
Early Stage Funding
Growth Equity
Late Stage Funding PIPE Deals
Buyout Equity
P i t E it T ti Fl
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Private Equity - Transaction Flow
Business Mapping
Strategy Formulation &Crystallizing Requirement
Identification of PE Funds
Sharing of Information
Deal Negotiation & Term
sheet finalization
Due Diligence
Deal Structuring andDocumentation
P i t E it E l ti F k
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Private Equity - Evaluation Framework
Industry & Space
Promoter & Management
Team
5
4 3
2
16
Companys positioning,
strategy & differentiation
Competitive Landscape
Business Model
Exit Route
Corporate Advisory
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Corporate Advisory
Corporate Advisory Services to assist management in decision
making
M&A Advisory
Identification of opportunities
and counterparties, both
strategic and financial.
Seek to eliminate a competitor
Increase efficiency
Diversify its products, services
and geographical market
Reduce tax effect
Market Dominance
Restructuring Advisory
Advising and Implementing
Solutions for recovery and
repositioning of a corporate.
Change of ownership or
ownership structure
Merger / Demerger
Response to a crisis or majorchange in the business Debt
restructuring.
Rationale
Meaning
M&A Advisory Transaction Flow
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M&A Advisory Transaction Flow
Identification of Target
Solicitation of Target
Quantification of Synergies
Determination of Value
Due Diligence
Deal Structuring
Co ordination
Documentation
Integration Planning
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Session 4
Professional Skill-set forInvestment Banking
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Vijay Grover
Associate - Equity, akasam consulting private limited
Has over 2 years of experience in corporate finance advisory services
Handles client advisory on issues of business strategy, private equity
and providing commercial due diligence support to investors assessing
opportunities.
Prior to akasam, he was a manager in ING Vysya Bank for 3 years
A Post Graduate in Commerce from Osmania University, a silver
medalist Management Graduate in Finance from the ICFAI Business
School and also a Certified Associate from the Indian Institute of
Banking and Finance
In his spare time, he likes reading, tracking the stock markets and
partying hard
Keys to Success as an IB Associate
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Keys to Success as an IB Associate
Develop credibility early with team
Effective Leadership and authority delegation.
Time management & multiple tasking skills
Understand, summarize and communicate
transaction (both up and down)
Develop a rapport with the analysts and
communicate the big picture
Manage expectations and define
responsibilities
Get your hands dirty
Dont be afraid to ask questions
Proactive client interaction
Educate the team and exceed expectations
Presenting materials with mistakes or typos
Waiting to get involved
Failure to anticipate
Not leveraging firms resources appropriately
Getting lost in the detail and missing the big
picture
Insubstantial interaction with clients Does not properly delegate work
Losing confidence under pressure
Lack of attention to detail
Lack of follow through
Lack of involvement in recruiting and training
activities
Goals Pit falls
Skill-set of Investment Banker
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Skill-set of Investment Banker
Strong analytical and mathematical skills
Good knowledge of the business world and latest market developments
Ability to keep calm and work under pressure
Attention to detail
Project and time management skills
IT competency
Good inter-personal skills
Tolerance for taking risks
Ability to work in a team environment
Ability to demonstrate effective leadership
Ability to take initiative, good networking skills
Good oral and written communications skills
Adapt to different situations and cultures of different countries.
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Session 5
Opportunities for CAs inInvestment Banking
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CA Raghunath A
Founder & MD, akasam consulting private limited
Has over 18 years of experience in investment banking
Key focus areas are Private Equity syndication, M&A Advisory and
Capital Markets Advisory
Distinguished guest faculty at several eminent institutions like JNIDB ,
IPE and other industry forums
He is a fellow member of the Institute of Chartered Accountants of
India and an associate member of the Institute of Cost & Works
Accountants of India
A tennis enthusiast , a person with never say NO attitude and strong
will power
Professional Skill-set of CA
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Professional Skill set of CA
Accounting
Taxation
Costing
ManagementAccounting
Auditing
Business Laws
Traits of CA as Result of Academics
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Traits of CA as Result of Academics
Conceptual Approach
Ability of Analysis of Financial Statements
Commitment & Hardwork
Ability to Inter Relate
Working under Pressure
Due Diligence Skill
Risk Assessment Skill
Finance Professionals in Investment Banking
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Finance Professionals in Investment Banking
InvestmentBanking
CAs
MBAs
Others
CFAs
Skills to Back up
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p
Ability to Communicate
Ability to take Initiative
Ability to Communicate
Ability to Understand Business
Willingness to Travel
Investment Banking Space
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g p
IB World
InvestmentBanks
TopLeague MidMarket SmallBoutique
InvestmentFunds
PE Funds
HedgeFunds
ProprietaryFunds
BuyoutFunds VC/AngelFunds ProprietaryFundsMutual/Pension
Funds
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Thank You