NAGINDAS KHANDWALA COLLEGE OF COMMERCE,

ARTS & MANAGEMENT STUDIES MALAD (WEST),

MUMBAI 400064
PROJECT REPORT ON:INVESTMENT BANKING IN INDIA
SUBMITTED BY:SHIVANI ASHOK DHRUV
ROLL NO. 514
T.Y.BMS
SEMESTER V
PROJECT GUIDE:PROF.
SUBMITTED TO:UNIVERSITY OF MUMBAI
ACADEMIC YEAR
2016-17

Declaration
I, MISS. SHIVANI ASHOK DHRUV student of T.Y.B.M.S (A)
Semester

Vth, Nagindas Khandwala College of Commerce &

Economics, Hereby declare that I have completed this project on

"INVESTMENT BANKING IN INDIA" in the academic year 20162017. The information submitted is true and original to the best of
my knowledge.

Signature of the Student

(SHIVANI DHRUV.)

ACKNOWLEDGEMENT

This goes to all who have knowingly or unknowingly been a great

support for me to accomplish this piece of work.
Entrance, hard work, gradual progress and an exciting year, that is
how I have reached this level and now as I stand at the threshold of the aside
world, I take a look of the past year which I have spent in this college, our
performance with the devotion of the profession and all the fun I had was like a
beautiful dream come true.
First of all I would like to take this opportunity to thank the Mumbai
University for having projects as a part of the Banking and Insurance curriculum.
Many people have influenced the shape and content of this project,
and many supported me through it. Secondly, I would like to thank my College
Principal DR. ANCY JOES for supporting in everything and then our Coordinator,
Prof .G.H.RAO for encouraging me in everything I did and for supporting me. I

express my sincere gratitude for being my Project Guide and for assigning me a
project on Investment banking which is an interesting and exhaustive subject.
He has been an inspiration and role model for this topic. His guidance and active
support has made it possible to complete the assignment.
I also would like to thank my parents and friends who have helped
and encouraged me throughout the working of the project. I would also like to
thanks the customers who have helped in making my survey successful.

Executive Summary

Investment Banking is a specific division of banking related to the creation of

capital for other companies; governments and other entities. Investment banks
underwrite new debt and equity securities for all types of corporations, aid in the
sale of securities, and help to facilitate mergers and acquisitions, reorganizations
and broker trades for both institutions and private investors. Investment banks also
provide guidance to issuers regarding the issue and placement of stock.
India has made tremendous progress in building a policy environment to encourage
investment. As a result, the countrys economy is growing more rapidly and FDI
inflows have accelerated impressively. However, investment remains insufficient to
meet Indias needs, particularly in infrastructure. Current efforts to strengthen and
liberalise the regulatory framework for investment need to be intensified and
Indias well-developed economic legislation implemented at an accelerated pace
both at national level and right across Indias states and union territories. India has
made tremendous progress in promoting investment and has made impressive
strides in building a policy environment to encourage both domestic and foreign
investment, in particular to attract foreign direct investment (FDI) and facilitate
outward investment, as evidenced in this study. This progress is an integral part of
the market-oriented reforms which have since 1991 set the scene for a shift to a
consistently higher rate of real annual GDP growth than the country has
experienced in its recent history. Many sectors formerly reserved to the public
sector have been opened up to private enterprise. Sectoral restrictions on FDI have
been progressively removed and foreign ownership ceilings steadily raised.
Foreign exchange restrictions related to investment have been relaxed.

Experimental economic zones such as the Special Economic Zones have been
established to test investment liberalization measures. More investment can
promote employment growth and so help raise the incomes of Indias poorest
families.

SR.NO.
1.

CONTENTS
Introduction

2.

Research Methodology

3.

What is investment banking

Skills suggested for investment bankers

4.
5.
6.
7.
8.

Role of investors in developing a economy

Major Functions of the investment banks
Scope of Investment banks
Investment bank organizational structure
Role of front, middle and back office in
investment banking

9.
10.
11.
12.
13.
14.
15
16
17
18
19

Top ten Investment Banks

Financial crises of 2007-2008
Criticisms
Evolution of investment banking
Financial and strategic investors
Services offered by investment banks
Investment banking & Corporate banking services
Analysis
Conclusion
Annexure
Bibliography

PAGE NO.

INTRODUCTION
From the beginning of 20th century banking has been so developed that in fact, has
come to be called LIFE BLOOD of trade and commerce. With the dawn of
independence, changes of vast magnitude have taken place in India. After
independence India launched a process of planned economic activity in order to
overcome the multitude of problems it faced as an underdeveloped nation. The

increasing tempos of economic activity lead to tremendous increase in the volume

and complexity of banking activity. SBI was the first Indian public sector bank to
set up its investment banking division in 1972. SBI caps and IDBI caps are two
prime examples of investment banks in India today. Currently there are 300
investment banks registered with SEBI. An investment bank is typically a private
company that provides various financial-related and other services to individuals,
corporations, and governments such as raising financial capital by underwriting or
acting

as

the

client's

agent

in

the

issuance

of

securities.

Investment banking is among the most complex financial mechanisms in the

world. They serve many different purposes and business entities. They provide
various types of financial services, such as proprietary trading or trading securities
for their own accounts, mergers and acquisitions advisory which involves helping
organizations in M&As ; leveraged finance that involves lending money to firms to
purchase assets and settle acquisitions, restructuring that involves improving
structures of companies to make a business more efficient and help it make
maximum profit, and new issues or IPOs, where these banks help new firms go
public. Investment banks employ investment bankers who help corporations,
governments and other groups plan and manage large projects, saving their client
time and money by identifying risks associated with the project before the client
moves forward. In theory, investment bankers are experts in their field who have
their finger on the pulse of the current investing climate, so businesses and
institutions turn to investment banks for advice on how best to plan their
development, as investment bankers can tailor their recommendations to the
present state of economic affairs.
Essentially, investment banks serve as middlemen between a company and
investors when the company wants to issue stock or bonds. The investment bank
assists with pricing financial instruments so as to maximize revenue and with

navigating regulatory requirements. Often, when a company holds its initial public
offering (IPO), an investment

bank will

buy

all or much of that

companys shares directly from the company.

Investment banks will often compete with one another for securing IPO projects,
which can force them to increase the price they are willing to pay to secure the deal
with the company that is going public. If competition is particularly fierce, this
lead to a substantial blow to the investment banks bottom line. Most often,
however, there will be more than one investment bank underwriting securities.