Investment banking

Investment Banking
INTRODUCTION
‘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
1

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.
2

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.
3

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.
4

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.
5

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.
6

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~
7

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.
8

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
9

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
10

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.
11

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.
12

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
13

Investment Banking
segments of secondary market. In addition several other investment banks
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.
14

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
15

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.
16

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.
17

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.
18

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
19

Investment Banking
other investment banks which can do so upto 20 times their net owned
fund.
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.
20

Investment Banking
 The business of asset management as mutual funds is regulated under
the SEBI (Mutual Fund) Regulations, 1996.
 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.
21

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
22

Investment Banking
products that would suit their risk profile should be identified. The
clients will also feel at home while dealing with a product specialist.
 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
23

Investment Banking
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.
 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.
24

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,
25

Investment Banking
clients & team members. It is essential when solutions are to be
identified for complex problem. Innovations & creativity are required
structure deals.
 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;
26

Investment Banking
• Highest standards of professionalism.
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 activity
Production of
goods and
services (real
economy)
Investors
(generate
savings)
27

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
28

Investment Banking
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.
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)
29

Investment Banking
.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 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
30

Investment Banking
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
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.
31

Investment Banking
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
32

Investment Banking
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
33

Investment Banking
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.
34

Investment Banking
⇒ Free news and market updates.
⇒ Exposure of upto 15 times your initial margin on select stocks
with Super Multiple.
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 gateway@kotaksecurities.com. 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.
35

Investment Banking
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.
36

Investment Banking
with Super Multiple
How to activate?
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.
37

Investment Banking
Kotak Privilege Circle Account
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.
38

Investment Banking
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:
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.
39

Investment Banking
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:
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?
40

Investment Banking
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
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.
41

Investment Banking
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
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
42

Investment Banking
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
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.
43

Investment Banking
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:
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.
44

Investment Banking
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:
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.
45

Investment Banking
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
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,
46

Investment Banking
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.
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 please
Specify?
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
47
YES NO

Investment Banking
5) Which facility of Kotak Securities do you appreciate the most?
Easy Equity Easy
Derivatives Easy IPO
Easy Mutual Fund Easy
Insurance
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?
48

Investment Banking
MARKET SURVEY RESULT FOR KOTAK SECURITIES.
1) Are you familiar with Kotak Securities?
Kotak Securities
90%
10%
Yes (%)
No (%)
2) Do you have an account with Kotak Securities? If No, Than please
Specify?
Total No of Person Kotak (%) HDFC (%) ICICI (%) Others (%)
40 40 25 20 15
Total No of Person Yes (%) No (%)
50 90 10
49

Investment Banking
Kotak (%)
40%
HDFC (%)
25%
ICICI (%)
20%
Others (%)
15%
Kotak (%)
HDFC (%)
ICICI (%)
Others (%)
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
50

Investment Banking
5) Which facility of Kotak Securities do you appreciate the most?
Easy
Equity
34%
Easy IPO
13%
Easy
Derivative
s
33%
Easy
Mutual
Fund
13%
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)
40 31 27 17 13 12
1 (%)
44%
2 (%)
23%
3 (%)
15%
4 (%)
11%
5 (%)
7%
1 (%)
2 (%)
3 (%)
4 (%)
5 (%)
Total No
of Person
Easy
Equity
(%)
Easy
IPO
(%)
Easy
Derivatives
(%)
Easy
Mutual
Fund (%)
Easy
Insurance
(%)
40 34 13 33 13 7
51

Investment Banking
1 (%)
31%
2 (%)
27%
3 (%)
17%
4 (%)
13%
5 (%)
12%
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? (1– Good, 5–
Worst)
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
52

Investment Banking
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.
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.
53

Investment Banking
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
54

Investment Banking
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.
BIBLIOGRAPHY.
Source:
Investment Banking-An Odyssey in High Finance
-Pratap Subramanyam.
Managing Investment Banks An Introduction
-ICFAI
Managing Investment Banks Advance Topic
-ICFAI
WIBLIOGRAPHY.
Source:
www. kotaksecurities.com
www.google.com
55

Investment banking

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to Investment banking

Similar to Investment banking (20)

More from Dharmik

More from Dharmik (20)

Recently uploaded

Recently uploaded (20)

Investment banking