Investment banking

1. Presentation By:-
Pawan Singh Raikhola

2. Investment Banks

3.  The history of investment banking in India traces
back to when European merchant banks first
established trading houses in the region in the 19th
century. Since then, foreign banks (non-Indian) have
dominated investment and merchant banking
activities in the country.
 In the 1970’s, the State bank of India entered the
business by creating the Bureau of Merchant
Banking and ICICI Securities became the first Indian
financial institution to offer merchant banking
services.
 By 1980, the number of merchant banks had risen to
more than 30. This growth in the financial services
industry included rapid expansion of commercial
banks and other financial institutions.

5. • Axis Bank Ltd.
• Barclays Bank PLC
• BNP Paribas
• Central Bank of India
• Credit Suisse Securities (India) Private Ltd.
• Deutsche Equities India Private Ltd.
• Edelweiss Financial Services Ltd.
• HDFC Bank Ltd.
• HSBC Securities & Capital Markets (India) Private
Ltd.
• ICICI Securities Ltd.

8.  According to the Association of Investment
Bankers of India (AIBI), the merchant banking
industry started to take off in the 1990’s with over
1,500 merchant bankers registering with the
Securities and Exchange Board of India (SEBI).
 To regulate and govern the new wave of banks that
opened up, the Association of Investment Bankers
of India (AIBI) was created to ensure members
were in compliance with banking regulations and
that their activities were kept in check.

9. • Global transaction banking is the division
which provides cash management, custody
services, lending, and securities brokerage
services to institutions.
• Investment management is the professional
management of various securities and other
assets to meet specified investment goals for
the benefit of investors. Investors may be
institutions or private investors . The
investment management division of an
investment bank is generally divided into
separate groups, often known as private wealth

10.  Merchant banking can be called "very
personal banking"; merchant banks offer
capital in exchange for share ownership rather
than loans, and offer advice on management
and strategy. Merchant banking is also a name
used to describe the private equity side of a
firm. Current examples include Defoe Fournier
& Cie. and JPMorgan Chase's One Equity
Partners. The
original Rothschilds, Barings and Warburgs we
re all merchant banks. Originally, "merchant
bank" was the British English term for an

12. • Underwriting – Capital raising and
underwriting groups work between investors
and companies that want to raise money or go
public via the IPO process. This function serves
the primary market or “new capital”.
• Mergers & Acquisitions (M&A) – Advisory
roles for both buyers and sellers of businesses,
managing the M&A process start to finish.

13. • Sales & Trading – Matching up buyers and
sellers of securities in the secondary
market. Sales and trading groups in
investment banking act as agents for clients
and also can trade the firm’s own capital.
• Equity Research – The equity research
group research or “coverage” of securities
helps investors make investment decisions and
supports trading of stocks.
• Asset Management – Managing investments
for a wide range of investors
including institutions and individuals, across a
wide range of investment styles.

14.  Investment banking is split into front
office, middle office, and back office activities.
While large service investment banks offer all
lines of business, both "sell side" and "buy side",
smaller sell-side investment firms such
as boutique investment banks and small broker-
dealers focus on investment banking and
sales/trading/research, respectively.
 Investment banks offer services to both
corporations issuing securities and investors
buying securities. For corporations, investment
bankers offer information on when and how to
place their securities on the open market, an
activity very important to an investment bank's

15.  Front office is generally described as a revenue
generating role. There are two main areas
within front office: investment banking and
markets.
• Investment banking involves advising
organizations on mergers and acquisitions, as
well as a wide array of capital raising
strategies.
• Markets is divided into "sales and trading"
(including "structuring"), and "research".

16.  This area of the bank includes treasury
management, internal controls, and internal
corporate strategy.
 Corporate treasury is responsible for an
investment bank's funding, capital structure
management, and monitoring.
 Internal control tracks and analyzes the capital
flows of the firm, the finance division is the
principal adviser to senior management on
essential areas such as controlling the firm's global
risk exposure and the profitability and structure of
the firm's various businesses via dedicated trading
desk product control teams. In the United States
and United Kingdom, a comptroller (or financial

17.  The back office data-checks trades that have
been conducted, ensuring that they are not
wrong, and transacts the required transfers.
Many banks have outsourced operations. It is,
however, a critical part of the bank.

18.  Investment bankers advise a wide range of clients
on their capital raising and M&A needs. These
clients can be located around the world.
 Investment banks’ clients include:
• Governments – Investment banks work with
governments to raise money, trade securities, and
buy or sell crown corporations.
• Corporations – Bankers work with private and
public companies / operating businesses (known
as “corporations” or “corporates”) to help them go
public (IPO), raise additional capital, grow their
business, make acquisitions, sell business units,
and provide research for them and general
corporate finance advice.
• Institutions – Banks work with institutional

19.  The investment banking industry, and many
individual investment banks, have come under
criticism for a variety of reasons, including
perceived conflicts of interest, overly large pay
packages, cartel-like or oligopoly behavior,
taking both sides in transactions, and
more.Investment banking has also been
criticized for its opacity.[

20. THANK YOU