Vous êtes sur la page 1sur 7

c

c
PROJECT PROPOSAL
c

(SUMMER INTERNSHIP)

cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc c

c c
c

 c c

c c c

 ccc c

c c  ! "#$ % &$c

c c'(c()()*+ ,c


Project Proposed: Advising Investment Strategies and Private Equity Funding

Project Description: The project mainly covers the following aspects:

Öc · rious fin nci  products  i e in the m rket.


This segment describes how many investable instruments exist today which would promote
investments. It depends on the investors¶ pockets as well as the market conditions that which
financial product would be best suited for him. This is basically an introduction of the project.

Any financial service provider is required to cater to a cross section of investors. IFCI financial
services ltd. remains committed to being the bridge between large financial service providers and a
multitude of resident and non-resident Indian investors.

Distribution of Financial Products carried by IFIN

IPO IFIN is credited to be associated with IPO management but many companies
are not exploited by us, which is a great opportunity. We recommend selective
investment to our clients & sub-broker.
Debt Instruments A broad spectrum of fixed income debt instrument is marketed to suit every
class of investors.
Mutual Funds The need of the hour is to protect your capital & invest wisely, based on your
ability to absorb risks associated with the vagaries of the capital market. Mutual
funds offering various schemes suitable to every class of investor are made
available.
True & transparent advice is available to investors to narrow down his options.
Fixed Deposits We market fixed deposits of various reputed companies offering a wide array
of maturity space.
Companies with excellent track records are highlighted for such corporate FDs.
Tax Savings PPF offering highest safety, attractive returns & tax benefits, relief bonds,
Bonds floated for sec.88, infra bonds for sec. 80CCF, also for capital gain
investment products are made available.
ICDs Intra Corporate Deposits are also arranged on our credibility.
Insurance We market various insurance products for safe & secured future.

Öc Det m rket of Indi .


This segment would deal with the current scenario of debt markets in India. Different options
of long term investments in fixed income markets, either domestic or foreign, would be dealt
here. Under this segment the following topics will be researched upon by me,
j. Bond Features
2. Fixed Income Market structure
3. Pricing and Yield Measurement of a Bond
4. Risk Management
5. Yield Curve Analysis
6. Settlement in Fixed Income Markets
7. Bond analytics
a. Yield curve of various years
b. Bond value calculator
c. Yield analysis
d. Duration, Price Value Basis Points (PVBP) and Convexity

Öc Inestment modes.
This step will include a systematic investment plan and models like wealth creator, wealth
enhancer and wealth preserver. Also it will support the flow of jst and 2nd segment of the
project talking about how to invest in the mutual funds, term loans, bonds, fixed deposits and
life insurance by analysing the model portfolio performance.

Öc Pri te Equity funding


This segment gives a new dimension to investment as it deals with the funding of such
projects which have a lot of potential but are lacking of resources. Most private equity
funding is used to fund start-up or early-stage companies or to bring large public companies
private. Private equity investments can be made through limited partnerships or they can be
direct investments.

Private equity financing is an alternative to raising public equity, issuing public debt, or arranging a
private placement of debt or bank loan. The reasons companies seek private equity financing are
varied. For example, other forms of financing may be unavailable or too expensive because the
company's track record is either nonexistent or poor (that is, the company is in financial distress). Or a
private company may want to expand or change its ownership but not go public. Or a firm may not
want to take on the fixed cost of debt financing.

Public firms may seek private equity financing when their capital needs are very limited and do not
warrant the expense, time, and regulatory paperwork required for a public issue. They also may seek
private equity to keep a planned acquisition confidential or to avoid other public disclosures. They
may use the private equity market because the public market for new issues in general is bad or
because the public equity market is temporarily unimpressed with their industry's prospects. Finally,
very often in recent years, managements of large public firms have felt their firms will benefit from a
change in capital structure and ownership and will choose to go private by means of a leveraged
buyout (LBO).

Êoes in the project:

The ability of the banker to understand the thinking of a corporate client is key to his or her success.

Achieing Str tegic Ojecties


Öc Investment bankers find the objectives the company is strategically focusing on. The banker
also needs to provide an outside view of what competitor companies are doing and what, if
any, strategic complications this provides. Bankers must provide solutions for achieving
objectives and have the financial strength to lead bond and stock offerings on behalf of the
company.
Due Diigence
Öc If a company has made a bid for another company an outside third party such as the
investment banker will need to supply an opinion regarding the careful study and decision
making that went into acquiring the company. This is called a due diligence report. The due
diligence report is a necessary document and requires that the investment banker ask probing
questions and ascertain that the company did everything in its power to uncover problems that
might arise later.
] irness Opinions
Öc Another document necessary for the purchase of one company by another is the fairness
opinion. The fairness opinion is written by the investment banker and provides detailed
determinations, often using several investment metrics, to demonstrate that the company did
not overpay for the acquired company. Fairness opinions allow management to show that
substantial effort was used to get the best price possible for investors. An investment banker
may be sued by shareholders if it is later learned that his opinion was incorrect.
÷ n ging Det Offerings
Öc Investment bankers suggest ways to finance or refinance financial obligations. In a period of
low interest rates a banker may demonstrate cost savings by redeeming outstanding debt at
higher interest rates and substituting a new, lower interest cost issue. The banker earns fees
for the underwriting while guiding the company's efforts to choose the proper size and
maturity of the offering as well as handling negotiations with the debt rating agencies.
÷erch nt B nking

Öc The term merchant banking is generally understood to mean negotiated private equity
investment by financial institutions in the unregistered securities of either privately or
publicly held companies. Both investment banks and commercial banks engage in merchant
banking, and the type of security in which they most commonly invest is common stock. They
also invest in securities with an equity participation feature; these may be convertible
preferred stock or subordinated debt with conversion privileges or warrants. Other investment
bank services-raising capital from outside sources, advising on mergers and acquisitions, and
providing bridge loans while bond financing is being raised in a leveraged buyout (LBO)-are
also typically offered by financial institutions engaged in merchant banking.

Since I am working on a live project, each and every step would be implemented at every level.
The investment models will be incorporated in the firm and investments would be done and
advised in the same patterns to the HNIs and PCGs. The private equity assessment would also be
done and every query would be subjected to the CAs of the company requiring capital.
Ojectie:

Öc The main intention of this project is to know all the investable instruments and design a
strategy for investors using the best suited instruments for them.
Öc Analysis of financial products, their synergy with the new clauses and impact on investments.
Apart from capital gains, how one can save taxes and get additional benefits out of
investments.
Öc The most important aim is to analyse and valuate a firm which requires financial aid and
suggest the company to take up the mandate and work upon arrangements of private equity
for them. This whole process would be covered in this project report and the objective would
be to add value to the company by bringing revenue in the form of investment banker fee.

The fulfilment of these objectives will give me a practical know how of the industry as well as add to
my portfolio a business worth few crores to the company.

÷ethodoogy:

]or inestment str tegy:

´c Model portfolio ±Absolute returns of the model portfolios are calculated based on the
performance of each schemes & asset allocation (or weight-ages) of the schemes.

´c Customized Benchmark - Absolute returns of following Benchmarks taken into consideration


for customization. (BSE 500, CRISIL Liquid, CRISIL MIP Blended Index & Gold Bullion
Prices)

´c The total returns of the customized benchmark arrived on the basis of performance of each
benchmark indices by giving the same weight-ages according to the portfolio allocation

For example,

´c Wealth Creator portfolio (Equity 90 : Debt j0

´c Wealth Enhancer portfolio (Equity 50 : Debt 50)

´c Wealth Preserver portfolio (Equity j5 : Debt 85)

]or pri te equity:

Öc To sort out the proposal by seeing the capital structure of various companies requiring
funding.
Öc Select a company which best suits the requirements of private equity funding and take its
mandate.
Öc Evaluate the project by scrutinising the financials and projecting the future cash flows.
Öc Industry analysis to predict the future growth of the company.
Öc Preparations of Information Memorandum for the private equity firms and float it among
them.
Öc Deal origination, since we as merchant bankers have been sourced for this work.
Öc Due diligence assistance
Öc Deal negotiation between the client and the private equity fund.
Öc Deal closing by sourcing finance for the client through PE funding.

The data collection in both the cases is majorly primary data since:

Öc It is collected from the HNIs to design an investment strategy which fulfils their demands
Öc In other case, the data source is the client company which requires funding and it gives all the
reports of the firm as asked by our company. Since we represent that firm it is essential for us
to collect the information directly from them and maintain transparency.

Industry analysis and trends require secondary data.

„imit tions:

Öc Market risks- Investments in equity are subjected to market risks. In that case the strategies
designed might have some risk factor associated.
Öc Time Constraint- Private Equity investments require a lot of time to execute and it is not
necessary that the firm at once agrees to fund a project. Thus it is not necessary that all the
phases of methodology would be completed till the tenure of SIP.
Öc Industry Existence- The project depends on industry analysis and the non existence of the
industry would be a limitation to the forecasted figures.
Öc Government Regulations- Implementation of new Acts or Laws may affect the investments in
adverse or positive way.

Schedue:

Investable instruments - j week

Model development - 2 weeks

Strategy for next month/quarter - 3 weeks

Valuation of projects - 2 week

Working towards the deal closing - 8 weeks or more.


Êeferences:

´ www.investopedia.com

´ www.babypips.com

´ www.scribd.com

´ www.yieldcurve.com

´ www.wikipedia.com

] cuty Guide N me: Prof. PVLN Prasad

Comp ny Guide N me: Mr. Santanu Ray

j8th March, 20jj (Sh chish J in)

Vous aimerez peut-être aussi