Merchant Banking

Lovely Professional University, Punjab

Course Code Course Title Course Planner Lectures Tutorials Practicals Credits

FIN633 MERCHANT BANKING 12512::Anoop Mohanty 3.0 1.0 0.0 4.0

Course Category Courses with conceptual focus

TextBooks

Sr No Title Author Edition Year Publisher Name

T-1 Merchant Banking Machiraju, H.R. 1st 2012 New Age international Ltd.

Reference Books

Sr No Title Author Edition Year Publisher Name

R-1 Merchant Banking And Financial Service

S Gurusamy 3rd 2009 Tata McGraw Hill India

R-2 Merchant Banking And Financial Services

Madhu Vij, Swati Dhawan 1st 2011 Tata McGraw Hill India

R-3 Merchant Banking And Financial Services

S Gurusamy 4th 2013 Tata McGraw Hill India

Other Reading

Sr No Journals articles as Compulsary reading (specific articles, complete reference)

OR-1 Banking Sector report 2012-13 (available at http://www.ibef.org/industry/banking-india.aspx) ,

OR-2 SEBI (Merchant Bankers) (Amendment) Regulations, 2007 ( Available in http://www.sebi.gov.in/cms/sebi_data/commondocs/bm_p.pdf) ,

OR-3 SEBI's Review of Regulatory Compliance and Periodic Reporting ( Available at http://www.sebi.gov.in/cms/sebi_data/attachdocs/1336988686538.pdf) ,

Relevant Websites

Sr No (Web address) (only if relevant to the course) Salient Features

RW-1 http://www.rbi.org.in/home.aspx Reserve Bank of India

RW-2 http://www.banknetindia.com/banking/banking.htm Provides information on Banking basics, Commercial Banks, cooperative banks, banking products, articles & banking news

RW-3 www.sebi.gov.in Securities and Exchange Board of India

RW-4 http://en.wikipedia.org/wiki/Merchant_bank Introduction to Merchant Banking

RW-5 http://www.indbankonline.com/ Indian Bank - Merchant banking subsidiary link

RW-6 http://www.canarabank.com/english/scripts/CBMerchantBankingServices.aspx Canara Bank Merchant Banking Division

RW-7 http://www.sebi.gov.in/sebiweb/home/HomeAction.do?doListDept=yes&deptId=18 SEBI link for Merchant Banking

RW-8 http://en.wikipedia.org/wiki/Credit_rating Detail on Credit Rating

RW-9 http://indiavca.org/venture-capital-in-india.html Venture capital guidelines

Week Number

Lecture Number

Broad Topic(Sub Topic) Chapters/Sections of Text/reference books

Other Readings,Relevant Websites, Audio Visual Aids, software and Virtual Labs

Lecture Description Learning Outcomes Pedagogical ToolDemonstration/ Case Study / Images / animation / ppt etc. Planned

Week 1 Lecture 1 Introduction to Merchant Banking(Nature and scope of Merchant Banking)

T-1:Chapter 2R-1:Chapter 1R-2:Chapter 1R-3:Chapter 1

OR-1RW-1RW-3RW-5RW-6

Lecture 1: Origin of Merchant Banking and Investment Banking

Student will be learn about the concept of Merchant Banking

Case Discussion: Commercial Banking versus Investment Banking

Lecture 2 Introduction to Merchant Banking(Regulation of Merchant Banking Activity)


OR-2OR-3RW-7

Lecture 2: Regulation for Merchant Banking

Student will be learn about Capital adequacy norms in Merchant Banking

Case Analysis of Public Sector Banks

Lecture 3 Introduction to Merchant Banking(Project Preparation and Appraisal)

T-1:Chapter 3 RW-4RW-5

Lecture 3: Project Selection process.Lecture 4: Financial Analysis - Non discounting techniques (PBP, ARoR method)Lecture 5: Financial Analysis- Discounting techniques (IRR, NPV, Profitability Index)

Student will be learn about the project appraisal techniques involved in feasibility study

Lecture cum brainstorming

Week 2 Lecture 4 Introduction to Merchant Banking(Project Preparation and Appraisal)





Detailed Plan For Lectures

LTP week distribution: (LTP Weeks)

Weeks before MTE 7

Weeks After MTE 7

Spill Over 3

Week 2 Lecture 5 Introduction to Merchant Banking(Project Preparation and Appraisal)





Lecture 6 Introduction to Merchant Banking(Securities and Design of Capital Structure)

T-1:Chapter 4 and 5R-1:Chapter 8 and 9R-3:Chapter 8 and 9

Lecture 6: Nature and kinds of securitiesLecture 7: Optimum capital structure and its effect on Corporate valuation

Student will be learn about the securities and various related process


Week 3 Lecture 7 Introduction to Merchant Banking(Securities and Design of Capital Structure)

T-1:Chapter 4 and 5R-1:Chapter 8 and 9R-3:Chapter 8 and 9

Lecture 6: Nature and kinds of securitiesLecture 7: Optimum capital structure and its effect on Corporate valuation

Student will be learn about the securities and various related process


Lecture 8 Pre Issue Management(Types of Issues and Analysis of Prospectus)

T-1:Chapter 7R-1:Chapter 3 and 4

R-2:Chapter 7R-3:Chapter 3 and 4

RW-3RW-5

Lecture 8: Types of Issues Lecture 9: Analysis of Company, Management and Project

Student will learn on types of issue and contents of prospectus


Lecture 9 Pre Issue Management(Types of Issues and Analysis of Prospectus)



RW-3RW-5

Lecture 8: Types of Issues Lecture 9: Analysis of Company, Management and Project

Student will learn on types of issue and contents of prospectus


Week 4 Lecture 10 Pre Issue Management(Co-ordination, Marketing and Underwriting)



RW-3 Lecture 10: Co-ordination related to broker,banker and registrarLecture 11: Guidelines on Advertisement and observation of code of conduct. Lecture 12: Underwriting guidelines

Student will be learn about the role of brokers, bankers, registrar etc

Case analysis of COAL INIDA IPO

Week 4 Lecture 11 Pre Issue Management(Co-ordination, Marketing and Underwriting)






Lecture 12 Pre Issue Management(Co-ordination, Marketing and Underwriting)






Week 5 Lecture 13 Pre Issue Management(Pricing of Rights and Further Public Issues)

T-1:Chapter 9R-1:Chapter 3R-3:Chapter 3

RW-3 Lecture 13: Pricing of Right issue and Further Public IssueLecture 14: Revision

Student will be learn about the book building process, Issue at premium and calculation of NAV


Lecture 14 Pre Issue Management(Pricing of Rights and Further Public Issues)


RW-3 Lecture 13: Pricing of Right issue and Further Public IssueLecture 14: Revision

Student will be learn about the book building process, Issue at premium and calculation of NAV


Lecture 15 Post Issue Management(Listing Requirements)


RW-3RW-5

Lecture 15: Guidelines related to ListingLecture 16: Listing requirement for OTC Exchange of India.

Student will be learn about the post issue process- listing of public issue


Week 6 Lecture 16 Post Issue Management(Listing Requirements)


RW-3RW-5

Lecture 15: Guidelines related to ListingLecture 16: Listing requirement for OTC Exchange of India.

Student will be learn about the post issue process- listing of public issue


Lecture 17 Post Issue Management(Allotment and Despatch of Shares/Refunds)

T-1:Chapter 9 Lecture 17: Share allotment process

Student will be learn about the post issue process- Allotment and withdrawl process

Lecture followed Brainstorming

Lecture 18 Post Issue Management(Security Rating : Public Deposits and Commercial Paper)


R-3:Chapter 25

RW-3 Lecture 18: Introduction to Security RatingLecture 19: Shortcomings of security rating

Student will be learn about the rating process of various securities issued by Corporates

Case Analysis: Equity and Debt grading

Week 7 Lecture 19 Post Issue Management(Security Rating : Public Deposits and Commercial Paper)


R-3:Chapter 25

RW-3 Lecture 18: Introduction to Security RatingLecture 19: Shortcomings of security rating

Student will be learn about the rating process of various securities issued by Corporates

Case Analysis: Equity and Debt grading

Lecture 20 Post Issue Management(Debenture and Equity Rating Mechanism)


RW-8 Lecture 20: Credit Rating InstitutionsLecture 21: Revision

Student will be learning about the rating mechanism of Debt and Equity


Lecture 21 Post Issue Management(Debenture and Equity Rating Mechanism)


RW-8 Lecture 20: Credit Rating InstitutionsLecture 21: Revision

Student will be learning about the rating mechanism of Debt and Equity


MID-TERMWeek 8 Lecture 22 Loan Syndication: Domestic and

External(Loan Syndication- Domestic)


RW-1 Lecture 22: Introduction to Term LoanLecture 23: Role of DFILecture 24: Sources of funds of DFI's

Student will be learn about the role of DFI's and its sources of funding

Case discussion followed by Power point ( Case study of IFCI)

Lecture 23 Loan Syndication: Domestic and External(Loan Syndication- Domestic)





Lecture 24 Loan Syndication: Domestic and External(Loan Syndication- Domestic)





Week 9 Lecture 25 Loan Syndication: Domestic and External(Loan Syndication- External)


RW-1RW-3

Lecture 25: Introduction to External Commercial BorrowingLecture 26: Procedure for seeking ECB approval

Student will be learn about the loan syndication in international market


Lecture 26 Loan Syndication: Domestic and External(Loan Syndication- External)


RW-1RW-3

Lecture 25: Introduction to External Commercial BorrowingLecture 26: Procedure for seeking ECB approval

Student will be learn about the loan syndication in international market


Lecture 27 Homework,Quiz,Test2

Week 10 Lecture 28 Loan Syndication: Domestic and External(Conversion of Private Limited Companies into Public Limited Companies)


Lecture 28: Conversion of Private Limited Companies into Public Limited Companies

Student will learn about the various modes of conversion of a company


Week 10 Lecture 29 Mergers, Amalgamations,Takeovers and Venture Capital(Issues related to Mergers)


RW-3 Lecture 29: Introduction to Mergers and competition policy

Students will learn on issue involved in mergers

Case Analysis of SBI with its associates

Lecture 30 Mergers, Amalgamations,Takeovers and Venture Capital(Issues relating to Amalgamations)


Lecture 30: Introduction to amalgamations

Students will learn on issue involved in amalgamations


Week 11 Lecture 31 Mergers, Amalgamations,Takeovers and Venture Capital(Issues relating to Takeovers)

T-1:Chapter 17 Lecture 31: Introduction to Takeovers

Students will learn on issue involved in Takeovers


Lecture 32 Mergers, Amalgamations,Takeovers and Venture Capital(Issues relating to Venture Capital)


R-3:Chapter 27

RW-9 Lecture 32: Introduction to Venture Capital

Student will be learning about the issues relating to Venture Capital


Lecture 33 Mergers, Amalgamations,Takeovers and Venture Capital(Joint Ventures)

T-1:Chapter 21 Lecture 33: Introduction to Joint Venture

Student will get exposure to issues relating to Joint venture

Case analysis of TATA AIG joint venture in Life Insurance

Week 12 Lecture 34 Homework,Quiz,Test3

Lecture 35 Contemporary Issues in Investment(Non-Resident Indian Investors)


Lecture 35: NRI and their investment related issuesLecture 36: NRI Portfolio InvestmentLecture 37: Revision

Student will learn about the investment pattern of NRI investors

Case discussion: Role of Indian NRI's in Economic Crisis of 1991

Lecture 36 Contemporary Issues in Investment(Non-Resident Indian Investors)





Week 13 Lecture 37 Contemporary Issues in Investment(Non-Resident Indian Investors)





Lecture 38 Contemporary Issues in Investment(Foreign Institutional Investors)


Lecture 38: Introduction to FIILecture 39: Role and impact of FII on Indian MarketLecture 40: Concept of ADR, GDR, IDR

Student will learn about the investment pattern of FII


Week 13 Lecture 39 Contemporary Issues in Investment(Foreign Institutional Investors)





Week 14 Lecture 40 Contemporary Issues in Investment(Foreign Institutional Investors)





Lecture 41 Contemporary Issues in Investment(Qualified Institutional Investors)

T-1:Chapter 20 Lecture 41: Role and importance of Qualified institutional investorsLecture: 42 Revision

Student will learn about the investment pattern of Institutional Investors


Lecture 42 Contemporary Issues in Investment(Qualified Institutional Investors)

T-1:Chapter 20 Lecture 41: Role and importance of Qualified institutional investorsLecture: 42 Revision

Student will learn about the investment pattern of Institutional Investors


SPILL OVERWeek 15 Lecture 43 Spill Over

Lecture 44 Spill Over

Lecture 45 Spill Over

Scheme for CA:Component Frequency Out Of Each Marks Total Marks

Homework,Quiz,Test 2 3 10 20

Total :- 10 20

Details of Academic Task(s)

AT No. Objective Topic of the Academic Task Nature of Academic Task(group/individuals/field

work

Evaluation Mode Allottment / submission Week

Quiz1 To assess the conceptual knowledge of the students

Quiz will be conducted of 25 questions (question can have sub parts if required) and each question will carry 1 or 2 marks each. Quiz will be prepared from syllabus covered till date. Duration of test will be 45 minutes

Individual Students will be asked 25 questions which may have parts for 30 marks. Marks will be scaled down to 10

11 / 12

Test1 To assess the conceptual knowledge of the students

Test consisting of six analytical questions will be conducted (question can have sub parts if required) will be conducted and each question will carry 5 marks. Test will be prepared from syllabus covered till date. Duration of test will be 45 minutes

Individual Students will be asked 6 questions of 5 marks each. Marks will be scaled down to 10

8 / 9

HW1 Students will get to know the application of theoretical concepts in real market scenario

Students in group of 4-5 will be given a particular IPO to study. Student will be required to prepare a report on various aspects of Share issue starting from Pre listing to post listing issues . It includes appointment of merchant banker, flotation cost, Share pricing, allotment and book building process etc.

Group Report: data Collection, tabulation and analysis will have 10 marks each. Assignment will be evaluated out of 30 but the marks will be scaled down to 10

3 / 4

Plan for Tutorial: (Please do not use these time slots for syllabus coverage)Tutorial No. Lecture Topic Type of pedagogical tool(s) planned

(case analysis,problem solving test,role play,business game etc)

Tutorial1 Discussion on Optimum level of capital structure Case Analysis

Tutorial2 Study of various project appraisal techniques Problem Solving

Tutorial3 Coal India IPO analysis Case Analysis

Tutorial4 Presentation on Assignment no.1 Presentation



Tutorial7 Security rating mechanism adopted by CRISIL Case Analysis

After Mid-TermTutorial8 Case : Loan syndication ( Nabha Power project) Case Analysis

Tutorial9 Case Study of Merger of SBI with its associates Case Analysis

Tutorial10 Open house discussion on ADR, GDR and OCB as a mode of financing

Discussion

Tutorial11 Discussion of Banking Sector report 2012-13 (available at http://www.ibef.org/industry/banking-india.aspx)

Case Analysis

Tutorial12 NRI contribution towards India's growth Case Analysis

Tutorial13 FII inflow and outflow analysis for past quarter Case Analysis

Tutorial14 Revision Problem Solving

Documents

Merchant Banking