MERGERS, ACQUISITIONS AND CORPORATE RESTRUCTURING Context: This course is concerned with the decision-making in the finance sub-system

of the enterprise, such that the short-term and long-term needs of the enterprise are effectively met. The enterprise needs to be financially efficient, viable and sustainable. This necessitates looking into the enterprise and the finance function in a larger perspective facing key challenges posed by the global markets. Objectives: At the end of the course the student should be able to a) Understand the strategic element involved in financial decision-making; b) Effectively and efficiently manage the both sides of balance sheet, i.e. financing and investing; c) Look alternative ways for growing the organization through mergers and acquisitions. Outlines: 1. Financial Environment: Determining financial objectives within the strategic planning process, identify key stakeholders of organizations and the interests of each stakeholder group, corporate social responsibility, its relationship to the objective of maximising shareholder wealth, agency theory and its relevance to financial managers, the professional, regulatory and legal framework relevant to financial management. 2. Mergers and Acquisitions: Introduction to M & A, Categorize merger and acquisition (M & A) activities based on forms of integration and types of mergers, Common Motivations behind M & A activity, The M & A Process, Due Diligence, EPS Bootstrapping and Calculation of postmerger EPS, Valuing a Target Company, Evaluating merger bid, Post Merger Value of the Acquirer/Gains accrued to the acquired vs. acquirer, Reasons for Failure for M & A/Problems for M & A in India, Pre-Offer and Post-Offer Takeover Defense Mechanism, Cross Border M & A. 3. Corporate Debt Restructuring: CDR System and its objectives, Standing Forum, Core Group, Empowered Group, CDR Cell, Monitoring Mechanism, CDR Performance. Recommended Books 1. Ruth Bender and Keith Ward, Corporate Financial Strategy. Butterworth Heinemann 2. Harold Bierman, Jr., Corporate Financial Strategy and Decision Making to Increase Shareholder Value, Wiley. 3. S. R. Vishwanath, Chandrasekhar Krishnamurti, Advanced Corporate Finance, PHI Learning. 4. Mark Grinblatt and Sheridan Titman, Financial Markets and Corporate Strategy, 2nd Edition (Irwin/McGraw-Hill, 2002) 5. Joseph P. Ogden, Frank C. Jen, Philip F. O'connor, Advanced Corporate Finance: Policies and Strategies, Prentice Hall.
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6. Brealey, Myers, and Allen, Principles of Corporate Finance 9/e (BMA). 7. Westin, Siu and Johnson. Takeovers, Restructuring and Corporate Governance, 3rd edition. Prentice Hall. 8. AswathDamodaran, Investment Valuation, Second Edition, 2002, John Wiley & Sons, Inc. 9. HershShefrin, Behavioral Corporate Finance, McGraw-Hill 10. Richard H. Thaler, Advances in Behavioral Finance, Russell Sage Foundation. 11. Arnold, G. Handbook Of Corporate Finance: A Business Companion To Financial Markets, Financial Times Prentice Hall. 12. Ogden, J.P. /Jen, F.C. Advanced Corporate Finance: Policies And Strategies, Pearson Education Ltd. 13. SudiSudarsanam, Creating Value from Mergers and Acquisitions, FT Prentice Hall. 14. H.R.Machiraju Mergers, Acquisitions and Takeovers, New Age International Publishers. 15. P.MohanRao, Mergers And Acquisitions of Companies, Deep and Deep Publications. 16. Ramanujam, Mergers and Acquisitions, Lexis Nexis. 17. Kamal Ghosh Ray, Mergers and Acquisitions: Strategy, Valuation and Integration, PHI Learning. 18. Weston, Mergers and Acquisitions, Tata McGraw Hill.

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PROJECT FINANCE Context With a fluid global environment and increasing pace of innovation and technological changes, enterprises have to undertake modernisation and up gradation more frequently than in the past. Not only this, there can be standalone new projects too, right from pipelines to refineries and electric-generating facilities, hydroelectric projects and so on. This calls for deploying funds on a one-time basis and monitoring their utilisation towards the desired end. Objectives Students should be able to: 1. Define the principles of searching, screening, defining and evaluating projects; 2. Ensuring financial feasibilities of the project and satisfying their funding requirements; 3. Understanding different kinds of projects risks and their mitigation; 4. Describe and meet the requirements of financing institutions and regulatory institutions. Content Outline 1. An Overview of Project Finance Introduction to project finance, project life cycle and its impact on the feasibility Project identification Different types of needs leading to different types of projects under BMRED (Balancing, Modernization, Replacement, Expansion and Diversification) Considerations involved in decision under each of these types Macro parameters in project selection Different considerations for project under private, public and joint sectors Project formulation: preparation of project profile, Structuring Projects: Description of a Typical Project Finance Transaction. 2. Project appraisal Different types of appraisal Technical, economic, organizational and managerial, commercial and financial Projected Financial Statements Financial techniques for project appraisal and feasibility discounted cash flow and non-discounted cash flow methods Social cost benefit analysis and economic rate of return Non-financial justification of projects. 3. Project Risk Analysis Risk Analysis in Capital Investment Decisions what is Risk Types of Risk Measurement of Risk Method of Incorporating Risk into Capital Budgeting Monte Carlo Simulation Deal structuring through risk identification, assessment & mitigation Managing Project Risks: How risk management creates value in project finance. 4. Project Financing Pattern of financing Sources of finance Impact of taxation Public loans Small savings Surplus of public enterprises Deficit financing Foreign aid Public sector project financing Syndication Leverage Leases Various debt instruments and innovative Structures Equator principles securitizing project loans PPP Models of Project Finance PPP models from Supply and Service Contracts Management Agreements Leasing, DBO, BOT, BOO, Privatization Infrastructure Project Financing. 5. Special Issues Project Financial Closure - The role of credit ratings in project finance transactions the role of Private Equity and Venture Capital Public Private Partnerships.

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Recommended Books 1. Prasanna Chandra, Projects, Planning, Analysis, Selection, Financing, Implementation and Review- Tata McGraw Hill Publishing. 2. Fabozzi,F., and P.Nevitt, 2000, Project Financing, Euro money Publications (London, UK). 3. Finnerty, J.D., Project Finance: Asset-Based Financing Engineering, John Wiley & Sons (New York,NY). 4. Bhavesh M Patel, Project Management: Strategic Financial Planning, Evaluation and Control, Vikas Publishing House. 5. D.P.Sarda, Project Finance: Appraisal & Follow-up, ABD Publishers. 6. S. Choudhury -Project Management - -Tata McGraw Hill Publishing. 7. Gopalkrishnan, P./Moorthy, V.E.R, Text Book Of Project Management, Macmillan India Limited. 8. Joy, P.K. Total Project Management: The Indian Context, Macmillan India Limited. 9. Young, T.L., Project Management Manual: Planning Projects, Leading Projects, Implementing Projects, Global Business Press. 10. Krishnamurthi, S. Project Finance: Policies, Procedures and Practice, Vinod Law Publications.

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FINANCIAL PLANNING AND WEALTH MANAGEMENT Context: The Financial Services sector has grown by leaps and bounds in India in the last two decades. With increasing competition and greater consumer awareness, a lot of opportunities for employment and growth have been generated in financial planning and wealth management. Objectives: 1. To identify and comprehend the different elements of the Financial Planning Process; 2. To provide an overview of the Wealth Management Context Outlines: 1. Understanding financial planning: meaning, need, scope and goals. Wealth Managementbusiness overview. Financial Planning and Wealth Management Process, Risk Profiling of clients. 2. Asset Allocation: Building model portfolio, portfolio re-balancing.etc. 3. Portfolio Performance Measurement:performance measurement parameters, Risk adjusted return-sharpe,treynor and jensens alpha,performance attribution. 4. Investment Products-equity market, equity derivatives,bond markets,currency markets,commodity derivative,mutual funds and insurance,alternative investment products,etc. 5. Retirement Planning. . Recommended Books: 1. Dun/Bradstreet Wealth Management New Delhi, TataMcgraw-Hill Publishing Company Limited/2009, ix pp 144
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2. Bagchi, S.K.WealthManagement: Includes A Detailed Analysis OF Risk-Free & Low Risk Investments Mumbai/Jaico Publishing House/2009, xiv, pp 92 3.Jack,R,Kapoor, Les R.Dlabay and Robert J.Hughes, Personal Finance.McGraw Hill 4.Arthur Keown, Personal Finance Workbook, Pearson. 5.Prasanna Chandra, Investment Analysis and Portfolio Management, TataMcGraw Hill.

CREDIT RISK MANAGEMENT Objectives:The following are the key objectives of this course: 1. To establish a strong and pro-active credit risk management framework for the organization 2. How to measure credit risk for different portfolios 3. Basel II/RBI guidelines for measuring and managing credit risk. Contents: 1. Introduction: Concept of credit risk management, Credit risk management process, Classification of credit risk Default risk and migration risk, Risk mitigating measures. 2. Measuring Credit risk: Probability of default, Exposure at Default, Loss Given Default Modeling credit losses, Concept of expected and un-expected losses, Joint probabilities of default 3. Credit risk computation: The computation of credit risk for a market portfolio using Credit Metrics methodology, Credit risk computation challenges - Cumulative default probabilities, Transition matrices. 4. Credit risk management: Managing credit risk through pricing and capital cushion, Concept of RAROC, Mitigation of credit risk through Netting arrangements, Collateral, Limits,

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Termination Rights, and Guarantees. Credit derivatives. Credit risk exposure monitoring, Credit risk management in banks in practice. Role of technology in credit risk management 5. Basel and RBI Guidelines for management of credit risk. Recommended Books: 1. D.D.Mukherjee- Credit Appraisal, Risk Analysis and Decision Making. Snowhite. 2. Ciby Joseph-Credit Risk Analysis.Tata McGraw Hill. 3. S.K.Bagchi-Credit Risk Management.Jaico Publishing House. 4. Hrishikes Bhattacharya-Banking Strategy, Credit Appraisal, And Lending Decisions: A Risk (Return Framework).Oxford University Press. 5. B.N.Dash-Commercial Banking Risk and Credit Management.Arise Publishers and Distributors. 6. S.K.Bidhani, P.K.Mitra,Pramod Kumar-Credit Risk Management. Taxmann Publications. 7. David Lando-Credit Risk Management. New Age International. 8. Da Silva A-Credit Risk Models, New Tools for Credit Risk Management, ICFAI Press.

DERIVATIVES Objectives: This course provides an in depth understanding of various derivative securities and markets. It covers options, futures, forwards, swaps, interest rate forwards and options, commodity derivatives. It aims at giving the conceptual understanding as well as practical knowledge about derivative markets in India. Contents:

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1.Derivative Markets: Definition and Origin of Derivatives, Derivative Markets and Instruments, Options, Derivative Terminologies. 2.Forwards and Futures: Structure of Forwards and Futures Markets, Forward Contracts, Futures Exchanges and Contracts, Types of Futures, Mechanics of Future Trading, Major Characteristics, Trading Process, Price Quotations, Hedging and Speculation with Commodity Futures, Interest Rate Futures, Currency Futures and Stock Index Futures, Principles of Pricing Forwards, Futures and Options on Futures Contracts, Forwards and Futures Hedging, Pricing of Index Futures Contracts, Stock Index Arbitrage. 3. Options: Option Pricing, Principles of Call and Put Option Pricing, Binomial and Black Scholes Option Pricing Models, Factors Affecting Option Prices, Basic and Advanced Option Strategies, Types of Options, Interest Rate Options, Currency Options and Trading Strategies, Option Pricing Models, Options on Futures Contracts and Exotic Options, Elementary Inventory Strategies, Complex Investment Strategies, Covered Call Writing, Protective Put, Straddles and Strangles, Spreads, Evaluation of Option Based Investment Strategies, Risk Associated with Options, Options Sensitivities. 4. Swaps: Evolution of Swap Market, Interest Rate Swaps, Currency Swaps, Equity Swaps, Swap Terminology, Motivations Underlying Swaps, Mechanics of Swap Transactions, Valuation and Application of Swaps. 5. Interest Rate Forwards and Options: Forward Rate Agreements, Interest Rate Options, Interest rate Swaps and Forwards, Interest Rate Derivatives Strategies. 6.Commodity Derivatives: Evolution of Commodity Derivative Markets in India, Products, Participants, Functions, Instruments Available for Trading, Pricing of Commodity Futures, Hedging, Speculation, Arbitrage, Trading, Clearing and Settlement, Risk Management, Regulatory Framework. Recommended Books: 1. Hull, John, C. (2009), Options, Futures, and Other Derivatives, Pearson Prentice Hall. 2. Kolb, Robert W., and Overdahl, James A. (2003), Financial Derivatives, John Wiley & Sons, Inc. 3. Chance, Don M., and Brooks, Robert (2008), Introduction to Derivatives and Risk Management. Thomson South Western. 4. Whaley, Robert E. (2006), Derivatives: Markets, Valuation, and Risk Management, John Wiley & Sons, Inc. 5. Schofield, Neil C. (2007), Commodity Derivatives: Markets and Applications, John Wiley & Sons, Inc.

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