Investment Banking, Mergers &

Acquistions
IIT Powai, Mumbai, India, 4rd June 2014

Presented by- Anshul Dave

Founder & Managing Partner
Oceans Bridge Financial Advisory LLP
anshuldave@oceansbridgellp.com

Investment Banking Meaning

Investment Banking What all
activities does it actually include?

Investment Banking - Meaning

Aninvestment bankis a financial institution that
assists individuals, corporations, and governments
in raisingcapital by underwritingor acting as the
client's agent in the issuance ofsecurities (or both).
An investment bank may also assist companies
involved inMergers & Acquisitionsand provide
ancillary services such asmarket making, trading
ofderivatives andequity securities, and FICC
services (fixed income instruments,currencies,
andcommodities).
UnlikeCommercial banksandRetail banks,
investment banks do not take deposits.

Two Main lines of Businesses

of IB
Buy Side It involves trading securities for
cash or for other securities (e.g. facilitating
transactions, market-making), or the
promotion of securities (e.g. underwriting,
research, etc.)
Sell Side It involves the provision of advice
to institutions concerned with buying
investment services. Private equity funds,
mutual funds, life insurance companies, unit
trusts, andhedge fundsare the most common
types of buy side entities.

Range of Services in IB -1
Underwriting security issuance, i.e.initial public
offerings(IPOs) (Traditional)
Secondary offerings (Traditional)
Brokerage (Traditional)
Mergers & Acquisitions (Traditional)
Corporate Finance (Traditional)
Raising Funds (Both Debt & Equity) (Traditional)
Securities Research(Modern)
Proprietary Trading (Modern)
Investment management (Modern)

Range of Services in IB -2

Venture Funding
Angel Investing
Seed & Growth Capital Funding
Corporate Debt Restructuring (CDR)
Asset Restructuring (ARC)
Cross Border Joint Ventures (Part of
M&A)
Placement of CD, CP, QIB, NCD and other
instruments with FIs

Sector wise Break Up

Healthcare
Public Finance (governments)
FI (financial Institutions group)
Heavy Industrials
TMT ( Technology, Media & Telecom)
FMCG
Real Estate
Infrastructure
Agri & Food Processing
Technology
And Many More.

Core IB Activities
Front Office
Middle Office
Back Office

Core IB Activities
Front Office
There are two main areas within front
office:
Investment Banking and
Markets
which includes: Sales; Trading;
Research; Structuring

Core IB Activities

Middle Office
It includestreasury management, internal controls, and internal corporate strategy
Corporate treasuryis responsible for an investment bank's funding,
capital structure management, andliquidity riskmonitoring.
Financial controltracks 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 deskproduct controlteams. In the US & UK,
afinancial controlleris a senior position, often reporting to the chief
financial officer.
Internal corporate strategy tackling firm management and profit
strategy, unlike corporate strategy groups that advise clients, is nonrevenue regenerating yet a key functional role within investment banks.

Core IB Activities
Back Office
Operations -This involves data-checking trades that have
been conducted, ensuring that they are not wrong, and
transacting the required transfers. Many banks have
outsourced operations. It is, however, a critical part of the
bank.
Technology -Every major investment bank has considerable
amounts of in-housesoftware, created by the technology team,
who are also responsible fortech support. Technology has
changed considerably in the last few years as more sales and
trading desks are usingelectronic trading. Some trades are
initiated by complex algorithmsforhedgingpurposes.
Compliance- With internal & Govt regulations.

Other IB Businesses
Global transaction banking (Majorly
To Institutions)
Investment management (Majorly To
Institutions)
Merchant banking (Very personal
banking)
Private Banking

Mergers & Acquisitions

Merger Definition
1. The combining of two or more companies, generally by offering the
stockholders of one company securities in the acquiring company
in exchange for the surrender of their stock.
2. Voluntaryamalgamationof two firms on roughly equaltermsinto
one newlegal entity. Mergers are effected byexchangeof the premergerstock(shares) for the stock of the new firm.Ownersof each
pre-merger firm continue as owners, and theresourcesof the
mergingentitiesarepooledfor thebenefitof the new entity. If the
merged entities werecompetitors, the merger iscalledhorizontal
integration, if they weresupplierorcustomerof one another, it is
calledvertical integration.

Acquisition Definition
Acquisition Definition
A corporate action in which a company buys most, if not
all, of the target company's ownership stakes in order to
assume control of the target firm. Acquisitions are often
made as part of a company's growth strategy whereby it
is more beneficial to take over an existing firm's
operations and niche compared to expanding on its
own. Acquisitions are often paid in cash, the acquiring
company's stock or a combination of both.(Eg. Mittal
acquired Arcelor)
An acquisition is the purchase of one company by
another in which no new company is formed.

Acquisition Reasoning &

Logic
There's only one real way to achieve massive growth literally
overnight, and that's by buying somebody else's company.
Acquisition has become one of the most popular ways to grow today.
Since 1990, the annual number of mergers and acquisitions has
doubled, meaning that this is the most popular era ever for growth
by acquisition.
Companies choose to grow by acquiring others to increase market
share, to gain access to promising new technologies, to achieve
synergies in their operations, to tap well-developed distribution
channels, to obtain control of undervalued assets, and a myriad of
other reasons. But acquisition can be risky because many things can
go wrong with even a well-laid plan to grow by acquiring: Cultures
may clash, key employees may leave, synergies may fail to emerge,
assets may be less valuable than perceived, and costs may skyrocket
rather than fall. Still, perhaps because of the appeal of instant
growth, acquisition is an increasingly common way to expand.

Prominent Deals
Lots of them !

Cross Border JV
Intro

Questions
More Questions Please !

THANK YOU
FOR YOUR PATIENT LISTENING
AND KIND ATTENTION

For information purposes only

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Advisory LLP (OBFA).
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