EXECUTIVE SUMMARY

At a very macro level, ‘Investment Banking’ as term suggests, is concerned with the
primary function of assisting the capital market in its function of capital intermediation,
i.e., the movement of financial resources from those who have them (the Investors), to
those who need to make use of them for generating GDP (the Issuers). Banking and
financial institution on the one hand and the capital market on the other are the two broad
platforms of institutional that investment for capital flows in economy. Therefore, it
could be inferred that investment banks are those institutions that are counterparts of
banks in the capital markets in the function of intermediation in the resource allocation.

More commonly used today to characterize what was traditionally termed” investment
banking” is “sells side." This is trading securities for cash or securities (i.e., facilitating
transactions, market-making), or the promotion of securities (i.e. underwriting, research,
etc.).

The "buy side" constitutes the pension funds, mutual funds, hedge funds, and the
investing public who consume the products and services of the sell-side in order to
maximize their return on investment. Many firms have both buy and sell side
components.

Investment banks also act as intermediaries in trading for clients. Investment banks
differ from commercial banks, which take deposits and make commercial and retail
loans. In recent years, however, the lines between the two types of structures have
blurred, especially as commercial banks have offered more investment banking

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 OBJECTIVE OF THE STUDY

➢ To Understand the purpose of Investment Banking

➢ To understand the structure of an Investment Bank

➢ To understand the major role and principles play by Investment Banking

➢ To understand detail study of Investment Banking

➢ To study Investment opportunity of Investment Banking.

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3|Page
SCOPE OF THE STUDY

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5|Page
 LIMITATION OF THE STUDY

The major limitations of the project are:-

✓ Detailed study of the topic was not possible due to the limited size of the project.

✓ There was a constraint with regard to time allocated for the research study.

✓ Some of the respondents could not give their proper response due to lack of time
and lot of work. They at times tend to get biased which may affect the reliability
and relevance of the study.

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 COMPANY PROFILE

Way back in 60’s Few enthusiastic persons gathered together with a common goal to
make available the banking facility to the commonest of the common man. They had
an aim that any person in genuine financial difficulty or in need of finance to fulfill
his dreams whether personal or professional should have an institutional support and
he should not be a prey of traditional moneylenders. The dream of these persons
came into existence by bearing a name i.e. Dombivli Nagari Sahakari Bank Ltd. on
6th September, 1970.

Since then the bank has grown by leaps and bound. With a modest beginning in a
small 500 sq.ft. of main branch cum central office, having deposit base of and total
advances of in June 1971, it has now reached a business mix of Rs. 3035 crores
contributed by deposit of Rs. 1828 crores and Rs. 1207 crores of advances with 37
branches spread across 11 districts of Maharashtra.

SERVICES

Deposits:
 Saving
 Current
 Recurring

Loans:
 Housing
 Vehicle
 Gold
 Personal
 Corporate Loan

Other services:

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  EFT
 ECS

INTRODUCTION

An individual or institution which acts as an underwriter or agent for corporations and

municipalities issuing securities.

Investment banks also have a large role in facilitating mergers and acquisitions, private
equity placements and corporate restructuring.

Unlike traditional banks, investment banks do not accept deposits from and
provide loans to individuals.
also called investment banker.

Nevertheless, it would be unfair to conclude so, as that would confine investment

banking to very narrow sphere of its activities in the modern world of high finance. Over
the decades, backed by evolution and also fuelled by recent technologies developments,
an investment banking has transformed repeatedly to suit the needs of the finance
community and thus become one of the most vibrant and exciting segment of financial
services. Investment bankers have always enjoyed celebrity status, but at times, they have
paid the price for the price for excessive flamboyance as well.

To continue from the above words of John F. Marshall and M.E. Eills, ‘investment
banking is what investment banks do’. This definition can be explained in the context of
how investment banks have evolved in their functionality and how history and regulatory
intervention have shaped such an evolution. Therefore, the term ‘investment banking’ can
arguably be said to be of American origin.

In the US, the Glass-Steagall Act, initially created in the wake of the Stock Market
Crash of 1929, prohibited banks from both accepting deposits and underwriting
securities; Glass-Steagall was repealed by the Gramm-Leach-Bliley Act in 1999.
Investment banks may also differ from brokerages, which in general assist in the
purchase and sale of stocks, bonds, and mutual funds.

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 DEFINITIO
N

An individual or institution, which acts as an underwriter or agent for corporations

and municipalities issuing securities. Most also maintain broker/dealer operations,
maintain markets for previously issued securities, and offer advisory services to
investors.
Investment banks also have a large role in facilitating mergers and acquisitions, private
equity placements and corporate restructuring. Unlike traditional banks, investment

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 Chapter 1

RESEARCH METHODOLOGY

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 RESEARCH METHODOLOGY

Research methodology is the method or the entire procedure involved in carrying out a
research for a specific purpose. Research is a way to systematically solve the research
problem.
In it we study the various steps that are generally adopted by a research to know not only
the research methods or techniques and they need to know the criteria by which they can
decide technique and procedure will be applicable to certain problems and other will not.
Research is thus an original contribution to the existing stock of knowledge making for
its advancement. Te purpose of research is to discover answer to questions application of
scientific procedures.
 Research always starts with a question or a problem.

 Its purpose is to find answers to questions through the application of

the scientific method.

 It is a systematic and intensive study towards study a more complete

knowledge of the studied.

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Collection and Sources of data:
Market research requires two kinds of data, i.e., primary data and secondary data. Being a
firm in the financial industry data gathering here involved usage of both primary and
secondary data.

Primary data: - Well- structured questionnaires were prepared for the clients. There
were personal interview questions through telephones regarding their opinion and view
about the services offered by the employees and their feedback. With the help of email
and telephones was able to contact all the sub brokers to explain about the new services
and the requirement which they have to follow in order to conduct it.
Through observe the employees who actually undertake the operations in surveillance
team and dealing was able to analyze the system and the process. The whole team was co
operative and provided meaning full data for project. With the help of angel back office
risk management data could be accessed and analyzed accordingly.

Secondary Data: - The source of data for the Research Project is mainly secondary data
which was collected from the websites, documents, which were in printed forms like
annual reports, pamphlets, reference books based on Financial Management.

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 RIVIEW OF LITERATURE

Investment banks help companies and governments and their agencies to raise money
by issuing and selling securities in the primary market.

They assist public and private corporations in raising funds in the capital markets (both
equity and debt), as well as in providing strategic advisory services for mergers,
acquisitions and other types of financial transactions.

It is the way by which company get options to raise capital, investment banking play
major role in that. It also helps individuals to invest their money in the market in the
form of derivatives, shares, mutual fund, etc.

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 Chapter 1

STUDY OF INVESTMENT BANKING

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 WHO NEEDS AN INVESTMENT BANK?

Any firm contemplating a significant transaction can benefit from the advice of an
investment bank. Although large corporations often have sophisticated finance and
corporate development departments provide objectivity, a valuable contact network,
allows for efficient use of client personnel, and is vitally interested in seeing the
transaction close.

Most small to medium sized companies do not have a large in-house staff, and in
a financial transaction may be at a disadvantage versus larger competitors. A quality
investment banking firm can provide the services required to initiate and execute a major
transaction, thereby empowering small to medium sized companies with financial and
transaction experience without the addition of permanent overhead, an investment bank
provides objectivity, a valuable contact network, allows for efficient use of client
personnel, and is vitally interested in seeing the transaction close.

In today’s situation everybody need Investing Banking. E.g. government,

company, public, investors, etc.

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 ORGANIZATIONAL STRUCTURE OF AN INVESTMENT BANK

The main activities and units

The primary function of an investment bank is buying and selling products both on behalf
of the bank's clients and also for the bank itself. Banks undertake risk through proprietary
trading, done by a special set of traders who do not interface with clients and through
Principal Risk, risk undertaken by a trader after he or she buys or sells a product to a
client and does not hedge his or her total exposure. Banks seek to maximize profitability
for a given amount of risk on their balance sheet

An investment bank is split into the so-called Front Office, Middle Office and Back
Office. The individual activities are described below:

Front Office

➢ Investment Banking is the traditional aspect of investment banks which involves

helping customers raise funds in the Capital Markets and advising on mergers and
acquisitions. Investment bankers prepare idea pitches that they bring to meetings
with their clients, with the expectation that their effort will be rewarded with a
mandate when the client is ready to undertake a transaction. Once mandated, an
investment bank is responsible for preparing all materials necessary for the
transaction as well as the execution of the deal, which may involve subscribing
investors to a security issuance, coordinating with bidders, or negotiating with a
merger target. Other terms for the Investment Banking Division include Mergers
& Acquisitions (M&A) and Corporate Finance (often pronounced "corpfin").

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 ➢ Investment management is the professional management of various securities
(shares, bonds etc) and other assets (e.g. real estate), to meet specified
investment goals for the benefit of the investors. Investors may be institutions
(insurance companies, pension funds, corporations etc.) or private investors
(both directly via investment contracts and more commonly via collective
investment schemes eg. mutual funds) .

➢ Financial Markets is split into four key divisions: Sales, Trading, Research and
Structuring.
is often the most profitable area of an investment bank
, responsible for the majority of revenue of most investment banks In the process of , traders will

is the division which reviews companies and writes reports about their prospects, often with "buy

Structuring has been a relatively recent division as have come into play, with highly technical an

involves analyzing the market and credit risk that traders are taking onto the balance sheet in conducting

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 ensure that the above mentioned economic risks are captured accurately (as per
agreement of commercial terms with the counterparty) correctly (as per
standardised booking models in the most appropriate systems) and on time
(typically within 30 minutes of trade execution). In recent years the risk of errors
has become known as "operational risk" and the assurance Middle Offices
provide now include measures to address this risk. When this assurance is not in
place, market and credit risk analysis can be unreliable and open to deliberate
manipulation.

Back Office:

 Operations involve data-checking trades that have been conducted, ensuring that
they are not erroneous, and transacting the required transfers. While it provides
the greatest job security of the divisions within an investment bank, it is a critical
part of the bank that involves managing the financial information of the bank and
ensures efficient capital markets through the financial reporting function. The
staff in these areas are often highly qualified and need to understand in depth the
deals and transactions that occur across all the divisions of the bank.

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 INVESTMENT BANKING IN INDIA

SBI was the first Indian public sector bank to set up its merchant banking division in
1972.

This was followed by Bank of India, Central Bank of India, Bank of Baroda and
many more. SBI Caps and IDBI Caps are two prime examples of merchant banks in
India today.

Currently, there are 136 merchant banks registered with SEBI.

Currently, without holding a certificate of registration granted by the Securities and

Exchange Board of India, no person can act as a merchant banker.

The categories for which merchant banking registration may be

granted by SEBI:

Category I - to carry on the activity of issue management and to act as adviser,

consultant, manager, underwriter, portfolio manager

Category II - to act as adviser, consultant, co-manager, underwriter, portfolio

manager.

Category III -to act as underwriter, adviser or consultant to an issue

Category IV - to act only as adviser or consultant toan issue. The capital requirement
depends upon the category. The minimum net worth requirement for acting as
merchant banker are Category I -Rs. 5 crores, Category II -Rs,50 lakhs, Category III
-Rs. 20 lakhs and Category IV –Nil.

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 INVESTMENT BANKS

Domestic Players:

 SBI capital markets

 Kotak Mahindra Capital Company

 The Industrial Development Bank of India (IDBI)

 ICICI securities ltd

 Avendus

 Bajaj capital

Foreign players:

 JP Morgan chase bank

 DSP Merrill Lynch

 Deutsche Bank

 City group

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 INVESTMENT BANKS PROVIDES FOUR PRIMARY TYPES OF
SERVICES:

Raising capital, advising in mergers and acquisitions, executing securities sales and
trading, and performing general advisory services. Most of the major Wall Street firms
are active in each of these categories. Smaller investment banks may specialize in two or
three of these categories.

Raising Capital
An investment bank can assist a firm in raising funds to achieve a variety of objectives,
such as to acquire another company, reduce its debt load, expand existing operations, or
for specific project financing. Capital can include some combination of debt, common
equity, preferred equity, and hybrid securities such as convertible debt or debt with
warrants. Although many people associate raising capital with public stock offerings, a
great deal of capital is actually raised through private placements with institutions,
specialized investment funds, and private individuals. The investment bank will work
with the client to structure the transaction to meet specific objectives while being
attractive to investors.

Mergers and Acquisitions

Investment banks often represent firms in mergers, acquisitions, and divestitures.
Example projects include the acquisition of a specific firm, the sale of a company or a
subsidiary of the company, and assistance in identifying, structuring, and executing a
merger or joint venture. In each case, the investment bank should provide a thorough
analysis of the entity bought or sold, as well as a valuation range and recommended
structure.

Sales and Trading

These services are primarily relevant only to publicly traded firms, or firms, which plan
to go public in the near future. Specific functions include making a market in a stock,
placing new offerings, and publishing research reports.

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General Advisory Services:
Advisory services include assignments such as strategic planning, business valuations,
assisting in financial restructurings, and providing an opinion as to the fairness of a
proposed transaction.

PRINCIPLES OF INVESTING

1. Start Investing Now:

We say this not just to discourage procrastination, but because an early start can make all
the difference. In general, every six years you wait doubles the required monthly savings
to reach the same level of retirement income. Another motivational statistic: If you
contributed some amount each month for the next nine years, and then nothing
afterwards, or if you contributed nothing for the first nine years, then contributed the
same amount each month for the next 41 years, you would have about the same amount.
Compounding is a beautiful thing.

2. Know Yourself:

The right course of action depends on your current situation, your future goals, and your
personality. If you don't take a close look at these, and make them explicit, you might be
headed in the wrong direction.

 Current Situation: How healthy are you, financially? What's your net worth
right now? What's your monthly income? What are your expenses (and where
could they be reduced)? How much debt are you carrying? At what rate of
interest? How much are you saving? How are you investing it? What are your
returns? What are your expenses?

 Goals: What are your financial goals? How much will you need to achieve them?
Are you on the right track?

 Risk Tolerance: How much risk are you willing and able to accept in pursuit of
your objectives? The appropriate level of risk is determined by your personality,

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 age, job security, health, net worth, amount of cash you have to cover
emergencies, and the length of your investing horizon.

3. Get Your Financial House In Order:

Even though investing may be more fun than personal finance, it makes more sense to get
started on them in the reverse order. If you don't know where the money goes each
month, you shouldn't be thinking about investing yet. Tracking your spending habits is
the first step toward improving them. If you're carrying debt at a high rate of interest
(especially credit card debt), you should unburden yourself before you begin investing. If
you don't know how much you save each month and how much you'll need to save to
reach your goals, there’s no way to know what investments are right for you.

If you've transitioned from a debt situation to paycheck-to-paycheck situation to a saving

some money every month situation, you’re ready to begin investing what you save. You
should start by amassing enough to cover three to six months of expenses, and keep this
money in a very safe investment like a money market account, so you're prepared in the
event of an emergency.
And remember; never invest in anything you don't understand.

4. Develop a Long Term Plan:

Now that you know your current situation, goals, and personality, you should have a
pretty good idea of what your long-term plan should be. It should detail where the money
will go: cars, houses, college, and retirement. It should also detail where the money will
come from. Hopefully the numbers will be about the same.

Don't try to time the market. Get in and stay in. We don't know what

direction the next 10% move will be, but we do know what direction the next100% move
will be.

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Review your plan periodically, and whenever your needs or circumstances change. If you
are not confident that your plan makes sense, talk to an investment advisor or someone
you trust.

5. Buy Stocks:

Now that you've got a long term view, you can more safely invest in 'riskier' investments,
which the market rewards (in general). This requires patience and discipline, but it
increases returns. This approach reduces the entire universe of investment vehicles to two
choices: stocks and stock mutual funds. In the long run, they're the winners: In this
century, stocks beat bonds 8 out of 9 decades, and they're well in the lead again.

6. Investigate Before You Invest:

Always do your homework. The more you know, the better off you are. This requires that
you keep learning, and pay attention to events that might affect you. Understand personal
finance matters that could affect you (for example, proposed tax changes).

Understand how each of your investments fits in with the rest of your portfolio and with
your overall strategy. Understand the risks associated with each investment. Gather
unbiased, objective information. Get a second opinion, a third opinion, etc. Be cautious
when evaluating the advice of anyone with a vested interest.

If you're going to invest in stocks, learn as much as you can about the companies you’re
considering, understand before you invest,
research, Read books.

If you don't have time for all this work consider mutual funds, especially index
funds.

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7. Develop the Right Attitude:

The following personality traits will help you achieve financial success:

 Discipline: Develop a plan, and stick with it. As you continue to learn, you’ll
become more confident that you're on the right track. Alter your asset allocation based
on changes in your personal situation, not because of some short-term market
fluctuation.

 Confidence: Let your intelligence, not your emotions; make your decisions for
you. Understand that you will make mistakes and take losses; even the best investors
do. Re-evaluate your strategy from time to time, but don't second-guess it.

 Patience: Don't let your emotions be ruled by today's performance. In most cases,
you shouldn't even be watching the day-to-day performance, unless you like to. Also,
don't ever feel like it's now or never. Don't be pressured into an investment you don’t
yet understand or feel comfortable with.

The following personality traits will hurt your chances of financial success:

 Fear: If you are unwilling to take any risk, you will be stuck with investments
that barely beat inflation.

 Greed: As an investment class, 'get rich quick' schemes have the worst returns. If
your expectations are unrealistically high, you'll go for the big scores, which usually
don’t work.

It is generally a good idea to avoid making financial decisions based on emotional

factors.

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8. Get Help If You Need It:

The do-it-yourself approach isn't for everyone. If you try it and it's not working, or you're
afraid to try it at all, or you just don't have the time or desire, there's nothing wrong with
seeking professional assistance.

If you want others to handle your financial affairs for you, you will nevertheless want to
remain involved to some degree, to make sure your money is being spent wisely.

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 Chapter 1
MAJOR ROLE PLAYING INVESTMENT BANKING

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 INITIAL PUBLIC OFFERINGS

Initial Public Offerings (IPOs) are the first time a company sells its stock to the public.
Sometimes IPOs are associated with huge first-day gains; other times, when the market is
cold, they flop. It's often difficult for an individual investor to realize the huge gains,
since in most cases only institutional investors have access to the stock at the offering
price. By the time the general public can trade the stock, most of its first-day gains have
already been made. However, a savvy and informed investor should still watch the IPO
market, because this is the first opportunity to buy these stocks.

REASON FOR AN IPO

When a privately held corporation needs to raise additional capital, it can either take on
debt or sell partial ownership. If the corporation chooses to sell ownership to the public, it
engages in an IPO. Corporations choose to "go public" instead of issuing debt securities
for several reasons. The most common reason is that capital raised through an IPO does
not have to be repaid, whereas debt securities such as bonds must be repaid with interest.
Despite this apparent benefit, there are also many drawbacks to an IPO. A large drawback
to going public is that the current owners of the privately held corporation lose a part of
their ownership. Corporations weigh the costs and benefits of an IPO carefully before
performing an IPO.

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 BOOK BUILDING

Book building is the process of price discovery. That means there is no fixed price for the
shares. Instead, the company issuing the shares comes up with a price band. The lowest
price is referred to as the floor and the highest, the cap.

Bids are then invited for the shares. Each investor states how many shares s/he wants and
what s/he is willing to pay for those shares (depending on the price band).

The actual price is then discovered based on these bids.Let me explain why this happens
and how the IPO game works.
The company will 'discover' its price

Earlier, the company determined a fixed price for the stock issue. The issue was marketed
to the general public through advertisements and a media campaign.

The process of determining the price at which an Initial Public Offering will be offered.
The book is filled with the prices that investors indicate they are willing to pay per share,
and when the book is closed, the issue price is determined by an underwriter by analyzing
these values.

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 VENTURE CAPITAL

Money provided by investors to startup firms and small businesses with

perceived long-term growth potential. This is a very important source of funding for
startups that do not have access to capital markets. It typically entails high risk for the
investor, but it has the potential for above-average returns.

Venture capital can also include managerial and technical expertise. Most venture capital
comes from a group of wealthy investors, investment banks and other financial
institutions that pool such investments or partnerships. This form of raising capital is
popular among new companies or ventures with limited operating history, which cannot
raise funds by issuing debt. The downside for entrepreneurs is that venture capitalists
usually get a say in company decisions, in addition to a portion of the equity.

NEED OF VENTURE CAPITAL

 There are entrepreneurs and many other people who come up with bright
ideas but lack the capital for the investment. What these venture capitals do
are to facilitate and enable the start up phase.

 When there is an owner relation between the venture capital providers and
receivers, their mutual interest for returns will increase the firms motivation to
increase profits.

 Venture capitalists have invested in similar firms and projects before and,
therefore, have more knowledge and experience. This knowledge and
experience are the outcomes of the experiments through the successes and
failures from previous ventures, so they know what works and what does not,
and how it works. Therefore, through venture capital involvement, a portfolio
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 firm can initiate growth, identify problems, and find recipes to overcome
them.

MUTUAL FUND

A mutual fund is a type of professionally-managed collective investment scheme that

pools money from many investors to purchase securities. While there is no legal
definition of mutual fund, the term is most commonly applied only to those collective
investment schemes that are regulated, available to the general public and open-ended in
nature. Hedge funds are not considered a type of mutual fund.

TYPES OF MUTUAL FUND

Open-end funds:

Open-end mutual funds must be willing to buy back their shares from their investors at
the end of every business day at the net asset value computed that day. Most open-end
funds also sell shares to the public every business day; these shares are also priced at net
asset value. A professional investment manager oversees the portfolio, buying and selling
securities as appropriate. The total investment in the fund will vary based on share
purchases, share redemptions and fluctuation in market valuation. There is no legal limit
on the number of shares that can be issued.

Closed-end funds:

Closed-end funds generally issue shares to the public only once, when they are created
through an initial public offering. Their shares are then listed for trading on a stock
exchange. Investors who no longer wish to invest in the fund cannot sell their shares back
to the fund (as they can with an open-end fund). Instead, they must sell their shares to
another investor in the market; the price they receive may be significantly different from

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net asset value. It may be at a "premium" to net asset value (meaning that it is higher than
net asset value) or, more commonly, at a "discount" to net asset value (meaning that it is
lower than net asset value). A professional investment manager oversees the portfolio,
buying and selling securities as appropriate.
Closed-end funds have been declining in popularity. At the end of 2010, there were 624
closed-end funds in the United States with combined assets of $241 billion.

Unit investment trusts:

Unit investment trusts or UITs issue shares to the public only once, when they are
created. Investors can redeem shares directly with the fund (as with an open-end fund) or
they may also be able to sell their shares in the market. Unit investment trusts do not
have a professional investment manager. Their portfolio of securities is established at the
creation of the UIT and does not change. UITs generally have a limited life span,
established at creation.

Exchange-traded funds:

A relatively recent innovation, the exchange-traded fund or ETF is often structured as an

open-end investment company, though ETFs may also be structured as unit investment
trusts, partnerships, investments trust, grantor trusts or bonds (as an exchange-traded
note). ETFs combine characteristics of both closed-end funds and open-end funds. Like
closed-end funds, ETFs are traded throughout the day on a stock exchange at a price
determined by the market. However, as with open-end funds, investors normally receive
a price that is close to net asset value. To keep the market price close to net asset value,
ETFs issue and redeem large blocks of their shares with institutional investors.

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 PORTFOLIO MANAGEMENT SERVICES

A list of all those services and facilities that are provided by a portfolio
manager to its clients, relating to the management and administration of portfolio of
securities or the funds of clients, is referred to as ‘portfolio management services’.
The term ‘portfolio’ means the total holdings of securities belonging to any person.

Portfolio Manager:

According to SEBI, ‘Portfolio Manager’ means any person who pursuant

to contract or arrangements with a clients, advices or directs or undertakes on behalf
of the clients the management or administration of a portfolio of securities or the
funds of client, as the case may be

FUNCTIONS

The objective of portfolio management is to develop a portfolio that has

maximum return at whatever level of risk the investor deems appropriate.

Risk Diversification

An essential function of portfolio management is spread risk akin to investment of

assets. Diversification could take place across different securities and across different
industries. Diversification achieved in different industries is an effective way of
diversifying the risk in an investment. Simple diversification reduces risk within
categories of stocks that all have the same quality rating.

The portfolio managers could as well adopt the ‘Markowitz model’ whereby
portfolio risk are sought to be reduced through combining assets, which are less than
perfectly positively correlated.

Efficient Portfolio:

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A portfolio manager aims at building ‘dominant investment’ called ‘efficient
portfolio’. An efficient portfolio consists of combination of assets that maximizes
return and maximizes the risk level of expected return. The objective of portfolio
management is to analyze different individual assets and delineate efficient portfolios.
A group of portfolio of efficient portfolios is called ‘efficient set of portfolios’. The
efficient set of portfolio comprises efficient frontier.

Asset allocation

An important function of portfolio management is asset allocation. It deals with

attaining proportion of investments from categories. Portfolio managers basically aim
at stock-bond mix. For this purpose equally weighted categories of assets are used.

Beta Estimation

Another important function of a portfolio manger is to make an estimate of beta

coefficient. It measures and ranks the systematic risk of different assets. Beta
coefficient is an index of the systematic risk. This is useful in making ultimate
selection of securities for investment by portfolio manager.

Rebalancing Portfolios:

Rebalancing of portfolio involves the process of periodically adjusting the portfolios

to maintain the original conditions of portfolio. The adjustments may be made either
by way of ‘constant proportion portfolio’ or by way of ‘constant beta portfolio’. In
constant proportion portfolio, adjustments are made in such a way as to maintain the
relative weighting in portfolio components according to the change in prices.

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 STRATEGIES

A Portfolio manager may adopt any of the following strategies as part of an

efficient management:

Buy and Hold Strategy

Under the ‘buy and hold’ strategy, the portfolio manager builds a portfolio of stock,
which is not disturbed at all for a long period of time. This practice is common in case
of perpetual securities such as common stock.

Indexing

Another strategy employed by portfolio managers is ‘ indexing’. Indexing involves an

attempt to replicate the investment characteristics of a popular measure of the bond
market. Securities that are held in best-known bond indexes are basically high-grade
issues.

Laddered Portfolio

Under the laddered portfolio, bonds are selected in such a way that their maturities
are spread uniformly over a long period of time. This way a portfolio manager aims at
distributing the funds throughout the yield curve.

Barbell Portfolio

Under this portfolio strategy, less investment of funds is made in middle maturities.

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 FINDINGS AND SUGGESTIONS

Findings:

Investors has to face risk for gaining profit.

From the project main finding is the amounts of revenue are getting from
investment banking services are equal to commercial banking revenues.

Investment bankers have more competition from foreign banks.

Foreign banks are playing more roles in mergers and acquisition deals.

Suggestions:

Investment bankers have to concentrate on the advertisements.

And also they have to offer more products equal to their competitors.

They have to give effective services to the clients.

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 CONCLUSION

Investment banking in India, the future looks bright for the industry as a whole in
India.

In India present scenario investment banks are playing more roles in financial markets
on behalf of their clients in the form of raising funds, trading securities, advisory
services.

But investment banks have more competition from foreign banks. If they concentrate
more on advertisement and effective services to the clients they will get more success.

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 BIBILOGRAPHY

 www.dnsbank.in
 www.google.com
 http://en.wikipedia.org
 Investment banking and brokerage- John F Marshall and M. E. Ellis, probus
publishing

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