CORPORATE FINANCE/

FINANCIAL MANAGEMENT

Financial System &

Sources of Funds

- Dr. Sandeep Goel

 FINANCIAL
SYSTEM

FINANCIAL FINANCIAL FINANCIAL

INSTITUTIONS MARKETS INSTRUMENTS
 Financial
Institutions

Non-
Regulatory Intermediaries
Intermediaries

- RBI NBSFOs/DFIs
- SEBI Banking Non- Banking
(NABARD)
- IRDA UTI, LIC,GIC
- PFRDA
 Financial
Markets

Money Capital
Market Market

Short- term funds Long –term funds

Eg. Treasury bills Eg. Shares, Debentures, ADRs / GDRs
Commercial papers (stock market)
CODs
Call money
-contd.-

Source: http://www.tradingeconomics.com/india/interbank-rate
Commercial Paper Settlement Data (NSE)
Data for - 12-Jan-2017
Weighted Weighted
Trade Nominal Average Average
Descriptor Quantity
Date Value Price Yield
(Rs.) (%)
TATA STEEL LIMITED 11-Jan- 6,00,00,00
12000 99.02 6.35
67D CP 10MAR17 0017 ,000.00
INDIABULLS HOUSING
11-Jan- 5,00,00,00
FINANCE LIMITED 60D 100 99.35 6.60
0017 0.00
CP 17FEB17
KHYATI REALTORS
11-Jan- 1,50,00,00
PRIVATE LIMITED 90D 3000 99.88 7.25
0017 ,000.00
CP 18JAN17
JM FINANCIAL
11-Jan- 5,00,00,00
PRODUCTS LIMITED 100 99.26 6.50
0017 0.00
363D CP 23FEB17
EDELWEISS
11-Jan- 5,00,00,00
SECURITIES LIMITED 100 99.69 6.00
0017 0.00
29D CP 31JAN17
Certificate of Deposit Settlement Data (NSE)
Data for - 12-Jan-2017
Weighted Weighted
Trade Nominal Average Average
Descriptor Quantity
Date Value Price Yield
(Rs.) (%)
ICICI BANK LIMITED CD 11-Jan- 25,00,00,00
2500 99.18 6.31
01MAR17 0017 0.00
ICICI BANK LIMITED CD 11-Jan- 25,00,00,00
2500 95.61 6.47
28SEP17 0017 0.00
ICICI BANK LIMITED CD 12-Jan- 13,26,00,00
1326 99.33 6.27
20FEB17 0017 0.00
ICICI BANK LIMITED CD
12-Jan- 1,00,00,00
10APR17 100 98.47 6.44
0017 0.00

CORPORATION BANK
12-Jan- 2,75,00,00,
CD 27500 99.17 6.25
0017 128.00
02MAR17
 Depository Receipts
• They are shares of Indian companies listed and traded in
foreign stock exchanges.

• They are denominated and traded in a foreign currency.

• Depository receipts are so called because they are receipts

issued by foreign investment banks acting as a ‘depository of
shares’ issued by a domestic company.

• Shares are deposited with a ‘local’ custodian appointed by the

depository.
 ADRs and GDRs

• ADRs are certificates representing Indian shares, listed and

traded in American stock exchanges (mostly in NYSE,
NASDAQ and AMEX)
- Issued by a US Depository in US
- ADRs are traded in US Dollars (USD)

• GDRs are certificates, listed and traded in American stock

exchanges and the London and Luxembourg stock exchanges.

- GDRs may be traded in Euros or USD

 BORROWED FUNDS
Debentures

• They are known as ‘creditorship securities’

• Priority over shares in repayment

• Fixed Rate of Interest (Coupon Rate)

• Fixed Maturity
 Debenture Rating Symbols
AAA – Highest Safety

AA – High Safety
Investment
A – Adequate Safety Grade

BBB – Moderate Safety/

Low Safety

Investment Grade – Safety in terms of prompt

payment of interest and principal
-contd.-

BB – Inadequate Safety

B - High Risk Speculative

Grade
C - Substantial Risk

D - Default

Speculative Grade – Increasingly susceptible to default