An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both

1. Investment banking
An investment
banking is a financial
institution that assists
individuals,
corporations and
governments in
raising financial
capital by
underwriting or acting
as the client’s agent in
the issuance of
securities or both.

2. Top 10 investment banking firms in India
ABN-AMRO BANK
AUSTRALIA – NEW ZEALAND BANKING GROUP LTD
CITI BANK
DEUTSCHE BANK
J.P.MORGAN PRIVATE LTD
GOLDMAN SACHS SERVICES PRIVATE LTD
HSBC SECURITIES & CAPITAL MARKETS PRIVATE
LTD
LEHMAN BROTHERS FINANCIAL SERVICES (INDIA)
PRIVATE LTD
D.S.P.MERRILL LYNCH LIMITED
MORGAN STANLEY INDIA COMPANY PRIVATE LTD

3. Who are an investment bank's main clients?
Corporates: operating companies in sectors including energy,
retail, construction, technology, etc. and other financial services
organisations.
Funds: investment vehicles which pool investors' assets and
follow a particular investment strategy
Sovereigns: governments, but also quasi-governmental
institutions
High net worth individuals: Usually defined as per terms of an
organization.
The bank itself: some of a bank's trading and investment
activities are conducted not for an external client but to make
profits for itself, or to protect the bank against risks.

4. What do investment banks do for their clients?
( Role of Investment Bank)
• Giving advice: advising clients on buying and selling companies,
raising money, economic risk management
• Investment management: advising on and managing the
investment of assets.
• Providing financing: making loans to and purchasing the shares
of corporates.
• Trading: buying and selling shares, debt products, commodities,
derivatives and related products on behalf of clients and to make
money for the bank.
• Research: Monitoring industry trends and economic
developments for the bank's own purposes and for clients.

5. Activities of a Typical Investment Bank
• Raise equity capital (e.g., helping launch an IPO or creating a
special class of preferred stock)
• Raise debt capital (e.g., issuing bonds to help raise money for
a factory expansion)
• Insure bonds or launching new products (e.g., such as credit
default swaps)
• Engage in proprietary trading where teams of in-house
money managers invests or trades the company's own money
for its private account.

6. How do investment banks make money from
offering these services to their clients?
• Fees: charged for advice, providing finance, keeping money
available for clients, arranging financing for clients from other
parties, trading services, investment services, and research.
• Dividends: income from investments made in shares.
• Interest: income from loans made.
• Investments: profits from investments made.
• Trading: profit made from buying and selling securities.

7. The Buy Side vs. Sell Side of an Investment Bank
• The sell side typically refers to selling shares of newly issued
IPOs, placing new bond issues, engaging in market making
services, or helping clients facilitate transactions.
• The buy side, in contrast, worked with pension funds, mutual
funds, hedge funds, and the investing public to help them
maximize their returns when trading or investing in securities
such as stocks and bonds.

8. Investment banks are divided into three categories
• Front Office Investment Bank Services - helping companies
in mergers and acquisitions , corporate finance , professional
investment management.
• Middle Office Investment Bank Services - include
compliance with government regulations and restrictions.
• Back Office Investment Bank Services - handles things
such as trade confirmations, ensuring that the correct
securities are bought, sold, and settled for the correct
amounts etc.

9. Need for Investment Banking
• Provision of finance: IB provide money and access to other
sources of money. Without this money, these businesses
couldn't function.
• Advice: IB advise corporates, on the best ways to use their
money and to conduct transactions, which helps to foster
economic growth and stability.
• Risk management: Allow companies and governments to
effectively manage risks, ensuring that the effect of these
issues on the real economy is minimized.
• Information: IB provide analysis of corporate activity and
economic trends which assists the financial sector, government
policy makers, businesses and ordinary people.

10. How are their activities regulated?
• Capital adequacy
• Activities undertaken
• Trading on their own behalf
• Insider dealing
• Money laundering
• Transparency
• Pay

11. Activities in Mergers & Acquisitions?
Vital
market
intelligenc
e
Preparing
a list of
prospecti
ve targets
Assessmen
t of the
current
valuation
is done to
know the
price
expectatio
ns
Documen
tation
Managem
ent
meetings
Negotiatio
n terms
and
closing
documents

12. Principal tasks of the investment bank in
IPO
• Assess the company's suitability for listing.
• Participate in drafting the prospectus and coordinating due
diligence.
• Determine the price and underwrite the offering.
• Liaise with regulatory authorities.
• Oversee settlement, including underwriting and the exercise of
any over-allotment option and price-stabilization mechanisms,
as required.
• Market the offering and book building (if required).