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    Analysis of Investment Banking in Real Estate in India

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    Vinayak Padwal
    Investment banking includes a variety of activities like underwriting securities, providing financial advisory services, and managing assets for corporations, governments, and individuals. Unlike traditional banks, investment banks do not accept deposits but help companies raise funds through public offerings on capital markets. They issue and trade stocks and bonds, provide merger and acquisition advice, and engage in other advisory services. While investment banks were once separate from commercial banks, today their activities have converged, with both types of institutions now offering an overlapping range of banking services.

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    Analysis of Investment Banking in Real Estate in India

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    Vinayak Padwal
    56 views11 pages
    Investment banking includes a variety of activities like underwriting securities, providing financial advisory services, and managing assets for corporations, governments, and individuals. Unlike traditional banks, investment banks do not accept deposits but help companies raise funds through public offerings on capital markets. They issue and trade stocks and bonds, provide merger and acquisition advice, and engage in other advisory services. While investment banks were once separate from commercial banks, today their activities have converged, with both types of institutions now offering an overlapping range of banking services.

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    Investment banking includes a variety of activities like underwriting securities, providing financial advisory services, and managing assets for corporations, governments, and individuals. Unlike traditional banks, investment banks do not accept deposits but help companies raise funds through public offerings on capital markets. They issue and trade stocks and bonds, provide merger and acquisition advice, and engage in other advisory services. While investment banks were once separate from commercial banks, today their activities have converged, with both types of institutions now offering an overlapping range of banking services.

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    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    56 views11 pages

    Analysis of Investment Banking in Real Estate in India

    Uploaded by

    Vinayak Padwal
    Investment banking includes a variety of activities like underwriting securities, providing financial advisory services, and managing assets for corporations, governments, and individuals. Unlike traditional banks, investment banks do not accept deposits but help companies raise funds through public offerings on capital markets. They issue and trade stocks and bonds, provide merger and acquisition advice, and engage in other advisory services. While investment banks were once separate from commercial banks, today their activities have converged, with both types of institutions now offering an overlapping range of banking services.

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    of 11

    ANALYSIS OF INVESTMENT BANKING IN REAL ESTATE IN INDIA

    Overview of investment banking


    Investment banking includes a wide variety of activities, including underwriting, selling, and trading securities, providing financial advisory services, and managing assets. Investment banks cater to a diverse group of stakeholders companies, governments, nonprofit institutions, and individuals and help them raise funds on the capital market. They perform the following major functions for their customers:

    Serve as trading intermediaries for clients. Lend and invest banks assets. Provide advice on mergers, acquisitions, and other financial transactions. Research and develop opinions on securities, markets, and economies. Issue, buy, sell, and trade stocks and bonds.
    Investment banks once contrasted sharply with commercial banks, where people mainly deposited their money and required commercial and retail loans. In recent years, though, the two types of structures have become increasingly similar; commercial banks now offer more investment banking services as they attempt to corner the market by presenting themselves as one-stop shops.

    Investment banks do differ from brokerages and broker-dealers, though, even though those three entities are often thought of as one and the same. A brokerage firm takes a commission for assisting in the purchase and sale of stocks, bonds, and mutual funds. A broker-dealer executes similar functions, but it also trades for its own account. An investment bank actually is a broker-dealer that provides corporations with financial services, such as assistance with initial public offerings, merger and acquisitions advice, and strategic planning.

    Introduction
    Investment banking is a particular form of banking which finances capital requirements of an enterprise. Investment banking assists as it performs IPOs, private placement and bond offerings, acts as broker and carries through mergers and acquisitions. Investment banking is a field of banking that aids companies in acquiring funds. In addition to the acquisition of new funds, investment banking also offers advice for a wide range of transactions a company might engage in. Traditionally, banks either engaged in commercial banking or investment banking. In commercial banking, the institution collects deposits from clients and gives direct loans to businesses and individuals. Through investment banking, an institution generates funds in two different ways. They may draw on public funds through the capital market by selling stock in their company and they may also seek out venture capital or private equity in exchange for a stake in their company. An investment banking firm also does a large amount of consulting. Investment bankers give companies advice on mergers and acquisitions, for example. They also track the market in order to give advice on when to make public offerings and how best to manage the business' public assets. Some of the consultative activities investment banking firms engage in overlap with those of a private brokerage, as they will often give buy-and-sell advice to the companies they represent.

    Few Facts about Investment Banking


    Unlike traditional banks, investment banks do not accept deposits from and provide loans to individuals also called investment banker. Investment banks help companies and governments (or their agencies) raise money by issuing and selling securities in the capital market (both equity and debt). Almost all investment banks also offer strategic advisory services for mergers, acquisition, divestiture or other financial services for clients, such as: trading of derivatives fixed income foreign exchange commodity Trading securities for hard cash or securities (i.e., facilitating dealings, market-making), or the endorsement of securities (i.e., underwriting, research, etc.) is referred to as the "sell side". On the other hand the "buy side" constitutes : the pension fund, mutual funds, hedge funds, The investing public who use the goods and services of the sell-side with the intention of make best use of their return on investment. Many firms have both buy and sell side mechanism

    Function of Investment Banking


    Investment banks have multilateral functions to perform. Some of the most important functions of investment banking can be jot down as follows: Investment banking help public and private corporations in issuing securities in the primary market, guarantee by standby underwriting or best efforts selling and foreign exchange management. Other services include acting as intermediaries in trading for clients. Investment banking provides financial advice to investors and serves them by assisting in purchasing securities, managing financial assets and trading securities. Investment banking differs from commercial banking in the sense that they don't accept deposits and grant retail loans. However the dividing line between the two fraternal twins has become flimsy with loans and securities becoming almost substitutable ways of raising funds. Small firms providing services of investment banking are called boutiques. These mainly specialize in bond trading, advising for mergers and acquisitions, providing technical analysis or program trading.

    Basic of Investment Bank


    The banking sector is one of the biggest contributors to a nation's economy, provided it is managed in an innovative and professional environment. Investment banking is one rapidly growing form of banking. An investment bank is a type of financial intermediary that performs a variety of functions such as underwriting, facilitating mergers and acquisitions or brokerage services for institutions. The work of an investment bank begins right from the counseling before the underwriting sessions, and stretches right till the securities are properly handled and distributed. Investment banks play a very crucial role in market transactions on behalf of, or for private and public investors, government and corporations. There are a number of investment banks that also provide highly professional services in assisting their clients with industrial know-how on various parameters. Industries from diverse sectors like media and telecommunications, real estate, industry, finance, health care, consumer products and various such segments are provided assistance by investment banking services. Along with these, an investment bank also deals in the securities, trading services, credit counseling, financial engineering and merchant banking. The primary source of income for investment bankers is the commissions, fees and gain margins on transactions provided for the above mentioned institutions. The role of an investment bank as a mediator is to directly familiarize the nature of the investment and the entity being invested in. In case of conventional banking, people deposit finances in the form of cash, assets and so on with a bank. The bank in turn can lend to a borrower under some standard norms to utilize in his own way. In the case of investment banking, there is a direct familiarization of both the investor and the borrower. This means that an individual or institutional investor has an option to choose his type of investment or division of investment into any given entity looking out for funds. An investment bank can also assist investment in the financial market. Investment banks provide companies with expert guidance and formulate strategies on their behalf for disinvestment, and also to merge or acquire new entities. Good investment banking involves procedures to maintain and upgrade the quality of services and keep a close watch on the emerging trends in the market, where their customer's money can be invested. It

    also incorporates risk management services in order to streamline the flow of capital, check its overuse, and come up with a detailed analysis of credit risks. The investment banking market was increasing leaps and bounds, until the present recession struck. Banks all over the world are trying to recoup the losses. The US is the biggest market for investment banks, followed by Europe, Middle East, Africa and Asia. The global hubs of investment banking are a few economically sound centers like London, New York and Tokyo. However, investment banking is not restricted in its scope to a few regions of the world. It caters to a global community which makes it highly sensitive to global ups and downs, along with innovative fluctuations.

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