II.

CAPITAL MARKET

1 2 3 4
Govt. Dated Industrial Development Finance Institutions Financial
Securities Securities Market (DFIs) Intermediaries
Market

 IPO (for new  All India Financial Institutions  Investment Banks

stocks) i.e. IFCI, IIBI, etc..  Merchant Banks
 Stock  Sectoral Finance/Refinance  Mutual Funds
Exchanges Institutions like SIDBI, NHB,  Leasing Companies
(for old IIFCL, REC, PFC, IRFC, TFCI etc…  Venture Capital
Though, Technically it is stocks)  State Finance Corporations
part of Capital Market, but
this Market along with
Treasury Bills & Cash
Management Bills is called
“ Govt. Securities Market”
and regulated By RBI.
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs SIDBI
 It is Small Industries Development Bank of
GENERAL SECTORAL India.
IFCI NABARD  Established in 1990 as a fully owned subsidiary
ICICI SIDBI
NHB
of IDBI, but the present shareholding is
IDBI
REC
IIBI diversified.
PFC

NSIC  Headquarters in Lucknow.

IRFC
EXIM BAK
 It is the principal financial institution for
ECGC
Promotion, Financing, Development of MSME
TFCI

MUDRA Sector.
BANK
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs
REC
 It is Rural Electrification Corporation Ltd.
GENERAL SECTORAL
NABARD
 It is Navratna CPSE.
IFCI

ICICI SIDBI  Established in 1969.

IDBI NHB

IIBI REC  Headquarters .. New Delhi.

PFC
 It issues Tax Free Bonds to collect funds at lesser interest.
NSIC

IRFC  Finance and promote Rural Electrification Projects across

EXIM BAK

ECGC the Country.

TFCI

MUDRA
BANK
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs
PFC
GENERAL SECTORAL  It is Power Finance Corporation Limited.
IFCI NABARD
 It is Navratna CPSE.
ICICI SIDBI

IDBI NHB  Established in 1986 with headquarters in New Delhi.

IIBI REC
PFC
 Mobilization of funds through taxable (mostly)/ non
NSIC
taxable bonds, term loans from FIs.
IRFC
EXIM BAK  They finance power generation projects.
ECGC

TFCI

MUDRA
BANK
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs
NSIC
 It is National Small Industries Corporation.
GENERAL SECTORAL
NABARD
 Headquarters in New Delhi.
IFCI

ICICI SIDBI  Established in 1955 as CPSE.

IDBI NHB

IIBI REC  It facilitates the growth of MSMEs.

PFC

NSIC
 It is promoting, aiding and fostering growth
IRFC of small industries by modernization,
EXIM BAK

ECGC upgradation of technology, strengthening

TFCI

MUDRA
linkages etc.
BANK
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs

IRFC
GENERAL SECTORAL  It is Indian Railway Finance Corporation.
IFCI NABARD

SIDBI
 It is the financing arm of Ministry of Railways.
ICICI

IDBI NHB
 Headquarters in New Delhi.
IIBI REC
PFC  To tap funds through Tax-free bonds/ Foreign
NSIC
currency loans etc.
IRFC
EXIM BAK
 To finance Indian Railways to purchase wagons /
ECGC

TFCI locomotives or other assets.

MUDRA
BANK
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs

EXIM BANK
GENERAL SECTORAL
 It is Export-Import Bank of India.
IFCI NABARD

ICICI SIDBI  Established in 1982 under the Export-Import

IDBI NHB

REC
Bank of India Act 1981 by GOI.
IIBI
PFC
 Headquarters is in Mumbai.
NSIC

IRFC  Set up for the purpose of Financing,

EXIM BAK

ECGC
Facilitating, Promoting Foreign Trade of India.
TFCI

MUDRA
BANK
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs
ECGC
 It is Export Credit Guarantee Corporation of India
GENERAL SECTORAL
Ltd.
IFCI NABARD  Based on the T. C. Kapur Committee
ICICI SIDBI
recommendations, Export Risk Insurance
NHB
IDBI Corporation was established in 1957 with
REC
IIBI
Headquarters in Mumbai.
PFC

NSIC
 Name changed to Export Credit & Guarantee
IRFC
Corporation Ltd. In 1964.
EXIM BAK  Renamed as Export Credit Guarantee Corporation of
ECGC India Ltd in 1983.
TFCI  Primarily for insurance against export credit risks and
MUDRA
BANK
trade related services.
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs

TFCI
GENERAL SECTORAL
IFCI NABARD  It is Tourism Finance Corporation of India Ltd.
ICICI SIDBI
 Established on the recommendations of National
IDBI NHB

IIBI REC Committee on Tourism (Yunus Committee).

PFC

NSIC
 Started functioning from 1989.
IRFC
 Provides Financial Assistance to Enterprises of
EXIM BAK

ECGC Tourism related Projects.

TFCI

MUDRA
BANK
 3. DEVELOPMENT FINANCE INSTITUTIONS (DFIs)

DFIs

MUDRA BANK
GENERAL SECTORAL  It is Micro Units Development & Refinance
IFCI NABARD
Agency (MUDRA) Bank.
ICICI SIDBI  This will be responsible for developing and
IDBI NHB refinancing of Micro and Small Enterprises.
IIBI REC  The bank will partner with various
PFC Commercial Banks / MFIs / FIs to Finance
NSIC Micro & Small Enterprises.
IRFC
 It is refinance agency.
EXIM BAK
 Headquarters in Mumbai.
ECGC
 At present it is NBFC and is the subsidiary of
TFCI

MUDRA
SIDBI.
BANK
 II. CAPITAL MARKET

1 2 3 4
Govt. Dated Industrial Development Finance Institutions Financial
Securities Securities Market (DFIs) Intermediaries
Market

 IPO (for new  All India Financial Institutions  Investment Banks

stocks) i.e. IFCI, IIBI, etc..  Merchant Banks
 Stock  Sectoral Finance/Refinance  Mutual Funds
Exchanges Institutions like SIDBI, NHB,  Leasing Companies
(for old IIFCL, REC, PFC, IRFC, TFCI etc…  Venture Capital
Though, Technically it is stocks)  State Finance Corporations
part of Capital Market, but
this Market along with
Treasury Bills & Cash
Management Bills is called
“ Govt. Securities Market”
and regulated By RBI.
 4. FINANCIAL INTERMEDIARIES
1. INVESTMENT BANKS Top 10 Investment Banks in the World
Main functions are
 Debt and Equity underwriting of corporates. NEW YORK

 Banking services to Companies, Financial NEW YORK

Institutions. NEW YORK

 Strategic advice w.r.t. M & As. CHARLOTTE, USA

 Portfolio Management of HNIs. FRANKFURT
(Germany)

NEW YORK
Top Investment Banks in India
ZURICH
(Switzerland)

LONDON
ZURICH
(Switzerland)
LONDON
 4. FINANCIAL INTERMEDIARIES
2. MERCHANT BANKS
(In United Kingdom, Investment Banks are known as Merchant Banks)

If one goes by theory, differences can be listed as follows…

INVESTMENT BANKS MERCHANT BANKS
 Services for large sized companies.  Services for medium sized companies
 Focus on IPOs.  Focus on placing equity in companies with growth
potential with other Financial Institutions.
 Involve in International Financial Activities.
 M&A of big companies.  Look at Foreign Corporate Investment and Foreign
 Portfolio Management of HNIs. Real Estate Investment

However, Investment Banks are familiar all over the World

 4. FINANCIAL INTERMEDIARIES
3. MUTUAL FUNDS
What is meant by Mutual Fund?

COMPANY X
PROFESSIONALLY
MANAGED COMPANY Y
FUND HOUSE
COMPANY Z
SMALL INVESTORS
MONEY IS POOLED UP
HERE

MUTUAL FUND
An investment vehicle made up of a pool of funds collected from many investors for
investing in Shares, Bonds, Money Market Instruments etc.
 4. FINANCIAL INTERMEDIARIES
4. LEASING COMPANIES

WHAT IS LEASE ?

Contract between two parties for hire of a specific asset when the
Lessor retains the ownership, while the Lessee has possession and use of asset
on payment of specified rentals over a period of time.

SOME LEASING COMPANIES IN INDIA

 First Leasing Company of India Ltd.

 Sundaram Finance
 Bajaj Finance
 M & M Financial
 4. FINANCIAL INTERMEDIARIES
5. VENTURE CAPITAL

WHAT IS VENTURE CAPITAL?

Money provided by investors to start-up firms and small
businesses with perceived long-term growth potential.

SOME OF VENTURE CAPITAL FIRMS IN INDIA

 IFCI Venture Capital Funds
 India Innovation Investors
 Reliance Venture
 Sequoia Capital
 Trident Capital
 General Atlantic
 Canaan Partners