Showing posts with label Investment Banking. Show all posts
Showing posts with label Investment Banking. Show all posts

Tuesday, May 15, 2012

Depository Bank Services

Depository Bank Services

Depository Bank Services

Authors

Depositary Receipts Services at Deutsche Bank

 

As one of the world’s leading Depositary Banks, Deutsche Bank delivers a comprehensive service covering all aspects of administration, whether for American

or Global Depositary Receipts. The core services include:

 

- Custody of the issuer’s domestic shares in the local market

- Issuance of the Depositary Receipts

- Receipt of dividend payments from the company, conversion to the currency

of the Depositary Receipts (usually US$), and distribution to the investors

- Registrar services for the Depositary Receipts

- Transmission of shareholder information to the Depositary Receipt holders,

including proxy forms, annual reports and other corporate action materials

- Issuer reporting, providing information to the company on the activity of its

Depositary Receipt programme

- Cancellation of Depositary Receipts and release of the underlying shares to

the investor or his broker for sale in the company’s domestic market

 

 

 

Services – Additional  Features

 

 

Deutsche Bank offers  some more operational services. They offer to act as a vital intermediary between the issuing company and its investors in terms of process management and information flow, ensuring that the programme is properly established to minimise the administrative burden to the issuing company, comply with market regulations and ensure investors receive the most efficient service possible.

 

They  have a wealth of experience in establishing Depositary Receipt programmes, with specialists in London, New York and Hong Kong providing local knowledge and expertise across different time zones. A dedicated relationship management team offers clients a single point of contact for all programme-related issues. And, through their  proprietary Depositary Receipt website, they offer to deliver a range of information both to issuers and the wider market.

 

Broker sales desks in London, New York and Hong Kong deliver a highly professional service to brokers and investors globally, ensuring that the process of transferring between Depositary Receipts and domestic shares is efficient and timely. The bank’s same-day issuance capability ensures that shareholders receive the best, most cost-effective service in the market. Additionally, Deutsche Bank’s broker sales teams support the programme by providing specialist information to our extensive international database of relevant industry contacts.

 

One of the value-added services they  offer to  clients is investor relations guidance. They offer to  provide  issuers with regular shareholder analysis and market perception studies and  create a tailored investor relations programme which incorporates specific client requirements and targets the key investor and broker markets as appropriate.

 

In addition to the quality, experience and expertise of our staff, they promise to build in flexibility and innovation to the service. For those clients who prefer a multiple listing of their domestic shares rather than a DR programme, for instance, they provide Global Registered Share, a specialist product pioneered by Deutsche Bank, the first bank to have set up global share issues for its clients. And as the only Depositary Bank with a major European and US presence, they offer a unique combination of capabilities for companies wishing to arrange a dual listing of their DRs on the Neuer Markt and a US stock exchange.

 

Bank’s role as a Depositary Bank is wholly independent of the lead manager, investment bank or arranger of any Depositary Receipt programme.
 
 

 

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Narayana Rao - 10 Nov 2011
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Monday, May 14, 2012

Private Equity Investors and Managers - International Players

Private Equity Investors and Managers - International Players

Private Equity Investors and Managers - International Players

Authors

 

Goldman Sachs Private Equity Group

 
Goldman Sachs Private Equity Group (PEG) is a leading investor in private equity funds, is a significant co-investor in direct investments, and is an active provider of liquidity and portfolio management solutions to existing private equity investors. PEG's comprehensive global private equity program seeks to construct a diversified private equity portfolio and considers each potential investment's strategy, geographic focus, competitive advantages, and return profiles, including how a particular opportunity may affect the portfolio's volatility and risk.

Based in New York, London, Tokyo, Hong Kong and San Francisco, the Private Equity Group consists of over 85 professionals. PEG casts a wide net in an effort to identify the best private equity fund managers in the world. PEG primarily makes commitments to private equity funds located in the United States, the United Kingdom, continental Europe, Latin America and Asia with strategies that include leveraged buyouts, growth financings, natural resources, venture capital and distressed securities.
 
PEG maintains an open-door policy with respect to potential investments, and welcomes information regarding prospective private equity fund offerings and secondary investment opportunities.

Private equity managers can contact the Private Equity Group at peg@gs.com.
 

Merrill Lynch global Private Equity (MLGPE)

 

The group’s objective is to generate long-term capital gains, with a primary focus on control-oriented investments in equity, equity-related and similar securities with equity-like returns. Investments typically range in size from $250 million to $750 million, with the flexibility to commit to larger or smaller investments.

 

A dedicated team of 70 investment professionals, located “on the ground” in seven countries around the world, is comprised of professionals with complementary backgrounds including private equity, mergers and acquisitions, leveraged finance and corporate restructuring. The team has benefited from substantial continuity, with a core team that has been successfully investing together since 1996.

 

MLGPE makes investments globally, with a primary emphasis on the world’s largest economies, including the United States, Europe, Japan, China, India, Latin America and Australia, taking a multi-sector approach to identifying attractive investment opportunities. Investment targets are high quality established companies that are recognized brands with industry or regional leadership, defensible market positions, strong cash flow characteristics, and seasoned management, combining comprehensive regional and industry-based in-depth analyses with global approval and management processes.
 

Global Contacts - MLGPE

 Nathan (Nate) C. Thorne
President/Group Head
+1-212-449-8316
Nate_Thorne@ml.com

 Mandakini (Mandy) Puri
Chief Investment Officer
+1-212-449-9624
Mandy_Puri@ml.com

 

Citi Private Equity ("CPE")

 

Citi Private Equity ("CPE") manages private equity fund commitments, non-control direct private equity investments and mezzanine debt investments on behalf of Citi's proprietary accounts and third party clients. CPE is a direct beneficiary of Citi's long history in private equity both as a direct investor and as a limited partner in third party funds dating back to the 1960s. Over time and through many market cycles, Citi has built a deep private equity network. Citi's unrivaled global presence with offices in over 100 countries and the vast resources of a diversified financial organization help create far-reaching insight on market conditions and emerging opportunities.

 

CPE's experienced investment professionals are based in New York and London and oversee more than 300 limited partnership investments in private equity and over 75 direct investments. With diverse backgrounds in areas such as capital markets, leveraged finance, financial sponsor coverage and mergers and acquisitions, the members of CPE's investment team are afforded a broad perspective on private equity. The programs created for our clients focus exclusively on identifying and investing with leading private equity firms across all geographies and investment styles and sizes that have demonstrated an ability to generate attractive returns in their areas of specialty, including leveraged buyouts, venture capital, mezzanine debt, distressed debt and direct equity co-investing.

 

CPE utilizes a distinct business model in which all investment professionals are active in both fund investing and direct equity co-investing alongside CPE's fund partners. CPE's direct equity co-investing and mezzanine orientation allows it to deepen relationships and investment perspectives and to conduct on-going due diligence of its portfolio managers. This "first-hand" view of each private equity fund is critical to re-investment decisions as a limited partner. In addition, Citi's investment relationships often provide a favored position in terms of access when oversubscribed private equity firms raise new funds.

Sales team contact:
 
Douglas M. Blagdon
Managing Director - Head of Citi Alternatives Distribution Group
388 Greenwich Street, 33rd Floor
New York, NY 10013
Phone: 212-816-0858
Email: Douglas M. Blagdon

 
 
Goldman Sachs
 
Merrill Lynch
 
Citigroup
 
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Foreign Bond Issues in Japan

Foreign Bond Issues in Japan

Foreign Bond Issues in Japan

Authors

Japan opened its capital market for foreign bond issues in the eighties.
 
The public  bond issue by foreign issuers is known as Samurai Bond issue.
 
The privately placed foreign bonds are known as Shobosai Bonds.
 
 
In the first half  of 2008, $13.5 billion in Samurai bonds were issued. It is the highest first-half volume on record,  as per the data of Thomson Reuters[1].
 
Japanese institutions have come through the global credit crisis largely unscathed, leaving them with cash to buy bonds issued in Japan by foreign entities as Samurai bonds.
 
 
 
 

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Narayana Rao - 03 Apr 2011
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Global Depository Receipt

Global Depository Receipt

Global Depository Receipt

Authors

Global depository receipt is a depository receipt which is issued as a single instrument to public in other countries but in USA, it is privately placed under Rule 144A.
 
The first GDR issue is an issue made by Samsung Co. Ltd. (South Korea) in December 1990.


http://www.investopedia.com/terms/g/gdr.asp

A Primer on GDRS from Citibank
https://wwss.citissb.com/adr/common/file.aspx?idf=1525

Reviewed on 3.3.2011
Posted by at 8:59 PM 0 comments
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American Depository Receipts

American Depository Receipts

American Depository Receipts

Authors

A depository receipt is a security that represents ownership in a foreign security.
 
They provide opportunity for investors in a country to trade or transact on their domestic stock exchanges a security whose underlying is a foreign security. They have the benefit of trading the instrument through their familiar broker in the same way they trade their country's securities.
 
The concept of depository receipts has existed in US capital market or securities market since 1927. 
 
A Depositary Receipt is a negotiable U.S. security that generally represents a company's publicly traded equity or debt. Depositary Receipts are created when a stock broker purchases a non-U.S. company's shares on its home stock market and delivers the shares to the depositary's local custodian bank, and then instructs a depositary bank to issue Depositary Receipts.
 
The  Depositary Receipts, being negotiable instruments,  may  be traded in the  secondary trading market. They may trade freely, just like any other security, either on an exchange or in the over-the-counter market.
 
 
Till mid-eighties, depository banks issued them without the consent and involvement of the concerned issuers of securities. When issuers are involved, depository issues can be used for raising additional capital by the issuer.
 

Regulation

 
But in 1983, the Securities Exchange Commission made certain disclosure requirements mandatory for ADR issues.
 
 

Benefits to a Company

The establishment of a Depositary Receipt program offers numerous advantages to non-U.S.companies. The primary reasons to establish a Depositary Receipt program can be divided into two broad considerations: capital and commercial.
Advantages may include:

  • Expanded market share through broadened and more diversified investor exposure with potentially greater liquidity, which may increase or stabilize the share price.
  • Enhanced visibility and image for the company's products, services and financial instruments in a marketplace outside its home country.
  • Flexible mechanism for raising capital and a vehicle or currency for mergers and acquisitions.
  • Enables employees of U.S. subsidiaries of non-U.S. companies to invest more easily in the parent company.

Benefits to an Investor

Increasingly, investors aim to diversify their portfolios internationally. However, obstacles such as undependable settlements, costly currency conversions, unreliable custody services, poor information flow, unfamiliar market practices, confusing tax conventions and internal investment policy may discourage institutions and private investors from venturing outside their local market. Depositary Receipt advantages may include:

  • Quotation in U.S. dollars and payment of dividends or interest in U.S. dollars.
  • Diversification without many of the obstacles that mutual funds, pension funds and other institutions may have in purchasing and holding securities outside of their local market.
  • Elimination of global custodian safekeeping charges, potentially saving Depositary Receipt investors up to 10 to 40 basis points annually.
  • Familiar trade, clearance and settlement procedures.
  • Competitive U.S. dollar/foreign exchange rate conversions for dividends and other cash distributions.
  • Ability to acquire the underlying securities directly upon cancellation.

 

Types of Depository Receipts

 
Depositary Receipts may be more specifically called American Depositary Receipts (ADRs), Rule 144A Depositary Receipts or Global Depositary Receipts (GDRs). These names typically identify the market in which the Depositary Receipts are available: ADRs are publicly available to U.S. investors on a national stock exchange or in the over-the-counter market; Rule 144A ADRs are privately placed and resold only to Qualified Institutional Buyers (QIBs) in the U.S. QIB PORTAL market; and GDRs are generally available in one or more markets outside the foreign company's home country and in USA through Rule 144A ADRs.
 
Sponsored Level I Depositary Receipts 

 Level I Depositary Receipts are traded in the U.S. over-the-counter (OTC) market with prices published in the Pink Sheets.  Establishment of a Level I program does not require full SEC registration and the company does not have to report its accounts under U.S. Generally Accepted Accounting Principles (GAAP) or provide full Securities and Exchange Commission (SEC) disclosure. Essentially, a Sponsored Level I Depositary Receipt program allows companies to enjoy the benefits of a publicly traded security in USA without changing its current reporting process.

The Sponsored Level I Depositary Receipt market is the fastest-growing segment of the Depositary Receipt business. The majority of sponsored programs are Level I facilities.  Many well-known multinational companies have established such programs.

Sponsored Level II and Sponsored Level III Depositary Receipts

Companies that wish to list their Depositary Receipts on a U.S. stock exchange (NASDAQ, American or New York), raise capital, use Sponsored Level II or Sponsored Level III Depositary Receipts. Level II and Level III Depositary Receipt programs require SEC registration and adherence to applicable requirements for U.S. GAAP. Level II Depositary Receipts are exchange-listed securities but do not involve raising new capital. Level III programs typically generate the most U.S. investor interest because capital is being raised. .

Privately Placed and Offshore (SEC Rule 144A / Regulation S) Depositary Receipts

In addition to the three levels of sponsored Depositary Receipt programs that trade publicly in the U.S., a company can also access the U.S. and other capital markets through SEC Rule 144A and/or SEC Regulation S Depositary Receipt facilities without SEC registration. Rule 144A programs provide for raising capital through the private placement of Depositary Receipts with large institutional investors (often referred to as QIBs) in the United States.
 
Regulation S programs provide for raising capital through the placement of Depositary Receipts offshore to non-U.S. investors in reliance on Regulation S.
 
A Level I program can be established in addition to a Rule 144A
 
 

References

 
 
Posted by at 8:48 PM 0 comments
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Initial Public Offer Decision (IPO)

Initial Public Offer Decision (IPO)

Initial Public Offer Decision (IPO)

Authors

The decision has strategic dimensions
 

Strategic Dimension

 
The company has to choose between remaining private and going public and becoming a listed company.
 
The company has the choice of remaining private if there are no compelling reasons to go public. If the business can be built on equity sourced from limited number of persons with private wealth and debt sourced from banks and public.
 
In a business sense, a publicly listed and traded company has better visibility and corporate image. Listed companies have better corporate governance standards and hence attract better valuations and human resources.
 
There is scope for raising large amounts of equity if the company performs up to expectations of the market and the company management has growth plans.
 
Some managements find it easier to persuade large number of small public shareholders to support their decisions in contrast to large strategic shareholders.
 
Sometimes, the company is compelled to go public to provide liquidity window to one of its large shareholders who wants to exit.


Why IPO?
Instanbul Stock Exchange
http://www.ise.org/initialpublicoffering/IPOs/IPO_StockMarket/IPODecision.aspx

Model of Optimal IPO decision making
http://finance.wharton.upenn.edu/~luket/taylor_pastor_veronesi_2008.pdf

Reviewed 3.3.2011

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Thursday, April 26, 2012

Valuation of Knol - Google's Wiki Article Platform

Valuation of Knol - Google's Wiki Article Platform

Valuation of Knol - Google's Wiki Article Platform

Yahoo's Acquisition of Associated Content - Implications for Knol - Prospects and Valuation

Estimates say Valuation of associated content was done at $100 million. Can Knol's value be $30 million now?

Authors


August 2011

Now Knols value is $30 million

Estimate for Knol's unique visitors is 5 million. At $6 per unique monthly visitor Knol's value is $30 million now.
 
For estimate of unique monthly visitors for Knol  Google Knol - Its Progress.



__________________________________________________________________________________
Yahoo acquired Associated Content.com. The estimate is that it paid $100 million for it [1]. Many people are worried about the future of knol project. Is this announcement a positive or negative for the knol project of Google.

According to me this is a positive development. There is a valuation benchmark now for the sponsors of knol to ask for adequate funds to grow knol.

Valuation of Google Knol


Shall we start with a trial figure of $10 million? Let us see how we can justify it. And we can add or subtract based on views of readers also.

Associated content has 380,000 users who upload articles, photos and videos [1].
Somebody commented that Yahoo paid 15X of revenue.  There are no estimates available of revenues of knol so far.
There is a comment that six dollars a head referring to the 16 million unique visitors that Associate content is getting every month [3]. There is an interesting observation.
Google ads will not appear in Associated content. Will it lead to some fall in rankings for contents of AC. I do not know.
There are some estimates that say Knol has around 500,000 unique visitors per month. May be in the next few days many people will speculate on knol and we will have more authentic information.
 
Six dollars per unique visitor valuation metric will give $3 million as value to Google knol.
 
But $100 million valuation of associated content cannot be scaled down $3 million like that. The reasons are:
 
Cost of the Platform
 
1. The investment made by Google in knol so far. The cost involved in setting up the infratructure needs to be taken into consideration in valuation.
 
Trusted Brand in IT Services
 
2. Google brand name. Google is a trusted brand name. Even in a mass market activiity like blogging and knolling or even youtube, Google puts in effort to set up best technical infrastructure in both hardward and software areas and also in compliance.
 
Quality Premium
 
3. Quality: Knol is mass market product. But google positioned Knol as a quality product. The initial articles were by reputed doctors and surgeons. That positions knol as a platform for people with specialist knowledge. On Knol, many research papers are published by various academic researchers and professional researchers. Many professors are writing on knol. Details can be looked for in  Specialist Knol Authors with High Academic and Professional Achievements - Directory .
4. A very early project on knol is  Collabooks: The Collaborative Books Project . This project aims at creating online medical books on knol using collaborative writing facilities of Knol.
5. PLoS Currents: Influenza is  completely focused on research articles. It disseminates research in a rapid fashion and it is going great guns on knol platform. The index page which gives links to variuos knols is getting 2085 pv per week which is high in knol terms (Trending Knols ) 
6. Narayana Rao K.V.S.S. is the Global Number One Individual English Knol Author. His major focus in on subjects in management and industrial engineering. His definition for industrial engineering first published on knol only ( "Industrial Engineering is Human Effort Engineering and System Efficiency Engineeering."   Industrial Engineering) is quoted in the magazine "Industrial Engineer", the top magazine for Industrial Engineering in world.
7. Search Based Access: Knol is an open platform. Anybody can publish content. But knol has a system in place to bury the low quality content as it is based on search based access. It has created urls in such a way that visitors and readers are forced to use a search engine to access articles and search engine always shows only quality articles. One can be surprised even when the actual title of an article is given, knol search engine will not show the article and will show many other articles, if the concerned article is a low quality article. Knol has that system of allowing people to post freely but making visible only quality articles.
8. Open online journals are being announced by various organizations on knol. IMedPub is organzing an open online journal.
9. Faculty are encouraging students to post their term papers on knol and using them for peer evaluation.
10. Course pages are being posted on knol providing access to course materials of top institutes to many other institutes in the country as well as the world.
11. Facility to embed Youtube videos is enhancing course pages as relevant videos can be provided to students and access and learning.
12. Knol is basically positioned as a serious learning platform.
 
 
Option Value
 
Knol has a lot of option value built into it.

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Value of Knol is $2.88 Billion


Says Scoreinthebox  com
(Visit http://www.scoreinthebox.com/knol.google.com    ) accessed at 7.40 pm. 22.5.2010 (Indian Standard Time)


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Comparison Between Google Knol and Associated Content

Alberto Auné
20th May 12.04 a.m.

Associated Content:

It is a website with articles on many topics, often related.
Many of them are about the same topic with different points of view.
The topics are Arts & Entertainment, Automotive, Business & Finance, Health & Wellness, Home Improvement, Lifestyle, News, Society, Sports, Technology and Travel, all popular topics.
This means interest and issues on which there is advertising. Advertising is AdSense of Google.
The company pays the authors per visit and not per click.
If an author has 10,000 visits receives money from 10,000 visits.
It is a community, a blog and a newsletter.
It pays only U.s. residents.
The company answers immediately to users who ask questions.
It has a FAQ with the most common questions asked.
It has a tutorial.
The users can publish photos, audio, text and video.
Today (May 19, 2010) is 2.13458 million contributions from users.

Yahoo pays the prize because knows that advertising is profitable because it is directed.

Google Knol

It will be in July two years of existence.
Knol publishes articles (knols) about popular, educational, scientific and cultural themes without limit of subject.
The knols can be modified without time limit.
There are high quality knols that may have fewer visits than those of lower quality with more visits.
Knol pays some users, not all, with AdSense.
There is then knols that do not produce profit through advertising.
Advertising pays only clicks on advertising.
Knol dont answers immediately to users.
His service for users (Google Knol) does not publish knols a long time.
No FAQ section. There are volunteers who answer questions from users but there is no immediate response from google.
The users can publish photos, audio, text and video.
It does not report the number of users or publications. Then, we don't know how many users and knols there are.
Knol does not have an official community.
Also does not publish newsletters and does not encourage to do communities.

Therefore:

Yahoo buys Associated Content knowing the profit that may have.
Popular topics have many views that generate publicity.
That is business.

A knol is a unit of knowledge and not necessarily a popular topic.
Not all knols have advertising.
In knols were there is advertising not all users clic in them.
A knol can have 10,000 visits and little or no click.
Knol privileges knowledge to make money.

Thus Associated Content has a higher price that Knol because it is a bigger business.

I think Yahoo will remove ads from AdSense and will publish his ads.

Alberto Auné
Alberto Auné




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References

4. http://www.newsfactor.com/story.xhtml?story_id=10300004I5UX

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Related Knols

 
Share/Bookmark

Comments

Short urls

http://knol.google.com/k/-/-/2utb2lsm2k7a/2515

Narayana Rao - 28 Aug 2011

This Knol is being tweeted

I found that some knol visitor tweeted this knol. Has he used our social media button?

Narayana Rao - 22 May 2010

Yes I am really happy. I am seeing many more tweets about knol now and I am following every person who is mentioning knol in his tweet. I keep searching "knol" on twitter to find tweets on knol.

It is great if we are instrumental in increasing tweets regarding knol. I am thanking also all authors who are mentioning knol if I am seeing their name for the first time.

Narayana Rao - 22 May 2010

yes it looks like, our efforts are being fruitful and few are responding to it
good going raogaaru
philip

P V Ariel - 22 May 2010

Yahoo AC an Interesting Interview

I Just come across an intersting and informative interview done with AC's founder President Luke Beatty, by Sabha Karim an AC contributor since its inception, A well done interview. I posted a comment there on the plight of Asians and the Non-US contributors.
Here is the link. http://theacweekly.wordpress.com/2010/05/21/exclusive-interview-acs-founder-luke-beatty-talks-about-the-yahoo-partnership/
regds
philip

P V Ariel - 22 May 2010

Knol was Started on 19.5.2010

Started at 10 p.m. of 19.5.2010 (IST)

Narayana Rao - 20 May 2010

To think and talk...

Let’s consider the following:

Associated Content:

It is a website with articles on many topics, often related.
Many of them are about the same topic with different points of view.
The topics are Arts & Entertainment, Automotive, Business & Finance, Health & Wellness, Home Improvement, Lifestyle, News, Society, Sports, Technology and Travel, all popular topics.
This means interest and issues on which there is advertising. Advertising is AdSense of Google.
The company pays the authors per visit and not per click.
If an author has 10,000 visits receives money from 10,000 visits.
It is a community, a blog and a newsletter.
It pays only U.s. residents.
The company answers immediately to users who ask questions.
It has a FAQ with the most common questions asked.
It has a tutorial.
The users can publish photos, audio, text and video.
Today (May 19, 2010) is 2.13458 million contributions from users.

Yahoo pays the prize because knows that advertising is profitable because it is directed.

Google Knol

It will be in July two years of existence.
Knol publishes articles (knols) about popular, educational, scientific and cultural themes without limit of subject.
The knols can be modified without time limit.
There are high quality knols that may have fewer visits than those of lower quality with more visits.
Knol pays some users, not all, with AdSense.
There is then knols that do not produce profit through advertising.
Advertising pays only clicks on advertising.
Knol dont answers immediately to users.
His service for users (Google Knol) does not publish knols a long time.
No FAQ section. There are volunteers who answer questions from users but there is no immediate response from google.
The users can publish photos, audio, text and video.
It does not report the number of users or publications. Then, we don't know how many users and knols there are.
Knol does not have an official community.
Also does not publish newsletters and does not encourage to do communities.

Therefore:

Yahoo buys Associated Content knowing the profit that may have.
Popular topics have many views that generate publicity.
That is business.

A knol is a unit of knowledge and not necessarily a popular topic.
Not all knols have advertising.
In knols were there is advertising not all users clic in them.
A knol can have 10,000 visits and little or no click.
Knol privileges knowledge to make money.

Thus Associated Content has a higher price that Knol because it is a bigger business.

I think Yahoo will remove ads from AdSense and will publish his ads.


Alberto Auné


Alberto Auné - 19 May 2010

I am impressed by your comparison. I included the whole comment in the body. I think this is an interesting topic to knol authors. I request to publish a knol on this in Spanish also. Also I request you to keep an eye on developments in Google about knol. I think some new items on knol will come now.

Narayana Rao - 19 May 2010

A Good News to the Non-US Contributors

This is really a good news to the non-us contributors especially to the Asian content writers.
At present they are giving a good remuneration to the US based writers, as per the news if yahoo take over it will go globally. thats really a good news to the non-us contributors, but I doubt it won't be a positive one to the knol platform, but looks like it become a strong competitor to the knol than the wikie.

thanks raogaaru for initiating this new knol.
best regards
philip

P V Ariel - 19 May 2010
Posted by at 3:52 PM 0 comments
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Wednesday, April 18, 2012

Investment Banking - Securities Market - News - India

Important news regarding investment banking and securities markets in India.

India - Business and Economy Dailies


http://economictimes.indiatimes.com/

http://www.financialexpress.com/

___________________________________________________________________________________________

16.4.2011
India Growing Higher Than China - It Started
India growth in 2010 10.4%; China's growth 10.3%  IMF stats
 
 
26.1.2010
Rising Valuation and Rate Hike Fears Prompt Analysts to Reduce "Buy Recommendations on India Stocks 
 
(Economic Times, p.21)
As the country's stocks surpassed China, strategists are cutting buy recommendations on India.
 
 
 

IDR Issue of Stanchart cleared by RBI

 
12.10.2009
Conditions laid: Stanchart can raise a maximum 5% of its capital from a single IDR issuance. Cannot accept subscriptions from investors who borrow money and invest. No single entity can pick up moe than 5% in an IDR. The same guidelines may apply to IDR issues of other banks.
 
 
 
 

Issue of Capital and Disclosure Requirements - 2009 (ICDR-2009)

 
Detailed knols
 
 
 
26.9.2009

Issues of FCCBs

Sesa Goa raised $500 million (Rs.2,399 crore) through FCCBs.
Welspun gujarat Stahl Rohren raised $134 million (Rs. 634 crore) through FCCBs.(ET, 26.9.2009).
 

Dual Listing linked to Full Convertibility

 
Pranab Mukherjee, The Finance Minister of India said, dual listing is linked to full convertibility in the context of Bharti-MTN deal.
 
24.9.2009

A good blog on Securities Markets of India

 
An article on depository receipts
Depositary Receipts: Concept, Evolution and Recent Trends by Manoj Kumar, Faculty, IIM Lucknow.
2006
 
22.9.2009

Takeover norms revised; ADRs at par with domestic shares

The Securities and Exchange Board of India revised takeover norms by bringing ADRs/GDRs with voting rights on par with the domestic shares, which makes an open offer mandatory if 15 per cent stake is bought in a company through these securities.
 
 
Regarding Voting Rights of ADRS/GDRs RBI clarification
 
vii)  Voting rights on shares issued under the Scheme shall be as per the provisions of Companies Act, 1956 and in a manner in which restrictions on voting rights imposed on ADR/GDR issues shall be consistent with the Company Law provisions. Voting rights in the case of banking companies will continue to be in terms of the provisions of the Banking Regulation Act, 1949 and the instructions issued by the Reserve Bank from time to time, as applicable to all shareholders exercising voting rights.
 
 
21.9.2009

Relaxation of FII investment norms

SEBI is coming out with a concept paper that focuses on relaxations in FII investment norms. Individuals may have a direct access to the Indian Markets according to the proposals in the concept paper.
 
3.9.2009

Issue of Capital and Disclosure Regulations Issued by SEBI

 
SEBI Informal Guidance to Bharti Airtel Limited regarding issue of GDRs to MTN shareholders
 
 
18.6.2009
 

SEBI Board Meeting - Decisions

 
The Board met today and took the following decisions:
 
(i)     Listing of IPO on stock exchange with nationwide trading terminals
An unlisted company making an IPO shall list the securities on at least one stock exchange having nationwide trading terminals.  This would provide a liquid trading platform to investors in securities of the company.
 
(ii)    ‘Anchor Investor’ in public issues
An issuer making a public issue of shares through book building may allocate on a discretionary basis up to 30% of the QIB portion of the issue to anchor investors (AIs), who is a QIB. The minimum size of application by AIs would be Rs. 10 crore.  They would bring in a margin of 25% on application and the balance 75% within 2 days of the date of closure of the public issue. There will be a lock-in of 30 days on the shares allotted to these investors from the date of allotment. No person related to the promoter/promoter group/BRLMs can apply as anchor investor. This would bring more certainty to transactions.
 
 (iii)  Holding period for shares offered for sale
Under the current guidelines, a shareholder can make an offer for sale of the equity shares if he has held them for a period of at least one year. Board decided that in case equity shares which are received on conversion of fully paid compulsorily convertible securities, including depository receipts are being offered for sale, the holding period of such convertible securities as well as that of resultant equity shares together would be taken into account for the purpose of eligibility.
 
(iv)  Issue of shares with superior voting rights
No listed company can issue shares with superior voting rights. This will avoid the possible misuse by the persons in control to the detriment of public shareholders.
 
(v)   Rationalisation of disclosure norms for rights issues
Since rights issues are made to existing shareholders, who are in possession of basic information about the company and have been receiving reports regarding major developments in the company on a continuous basis, it has been decided to rationalize disclosures in rights issue offer document by doing away with or modifying existing disclosure requirements. Disclosures that have been done away with include summary of the industry and business of the issuer company, promise vs. performance with respect to earlier/ previous issues, ‘Management discussion and analysis’. The disclosures relating to financial statements, litigations, risk factors, etc. have been simplified. The revised set of disclosures would make the process of rights issues faster for companies and also reduce the overall cost of such issuances.
 
(vi) Transparency in payment of commission to Mutual Fund distributors
There shall be no entry load for the schemes, existing or new, of a Mutual Fund.  The upfront commission to distributors shall be paid by the investor to the distributor directly. The distributors shall disclose the commission, trail or otherwise, received by them for different schemes/ mutual funds which they are distributing or advising the investors.
 


Full Backing of Assets for Secured Debentures

28.5.2009
A week ago, the Securities and Exchange Board of India (SEBI) had decided that companies raising money through 'secured bonds' and debentures should make sure that the papers issued are fully backed by assets.

(Source: The Economic Times, 28.5.2009, page 1).

Knol Started


Knol started on 28.5.2009 to accumulate news related to investment banking in India and thus provide the status of investment banking sector in India. As the knol is kept on open collaboration, authors and visitors can share information they know.


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Tuesday, April 17, 2012

Private Investment in Public Equity (PIPE)

Introduction
 
In general a PIPE is defined as a private placement of equity or equity-linked securities by a public company to accredited investors that is followed by the registration of the resale of those securities with the Securities and Exchange Commission (the “SEC”).
 

PIPE is “reinventing” of the relationship between the public and private capital markets.  The normal relationship is private capital first and then public capital. But now an increasing number of public companies have turned to alternative forms of financing in which publicly traded companies access new capital through the sale of stock directly to a select group of private investors. 

 

Over the past few years, the use of PIPEs has dramatically increased, with PIPE transactions in 1999, 2000 and 2001 totaling close to $50 billion.

 

Many major private equity funds have entered the PIPE market.  

 

As the markets for PIPEs have improved, the public markets have learned to better interpret the financing vehicles and, as such, the universe of prospective investors has expanded. 

 

In general, an investment by a traditional private equity fund has come to signal:

 

(i) an indication that the company has improved its financial posture;

(ii) that smart investors are buying into the Company’s plan; and

(iii) reinforcement that the company is undervalued at the current stock price level. 

 

As a result of this interpretation, there is typically a favorable market reaction from the issuance of a PIPE.  For example, in a study performed by CSFB of more than 100 PIPE investments made by traditional private equity funds, concluded:

 

  • Average premium to the prior’s day close was 11.7%, 
  • Average premium to the trailing 15-day average was 10.4%,
  • Average 1-day stock price increase was 8.0%,
  • Average 30-day stock price increase was 12.2%
 

A business week article mentioned that, In recent weeks(October 2007), officials at Blackstone Group and the private equity arm of Goldman, Sachs & Co. (GS ) had said they see PIPEs as a lucrative opportunity. This statement sends the signal that PIPE is a significant alternative in private equity investment.

Investment Banks 

 

Rodman & Renshaw Capital Group, Inc (NASDAQ: RODM), today announced that its Rodman & Renshaw, LLC subsidiary has maintained its leading position in PIPE transaction deal volume for the first half of 2008, garnering the top spot in PlacementTracker's First Half 2008 PIPE Market League Tables, published by Sagient Research Systems. During the first half of 2008 Rodman completed 25 transactions raising a total of $404 million. Rodman was the number one ranked PIPE advisor by deal volume for all of 2007 as well.

 PlacementTracker is a flagship product of Sagient Research Systems and well recognized as the leading provider of research, data, and nalytics covering the PIPE market.

 
 

References

 
 
 
 
 
 
 
case study
 
 
Books
 

PIPES: The CEO's Guide to Successful Private Investments in Public Equities
by Harlan P. Kleiman, Ronald F. Richards,  Parachute Business Press

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Thursday, April 5, 2012

KKR Public Issue – An Interesting Purpose and Strategy

KKR is coming out with plans to go public in difficult environment. But its objective is not acquiring additional cash from the market or to sell partially or fully the holding of promoters. Its objective is to acquire its European affiliate, KKR Private Equity Investors, which trades in Amsterdam with its publicly floated stock.

 

It is an interesting strategy to acquire an undervalued asset.

Reference
 
"KKR plans to go public on NYSE," Mint, 29 July, 2008, P. 17
 
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Thursday, March 22, 2012

Investment Banking

Investment Banking  activity focuses on proving securities market related services to companies. Primary issue of securities is an important segment of investment banking. Block purchase and sale of securities on behalf companies is another important segment. Mergers and acquisitions fall under this category. Both primary issue as well as block transactions of secondary market sales involve siginficant advisory and consultancy components. Hence advisory and consultancy services are also an important segment of investment banking.
 
Goldman Sachs, Merrill Lynch, Morgan Stanley etc. are very well known investment banks. Presently investment banking industry is in turmoil as security investments in mortgage securities have resulted in huge losses and the consequent collapse in the economic system has reduced primary market issues and secondary market transactions.
 
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Knols
 
 
 
 
 
 
 
 
 
 
 
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Courses
 
MBAs are preferred persons for investment banking jobs as they combine analysis, management and marketing fields.
 
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Saturday, March 10, 2012

Merchant banking and Investment Banking - Business Concept and Regulation

At a very macro level, ‘Investment Banking’ as the term suggests, is concerned with the primary function of assisting the securities 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)[1].

Banking & financial institutions and securities markets are the two broad platforms of institutional intermediation for capital flows in the economy. Investment banks are the counterparts of banks in financial markets in the function of intermediation in resource allocation.

The term ‘investment banking’ is of American origin. Their counterparts in UK were termed as ‘merchant banks’ and they had confined themselves to security market intermediation whereas American investment banks undertook both fund-based and advisory roles. American investment banks entered the UK and European markets and extended the scope of merchant banking to investment banking.




Responsibility of Merchant Banker: Merchant banking is not merely about marketing of securities in an agency capability. The regulatory authorities require the merchant banking firms to promote quality issues, maintain integrity and ensure compliance with the law on own account and on behalf of the issuers as well.


Heart of investment banking consists of advising corporations on how best to configure their balance sheets – wit the aim of maximizing shareholder value and executing the transactions that flow from that advice [2].


The title “investment banker” is usually reserved for those individuals within an investment banking firm who are responsible for the firm’s relationship with the issuer, as opposed to the investor clients, i.e., with clients who engage investment banks to issue new securities, restructuring existing liabilities; either increasing or decreasing leverage, moving from public to private ownership.


Business Portfolio of Investment Banks


Globally, investment banks handle significant fund-based business of their own in the capital market along with their non-fund service portfolio which is offered to clients. However, various services or segments of services are handled either on the same balance sheet or through subsidiaries and affiliates depending upon the regulatory requirements in the operating environments of each country. All these activities are segmented across three broad platforms-equity market activity, debt market activity, and mergers and acquisitions (M&A) activity.


Investment banking


Core business portfolio


Fund based


Equity: Underwriting, market making
Debt: Underwriting, market making
M & A: Investing in private equity, LBOs and MBOs




Non-fund based


Equity: Merchant banking (Public issue management), Private placement
Debt: Public issue management, Private placement, Securitization for finance companies and banks
M&A: M&A advisory, Corporate Advisory, Project Advisory


Support business portfolio


Fund based


Equity: Proprietary trading and portfolio investing, private equity funds and asset management funds
Debt: Proprietary trading and investing, asset management funds
Derivatives: Proprietary trading, hedge fund investments


Non-fund based


Equity: Equity broking, distribution, asset management, custodial services, wealth management (private banking), research and analysis.
Debt: Debt market broking, distribution, asset management, research
Derivatives: Derivative broking, risk management services, custodial services




References


1. Pratap Subramanyan, Investment Banking, Tata McGraw-Hill Pub., New Delhi, 2005
2. Kenneth C. Froewiss, "Investment Banking," Chapter A2 in Handbook of Modern Finance, Edited by Dennis Logue and James K. Seward, Warren Gorham and Lamont, 2007
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Thursday, March 8, 2012

Private Equity - Placement Process


Characteristics of Private Equity (PE)



• PE investors generally seek companies that are perceived to enjoy high growth potential over the long-term, 
– because the target company is in industry with long-term, high-growth potential,
– because the target company is developing new products or services that when introduced are likely to garner a significant market share,
– because the target company is an active force in a rapidly consolidating industry, or
– because of any combination of these characteristics.


• With respect to the original shareholders, a private equity investment will often involve having to learn to manage the company with certain restrictions on decision making.
• Investors frequently request representation on the board of directors and rights to veto actions relative to certain key management and operating issues.
• In some cases, the investors will even seek direct participation in the day-to-day management of the company. Investors may also wish to provide technical assistance, technology or management services to the company.
• To take care of the illiquidity of shares, and in order for the investor to be able to realize an acceptable return on its investment, the investor will insist upon negotiating an acceptable exit strategy at the outset of the investment.
• Such strategies may include taking the company public (IPO), selling the company to a third party (trade sale), selling the shares back to the original shareholders (pursuant to a put provision in the agreements  of the private equity investment) or selling the shares to a third party.
   

Private Placement Process


Preparation of PPM


• Once the company has decided to seek private equity, the first step will be the preparation of a detailed business plan or private placement memorandum ("PPM") that describes the Company's business and operations, summarizes its business strategy, describes the relevant market, includes financial statements  and  detailed financial projections.

• The drafting of PPM should be a comprehensive but concise presentation. Investment banks take an active part in preparing PPM.

• Simultaneous with drafting of the PPM, investment bank usually develops a detailed contact plan based on  a selective premarketing process. The heart of the plan consists of a list of potential "lead" and "follow-on" investors that may include venture capital investors, mezzanine funds, pension funds, insurance companies and high net worth individuals.

Due Diligence


• The due diligence review is essential to formulating a valuation by potential investors. It involves verifying the assets, liabilities and contractual obligations (including any existing or potential contingent liabilities) and financial condition of the company.

 In order to prepare for the due diligence to be carried out by interested Investors, the company, with advice from its legal counsel, will be responsible for selecting, organizing, and making available for review all relevant documents. In addition, the company will typically arrange for investors to meet at length with management and tour the company's facilities.

Term Sheet


• Typically, after a potential investor has performed  due diligence and has indicated a serious interest in making an investment, the parties will want to negotiate a term sheet or equivalent letter of intent which sets forth, in detail, the principal terms and conditions on which the investment will be made.

• Those terms and conditions will be influenced by the amount to be invested, the level of ownership the investment represents, the type of business the company operates, the company's financial situation, and the type of investment (development stage, strategic investment in an ongoing business, recapitalization, or troubled company turnaround).

• The single most important issue to be addressed in the term sheet is determining the value of the company.

• Other important issues relating to the financial terms of the investment, including the schedule on which capital is to be invested and the nature of the investment (convertible debt, debt with warrants, common stock, preferred stock, etc.), are resolved at this term sheet stage. In most cases, the term sheet also addresses issues relating to company governance and the relationship between the Investors and the original shareholders.

• The amount of negotiation on these issues and the extent of the detail included in the term sheet or letter of intent will influence, in an important fashion, the negotiation of the relevant agreements. To the extent the
parties are able to reach a detailed agreement at the term sheet stage concerning these issues, there will be a corresponding reduction in the amount of time required to negotiate the documentation of the investment.

• Typically, there is significant negotiation between the principals that occurs at the term sheet stage. Once the terms and conditions have been agreed to by all the parties, legal counsel will incorporate the terms into draft documentation.

Securities purchase agreement and Shareholders’ agreement


• This generally includes both a securities purchase agreement (containing the price, the nature and terms of the shares, the conditions to closing the investment, the representations of the parties and any indemnity obligations), and a shareholders' agreement, which regulates all aspects of the relationship among the company's shareholders, including the resolution of any controversies that may arise among the parties.

• Therefore, because of the pivotal role it plays in the success of the investment, the shareholders' agreement should be drafted in such a way so as to protect all shareholders, represent their interests, and anticipate any kind of controversy by providing an adequate mechanism for its resolution.

• It will be the lawyers' responsibility to produce documents that set forth, in a clear manner, all the terms and conditions negotiated by the parties and provide a workable arrangement for the management of the company.



References


http://www.replicon.fi/documents/PrivatePlacementProcess.pdf

Note on PPM
http://mba.tuck.dartmouth.edu/pecenter/research/pdfs/Private_placement_memo.pdf

Private Placement Memorandum And Regulation D
http://vcexperts.com/vce/library/encyclopedia/documents_view.asp?document_id=89

http://www.pwchk.com/home/eng/ipo_gcmg_private_placement.html


http://www.ppmpro.com/
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