Private Placement, Rights Issue & Investment Banking

PRIVATE PLACEMENT or NON-PUBLIC OFFERING

What is Private Placement?

Private placement (or non-public offering) is a funding round of securities which are sold
without an initial public offering, usually to a small number of chosen private investors.

Private placements consist of,

• stocks
• shares of common stock or preferred stock or other forms of membership interests
warrants or promissory notes (including convertible promissory notes)
 PRIVATE PLACEMENT or NON-PUBLIC OFFERING
Purchasers are often institutional investors such as banks, insurance companies or
pension funds.
RIGHT ISSUE
Definition
A right issue is a way in which a company can raise money by selling new shares.
These shares are offered to existing shareholders in proportion to their current
shareholding, but at a much cheaper price than the current market price.

Rights issues can be launched from a position of strength; a company doing well
might need further capital to fund a new venture, expansion or a strategic takeover.
Alternatively, companies also launch rights issues from a position of weakness, for
example, if it needs extra funds after suffering losses or a deterioration in its balance
sheet.
RIGHT ISSUE
Overview of right issues

Characteristics of rights issues in India

SEBI guidelines for rights issues
 INVESTMENT BANKING
•A form of banking done by investment banking firms for corporations, often in
exchange for fees and commissions. The bank performs public offerings, acts as a
broker, and carries through mergers and acquisitions.

Activities
•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, non-profit institutions, and individuals – and help them raise funds on
the capital market.

Major Functions
• 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
• Manage investment portfolios
 INVESTMENT BANKING
•Commercial banks vs. Investment banking firms-Similarities & dis-similarities

•Scope of investment banking in India

• Banks of Indian origin functioning in India

INVESTMENT BANKING

Role of Investment bankers

Investment Bankers are not But Investment Bankers do

Consultants Analysis
Accountants Provide a sanity check
Lawyers Understand the legal agreement
Operations specialists Comparative evaluation
TOP INVESTMENT BANKING FIRMS
• Goldman Sachs & Co.
• The Blackstone Group
• Morgan Stanley
• Lehman Brothers
• JPMorgan Investment Bank
• Merrill Lynch
• Citi Markets & Banking
• Lazard
• Credit Suisse Investment Banking Division
• UBS Investment Bank
THANK YOU