Post on 07-Aug-2015
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Quadmester-1
S.No. Paper Paper Code Covered by Page No.
1. Financial Institutions & Markets PGEP(FM) 101 NIFM 03-04
2. Capital Market Operations PGEP(FM) 102 NSE 05-07
3. Quantitative Methods for Financial Markets PGEP(FM) 103 NIFM 08-09
4. Accounting and Taxation for Mangers PGEP(FM) 104 NIFM 10-11
5. Economics for Financial Markets PGEP(FM) 105 NIFM 12-13
6. Introduction to Financial Planning PGEP(FM) 106 NSE 14-15
Quadmester-2
S.No. Paper Paper Code Covered by Page No.
1. Corporate Finance including Merger & Acquisitions PGEP(FM) 201 NIFM 16-18
2. Financial Reporting Standards PGEP(FM) 202 NIFM 19-20
3. Computer Application in Finance PGEP(FM) 203 NIFM 21-22
4. Corporate and Capital Market Laws PGEP(FM) 204 NSE 23-23
5. Commodities Market Operations PGEP(FM) 205 NSE 24-25
6. Derivative Market Options PGEP(FM) 206 NSE 26-27
Quadmester-3
S.No. Paper Paper Code Covered by Page No.
1. Financial Econometrics PGEP(FM) 301 NIFM 28-29
2. Bank Management PGEP(FM) 302 NIFM 30-31
3. Foreign Exchange & Currency Market PGEP(FM) 303 NIFM 32-34
4. Financial Valuation and Modelling PGEP(FM) 304 NSE 35-36
5. Technical Analysis PGEP(FM) 305 NSE 37-38
6. Equity Research PGEP(FM) 306 NSE 39-40
Quadmester-4
S.No. Paper Paper Code Covered by Page No.
1. Behavioural Finance PGEP(FM) 401 NIFM 41-43
2. Wealth Management PGEP(FM) 402 NSE 44-45
3. Investment Banking PGEP(FM) 403 NSE 46-48
4. Venture Capital & Private Equity PGEP(FM) 404 NSE 49-50
5. Mutual Funds & Fixed Income Securities PGEP(FM) 405 NSE 51-52
6. Project Work PGEP(FM) 406 NIFM/NSE 53
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FINANCIAL INSTITUTIONS & MARKETS
Course Code: PGEP(FM) 101
OBJECTIVES
To provide an overall understanding of Indian Financial System. It aims at
discussing the different components of Indian Financial Systems viz.,
Financial Institution, Financial Markets and Financial Instruments.
CONTENTS
Module 1: Financial System and Economic Development
• Financial system & economic development,
• Interest rate - components & dynamics,
• Financial Intermediation,
• Regulation - aspects and institutional framework in India,
• Financial Sector Reforms.
Module 2: Money Market
• CCIL, Money market,
• Government securities market,
• Money market instruments - call money and notice money, treasury
bills (TBs),
• Commercial papers (CPs),
• Certificate of deposits (CDs),
• Commercial bills, repos,
• Regulation - aspects and institutional framework in India.
Module 3: Capital Market
• Capital Market - primary market, secondary market,
• Trends in trading,
• Volume and capitalization: BSE and NSE trading platforms,
• Screen based trading: trading clearing & settlement,
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• Credit rating,
• Merchant banking,
• CMR Regulation - aspects and institutional framework in India.
Module 4: Foreign Exchange and Derivative Market
• Foreign Exchange Market - concept, organization and dynamics,
• Financial Derivatives - derivative markets in India,
• derivative instruments; trading of derivatives,
• Regulation - aspects and institutional framework in India.
Module 5: Select Financial Instruments & Financial Services
• Global Depository Receipt & American Depository Receipt,
• Fixed income instruments,
• Mutual funds,
• Insurance,
• Pension,
• Warrants and Convertibles,
• Issuance and listing of securities - Follow on issues,
• Rights issue,
• Book Building,
• Security Contract & Regulatory Act.
Suggested Readings:
• Khan MY: Indian Financial System, Tata McGraw Hill, and New Delhi,
2000.
• Bhole, L M: Financial Institutions and Markets: Structure Growth and
Innovations.2nd edition: New Delhi: Tata McGraw Hill, 1992.
• Srivastava, R M: Financial Institutions in Indian Financial Institutions. 3rd
revision ed. Mumbai: Himalaya Publishing House, 1996.
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CAPITAL MARKET OPERATIONS
Course Code: PGEP(FM) 102
OBJECTIVES
This course is designed to help the students in understanding the capital
market trading, clearing, settlement and risk management processes of NSE.
The students will also learn the eligibility criteria for membership of NSE,
important regulatory aspects and valuation concepts.
CONTENTS
Module 1: Indian Securities Market – an Overview
• Introduction,
• market segments, primary market, secondary market,
• products and participants,
• derivatives market, reforms, research,
• Corporate and government securities market.
• NSE membership - stock brokers, sub-brokers, broker-clients
relationship, trading mechanism, code of ethics etc.
Module 2: Trading
• Introduction,
• NEAT system, market types, corporate hierarchy,
• local databases,
• market phases,
• order management, trade management, auction,
• limited physical market,
• RETDEBT market (RDM), trading,
• Information downloaded to trading members and internet broking.
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Module 3: Clearing and Settlement
• Introduction,
• key terminologies,
• transaction cycle, settlement process,
• settlement agencies, risks in settlement, securities settlement, funds
settlement,
• shortages handling,
• risk containment measures,
• international securities,
• identification number,
• demat and electronic transfer of securities,
• investor protection fund,
• clearing software – data and reports download, file transfer protocol.
Module 4: Legal Framework and Fundamental Valuation Concept
• Introduction to various Acts governing securities Market
• Securities Contracts (Regulation) Act, 1956,
• Securities Contracts (Regulation) Rules, 1957,
• Securities and Exchange Board of India Act, 1992,
• SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992,
• SEBI (Prohibition of Insider Trading) Regulations, 1992,
• SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to
Securities Markets) Regulations, 2003,
• The Depositories Act, 1996,
• Indian Contract Act, 1872,
• The Companies Act, 1956,
• Income Tax Act, 1961,
• Money Laundering Act, 2002.
• Fundamental Valuation Concepts
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• Elementary statistical concepts,
• understanding financial statements,
• Time value of money and equity research.
Market Simulation Lab - NLT
Students will develop financial market skills such as trading, investment,
portfolio management etc. through practice on NSE Learn to Trade (NLT), an
internet based market simulation software.
P.S.: Students must read daily news papers like The Economic Times,
Financial Express etc., watch business channels e.g. CNBC, NDTV Profit, ET
Now etc. and get updates from websites of SEBI, NSE etc.
Suggested Readings:
• Capital Market (Dealers) Module, Workbook from NSE
QUANTITATIVE METHODS FOR FINANCIAL MARKETS
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Course Code: PGEP(FM) 103
OBJECTIVES
The paper is expected to review various quantitative techniques used in
financial markets. It aims at developing usage of quantitative skills in financial
markets and attempts to make participants comfortable in usage of these
techniques with the help of observed data and forecast. It helps wherever
possible to predict / forecast prices or returns and interest rates.
CONTENTS
Module 1: Useful Mathematical Functions:
• Graphing and solving linear functions;
• Simultaneous equations;
• Simple Polynomials;
• Discrete and Continuous Compounding;
• Discounting - link to interest;
• logarithmic and exponential functions;
• Interpretation within a business context.
Module 2: Descriptive and Inferential Statistics
• Descriptive Statistics: data presentation;
• Frequency distributions;
• Measures of Central Tendency;
• Dispersion;
• Summaries of data and usefulness of trends, patterns and exceptions.
Module 3: Probability and Sampling Technique
• The concept of probability;
• Discrete and continuous random variables;
• Theory of distributions;
• Expected values;
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• Probability Density Function: Links to business data; Population -
samples;
• Probalistic and Non Probalistic Sampling.
Module 4: Hypothesis Testing
• Hypothesis testing - Parametric and Non-Parametric approach;
• Confidence intervals - interpretation;
• Usefulness in business context.
Module 5: Parametric Data Analysis
• Regression analysis;
• Correlation, Scatter diagrams;
• OLS techniques;
• Interpretation of results;
• Multiple regression;
• Strengths of evidence - statistical testing;
• Link to decision - making in a business context.
Suggested Readings:
• Cochran, William G.: Sampling Techniques, 3rd Edition, Paperback, Wiley.
• Dominick Salvatore & Derrick Reagle: Schaum's Outline of Statistics and
Econometrics,
2nd
Revised Edition, McGraw Hill Companies.
ACCOUNTING AND TAXATION FOR MANAGERS
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Course Code: PGEP(FM) 104
OBJECTIVES
To provide the participants a thorough grounding of Commercial Accounting
concepts and Financial Statements with analysis of Financial Statements &
Taxation practices related to Capital Gains.
CONTENTS
Module 1: The Foundation
I Conceptual Framework of Financial Accounting
• Users of Accounting Information and their Information Needs;
• Basic Concepts and Conventions & Assumptions;
• Accounting Equation and the rules of Debit and Credit.
II Corporate Financial Statements:
Legal Requirement relating to preparation of Financial Statements of
Companies
a. Profit &Loss Account
• Features of Profit and Loss Account and its preparation;
• Understanding the various items of Profit and Loss Account
and their treatment.
b. Balance Sheet
• Features of Balance Sheet;
• Understanding the various items of Balance Sheet and their
treatment;
• Notes to Accounts and Accounting Policies.
c. Cash Flow Statement
• Understanding, Construction and interpretation of Cash
Flow Statement.
Module 2: Annual Reports
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Contents of Annual Report
• Auditors' Report;
• Directors' Report;
• Corporate Governance Report;
• Segment Reporting;
• Value Reporting.
Cases: Any two annual reports shall be discussed.
Module 3: Analysis of Financial Statements
• Common-size Financial Statement;
• Ratio Analysis; Liquidity Ratios, Solvency Ratios, Activity Ratios &
Profitability Ratios;
• Ratios Useful for Shareholders and Investors;
• Du-Pont Analysis;
• Altman’s Z score.
Module 4: Taxation
• Overview of IT Act;
• Securities Transaction Tax (STT);
• Capital Gains (Short Term Capital Gain and Long Term Capital
Gain);
• Services Tax;
• Income from Business and Profession.
Suggested Readings:
• Dr. T.P. Ghosh: Accounting for Managers, Taxman Publication
• D.S. Rawat: Student Guide to Accounting Standards, Taxman
Publication
• Ambrish Gupta: Financial Accounting for Management, Pearson
Publication
• Vinod Singhania: A Student Guide to Income Tax, Taxman Publication
ECONOMICS FOR FINANCIAL MARKETS
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Course Code: PGEP(FM) 105
OBJECTIVES
This paper focuses on a few simple but powerful economic concepts that
enable us to explain features of financial markets. The paper also
demonstrates the process of important link between the financial system
and the performance of the aggregate economy.
CONTENTS
Module 1: Economics for Financial Markets – Introduction
• Why Study Money, Banking, and Financial Markets;
• An Overview of the Financial System;
• Understanding Interest Rates and its behavior;
• The Risk and Term Structure of Interest Rates;
• The Stock Market, the Theory of Rational Expectations, and the
Efficient
Module 2: Monetary Theory
• The Demand for Money
• The Keynesian Framework and the ISLM Model
• Monetary and Fiscal Policy in the ISLM Model
• Aggregate Demand and Supply Analysis
• Transmission Mechanisms of Monetary Policy: The Evidence
• Money and Inflation
Module 3: Central Banking and the Conduct of Monetary Policy
• Structure of Central Banks
• Multiple Deposit Creation and the Money Supply Process
• Determinants of the Money Supply
• Tools of Monetary Policy
• Conduct of Monetary Policy: Goals and Targets
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Module 4: Models of Securities Prices in Financial Markets
• Single-Period Models
• Multiperiod Models
• Continuous-Time Models
• Fundamentals of Equilibrium Models
• CAPM
• Multifactor Models
Suggested Readings:
• Mishkin, Frederic S.(2004). The economics of money, banking, and financial
markets. 7th ed.Pearson The Addison-Wesley series in economics.
• Campbell, J., A. Lo, and G. MacKinlay. (1996). The Econometrics of Financial
Markets. Princeton, NJ: Princeton University Press.
• Dothan, U. (1990). Prices in Financial Markets. New York: Oxford University
Press.
• Fama, E. (1976). Foundations of Finance. New York: Basic Books.
INTRODUCTION TO FINANCIAL PLANNING
Course Code: PGEP(FM) 106
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OBJECTIVES
This paper serves individuals who are, or will be, actively developing their
own personal financial plans.
CONTENTS
Module 1: Foundations of Financial Planning
• Understanding the Financial Planning Process
• Your Financial Statements and Plans
• Personal Financial Planning – The Process
• Setting Financial Planning Objectives
• Managing Your Taxes
Module 2: Managing Basic Assets
• Managing Your Cash and Savings
• Making Housing and Automobile Decisions
• Managing Credit: Borrowing on Open Account, Using consumer Loans
• Using Insurance Effectively: Basic Insurance Principles, Life Insurance and Social
Security, Health Insurance, Property and Liability Insurance
Module 3: Managing Assets
• Basic Investment Principles
• Investing in Stocks and Bonds
• Making Securities Transactions
• Investing in Mutual Funds
• Investing in Fixed-Income Securities
• Income Tax Planning
Module 4: Retirement and Estate Planning
• Meeting Retirement Goals
• Preserving Your Estate
• Estate Planning Principles
• Planning for Death Taxes
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• Will Substitutes in the Estate Plan
• Planning for Business Interests
Suggested Readings:
• J. Gitman, Lawrence and D. Joehnk Michael. Personal Financial Planning.
Harcourt Brace College Publishers, The Dryden Press.
• G. Victor Hallman and Jerry S. Rosenbloom. Personal Financial Planning.
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CORPORATE FINANCE INCLUDING MERGERS & ACQUISITION
Course Code: PGEP(FM) 201
OBJECTIVES
Corporate Finance aims to provide a conceptual foundation to the theoretical aspects of
corporate finance. The end goal is to provide students with the tools necessary to
conduct accurate financial analysis as well as to analyze financial scenarios using
financial theory.
Furthermore, Mergers and Acquisitions discuss the organic and inorganic growth
choices as pursued by the firms.
The course will sensitize the students about the need for corporate restructuring for
achieving fast growth and maximize shareholders value in the context of ever increasing
competition thrown up by liberalization and globalization of Indian economy.
It is expected that after pursuing this course the students will be able to develop
competencies in identifying opportunities/areas for mergers, demergers,
amalgamations and takeovers etc., carrying out valuations involved therein, building up
strategies for them and evaluating the post restructuring performance of the enterprise.
CONTENTS
Part A: Corporate Finance
Module 1. Foundation of Finance
• Goals and Functions of finance
• Applications of Time Value of Money
Module 2. Risk and Return
• Finding the Risk and Return of Securities – Ex-post and Ex ante
• Risk and Return on a Portfolio - 2 Security Case and 3 -Security
Case: Capital Assets Pricing Model
Module 3. Cost of Capital and Valuation of Securities
• Finding the Cost of Capital for various sources of finance
• Weighted Cost of Capital: Book Value and market Value
Proportions
• Equity and Bond Valuation
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Module 4. Capital Budgeting: Techniques and Applications
• Determination of Relevant Cash Flows
• Capital Budgeting Techniques and their application
• Capital Budgeting under conflicting situations
• Capital Rationing
• Investment Decision under Risk and Uncertainty
Module 5. Capital Structure & Dividend Policy
• Operating, Financial and Total Leverage FBIT-FPS Analysis
• Capital Structure Theories
• MM Hypothesis with and without taxes
• Capital Structure Decision Making
Module 6. Dividend Policy
• Dividend Policy - Theories, Mechanics and Practices of Dividend
Payment
• Dividend Policy in India: Some Recent Evidence
Module 7. Working Capital Management - An Overview:
• Nature of Working Capital
• Planning of Working Capital
• Computation of Working Capital and Management the
Constituents of Working Capital
• Cash, Inventory and Receivables
Part B. Mergers and Acquisitions
Module 8. Introduction to Corporate Restructuring
• Introduction, Scope & Types: : Expansion, Downsizing and
Restructuring
• Objectives & Motivations of Mergers, Takeovers, Acquisitions &
Demergers
Module 9. Strategy, Diversification, Types & Characteristics
• Analytical & framework for Generic & Corporate Strategies
• Economic Rationales for major types of mergers
• Managerial, Financial& Organizational Synergy
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• Due Diligence Process & Value chain analysis
Module 10. Valuation- The Financial Methodology
• Valuation Models; Valuation of listed and unlisted companies,
Modes of valuation
• Fixing price for acquisition.
• Determination of share exchange ratio on merger, Share Swaps
Module 11. Restructuring Techniques and Procedures
• Techniques of and Procedure for organizing takeover bids
• Search for acquisition of Target Company
• Procedure for Takeovers and Acquisitions
• Code of conduct, SEBI Takeover Regulations
Module 12. Downsizing & Antitakeover strategies
• Forms of Demergers & Reverse
• Mergers, Divestitures
• Equity carve out; Master Limited Partnerships
• Leveraged buyout and Management buyout
• Defensive & Anti-takeover strategies & Cost of Such strategies
Suggested Readings:
• Barley Mayers: Corporate Finance.
• Khan-Jain: Financial Management.
• Godbole, Prasad & G, 'Mergers, Acquisitions and Corporate Restructuring "Vikas
Publishing House Pvt. Ltd, 2009 written as Godbole: MACR.
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FINANCIAL REPORTING STANDARDS
Course Code: PGEP(FM) 202
OBJECTIVES
India has been preparing for IFRs conversions in the times to come. IFRS’s as a Financial
Reporting Standards are revolutionary nature and based on principles despite the
criticism and carve outs they draw across the globe. Approximately 130 nations and
reporting jurisdictions permit or require IFRS’s for domestic listed companies. This
paper on Financial Reporting Standards strengthen the knowledge of recognition of
assets, liability, equity and income & expense in Indian Accounting Standards vis-a-vis
IFRS’s.
CONTENTS
Module1. A review of National Accounting Standards, International Accounting
Standards and US GAP
• General Accounting Standards
o Disclosure of Accounting Policy – AS1 - IAS1
• Revenue Recognition
o Revenue Recognition – AS9 - IAS18
Module2. Asset Related Accounting Standards
o Accounting for fixed assets – AS10 - IAS16
o Depreciation Accounting – AS6 - IAS16
o Accounting for leases - AS19 - IAS17
o Accounting for intangible assets – AS26 – IAS38
Module 3. Disclosure Related Accounting Standards
o Cash Flow Statements – AS3 – IAS7
o Segment Reporting – AS17 – IAS14
o Related party disclosure – AS20 – IAS33
o Discontinuing operation – AS24-IAS35
Module 4. Investment Related Accounting Standards
o Accounting for Investments – AS13 – IAS39 & IAS40
o Accounting for amalgamation – AS14 – IAS22
o Consolidated Financial Statements – AS21 – IAS27
o Accounting for investments in associates in consolidated Financial
Statements – AS23 – IAS28
o Financial Reporting of Interest in Joint Venture – AS27 – IAS31
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Module 5. Financial Instrument Standards
o Financial Instruments: Recognition and Measurement – AS30 - IAS39
o Financial Instruments: Presentation AS-31 – IAS32
o Financial Instruments: Disclosures AS-32 – IFRS -7
Module 6. Other Accounting Standards
o Accounting for the effects of changes in foreign exchange rates AS11 –
IAS21
o Accounting for taxes on income AS22 – IAS 12
o Interim Financial Reporting AS25 – IAS34
o New Accounting Standards
Suggested Readings:
• Accounting Standard by Shri D.S. Rawat (Taxman Publication)
• T.P. Ghosh: Indian Accounting Standards and IFRSs, Taxman
• Compendium of the Accounting Standard - ICAI
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COMPUTER APPLICATION IN FINANCE
Course Code: PGEP(FM) 203
OBJECTIVES
Whether one works for a Fortune 500 Corporation, a small company, a government
agency, or a non-profit organization, if (s)he reads this paper the chances are that (s)he
uses Microsoft Excel in his daily work. Their job probably involves summarizing,
reporting, and analysing data; it might also involve building analytical models to help
their employer in increasing profits, reducing cost or just managing operations more
efficiently. This paper is meant to develop the skills of computer applications in the
Finance.
CONTENTS
Module 1: Microsoft Excel Using VBA
• Introduction to VBA
• Elements of VBA language and syntax
• Designing a good program
• Entering data and formulas to the worksheet under VBA
• Range validation
• Working with worksheet contents
• Selecting ranges and formatting cells using VBA
• Assigning values to cells and ranges using VBA
• Concatenating strings
• Using external functions through add-ins like Solver, Financial Analysis
ToolPak, etc
• Embedded macro buttons
• Testing and debugging VBA code
Module 2: Financial Econometrics Using MS Excel
• The Simple Linear Regression Model
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• Interval Estimation and Hypothesis Testing
• Prediction, Goodness-of-Fit and Modeling Issues
• The Multiple Linear Regression
• Heteroskedasticity
• Dynamic Models, Autocorrelation, and Forecasting
• Random Regressors and Moment-Based Estimation
• Nonstationary Time-Series Data and Cointegration
• VEC and VAR Models: An Introduction to Macroeconometrics
• Time-Varying Volatility and ARCH Models: An Introduction to Financial
Econometrics
Module 3: Financial Model Using MS Excel
• The Black Scholes Formula in the spreadsheet
• Introduction to Monte Carlo Simulations
• Calculating Greeks in Monte Carlo Simulations
• CAPM using spreadsheet
• Multi-period model using speadsheet
Suggested Readings:
• Vijay Gupta, 2002, Financial Analysis Using Excel, Vol. 6, VJ Books Inc. Canada
• Curtis D. Frye, 2007, Step By Step MS Office Excel, PHI Pvt. Ltd
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CORPORATE AND CAPITAL MARKET LAWS
Course Code: PGEP(FM) 204
OBJECTIVES
This course is designed to help the students in understanding the legal environment in
which the financial market operates.
CONTENTS
Module1. Companies Act, 1956, SCRA, 1956 and and Depositories Act, 1996
• Companies Act 1956 - Incorporation of a Company, Prospectus, Allotment
and Issue of Shares, Share Capital and Debentures, Management and
Administration, Winding up.
• Securities Contract Act, 1956 – Definitions, Listing of Securities, Penalties
and Procedures. Depositories Act, 1996 – Definitions, Rights of
Obligations of Depositories, Participants, Issuers and Beneficial owners,
Enquiry and Inspection, Penalty.
Module2. SEBI Regulations Act, 1952, Circulars, Rules, Regulations and Bye-
laws
• Definitions, registration of stock brokers and sub brokers, registration of
trading and clearing members, general obligations and responsibilities,
inspection and procedure for action in case of default.
• Circulars, rules, regulations and bye-laws - NSE, NSCCL, SEBI and MoF
circulars as enforced from time to time, NSE rules, regulations and bye-
laws, NSCCL rules, regulations and bye-laws.
Module3. SEBI Rules and Regulations
• SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to
Securities Market) Regulations, 2003.
• SEBI (Prohibition of Insider Trading) Regulations, 1992, SEBI (Portfolio
Managers) Regulations, 1993,
• SEBI (Underwriters) Regulations, 1993.
Module4. SEBI Rules and Regulations
• SEBI (Ombudsman) Regulations, 2003, Compliance with the provision of
listing agreement, Compliance with book building guidelines for raising
funds through public issue, Compliance with SEBI(DIP) guidelines for
raising funds through public issue
Suggested Readings:
• Corporate & Capital Markets Laws Module, Workbook from NSE
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COMMODITIES MARKET OPERATIONS
Course Code: PGEP(FM) 205
OBJECTIVES
This course is designed to help the students in understanding of commodities market,
products, financial derivatives, pricing mechanism etc. They will be able to understand
the trading, clearing and settlement operations using NCDEX platform. Students will also
learn regulatory framework and taxation aspects.
CONTENTS
Module 1: Introduction to Commodity Derivatives
• Introduction to derivatives, products, participants and functions, derivatives
markets,
• Difference between commodity and financial derivatives.
• Evolution of commodity exchanges,
• Global commodity derivatives exchanges, latest developments.
• The NCDEX platform – structure, exchange membership,
• risk management,
• Clearing and settlement system and commodities traded on the NCDEX platform.
Module 2: Application of Commodity Futures
• Instruments available for trading - forward contracts,
• introduction to futures and options,
• payoff for F&O,
• Using futures versus options.
• Pricing commodity futures - investment assets versus consumption assets, the
cost of carry model, the futures basis.
• Using commodity futures for hedging, speculation and arbitrage.
Module 3: Trading, Clearing and Settlement
• Trading - futures trading system,
• entities in the trading system,
• commodity futures trading cycle, order types and trading, parameters,
• Margins for trading in futures, charges, hedge limits.
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• Clearing and settlement - clearing, settlement, risk management,
• Margining at NCDEX and Standard Portfolio Analysis of Risk (SPAN).
Module 4: Regulatory Framework of Commodity Derivatives
• Rules governing commodity derivatives exchanges, participants,
• Investor grievances and arbitration.
• Implications of Sales Tax, Value Added Tax (VAT) and obligations.
• Electronic Spot Exchange - NCDEX Spot Exchange Ltd. (NSPOT).
Market Simulation Lab - NLT
Students will develop financial market skills such as trading, investment, portfolio
management etc. through practice on NSE Learn to Trade (NLT), an internet based
market simulation software.
P.S.: Students must read daily news papers like The Economic Times, Financial Express
etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and get updates from
websites of SEBI, NSE etc.
Suggested Readings:
• Commodities Market Module, Workbook from NSE
26
DERIVATIVE MARKET OPERATIONS
Course Code: PGEP(FM) 206
OBJECTIVES
This course is designed to help the students in understanding the basics of the
derivatives market products in speculating, hedging and arbitraging. Students will also
learn the process involved in trading, clearing, settlement and risk management of
equity derivatives in addition to the regulatory, accounting and taxation issues.
CONTENTS
Module 1: Introduction to Derivatives
• Derivatives - types, history, participants and economic functions.
• Understanding interest rates and stock indices - Indices construction, economic
significance, application etc.
• Futures contracts, mechanism and pricing - forward contracts, introduction to
futures, terminologies, pricing etc.
Module 2: Pricing, Applications of Futures and Options
• Understanding Beta,
• Numerical illustration of applications of stock futures.
• Options contracts,
• mechanism and applications - option terminology,
• comparison between futures and options,
• options payoffs,
• Application of options.
• Pricing of options contracts and Greek letters - variables affecting option pricing,
The Black Scholes Merton model for option pricing (BSO), the Greeks.
Module 3: Trading, Clearing and Settlement
• Futures and options trading system,
• the trader workstation,
• futures and options market instruments,
• Criteria for stocks and index eligibility for trading, charges.
• Clearing and settlement - clearing entities, clearing mechanism, settlement
procedure, risk management and margining system.
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Module 4: Regulatory Framework and Accounting
• Securities Contracts (Regulation) Act, 1956,
• Securities and Exchange Board of India Act, 1992,
• Regulation for derivatives trading,
• Adjustments for corporate actions.
• Accounting for futures,
• accounting for options,
• Taxation of derivative transaction in securities.
Market Simulation Lab - NLT
Students will develop financial market skills such as trading, investment, portfolio
management etc. through practice on NSE Learn to Trade (NLT), an internet based
market simulation software.
P.S.: Students must read daily news papers like The Economic Times, Financial Express
etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and get updates from
websites of SEBI, NSE etc.
Suggested Readings:
• Derivative Market (Dealers) Module, Workbook from NSE
28
Financial Econometrics
Course Code: PGEP(FM) 301
Objective:
The course covers topics in time series analysis with an emphasis on applications rather
than econometric theory. The aim of the course is to equip students with a working
knowledge of important econometric techniques used in macroeconomics, international
finance, and financial economics.
CONTENTS
Module I Single-Equation Regression Models
• The Nature of Regression Analysis
• Two-Variable Regression Analysis: Some Basic Ideas
• Two-Variable Regression Model: The Problem of Estimation
Module II Multiple Linear Regression Models
• Two-Variable Regression: Estimation and Hypothesis Testing
• Multiple Regression Analysis: The Problem of Estimation
• Multiple Regression Analysis: The Problem of Inference
Module III Relaxing the Assumptions of the Classical Model
• Multicollinearity
• Heteroscedasticity
• Autocorrelation
Module III Time Series Econometrics
• Nonstationary Time-Series Data and Co integration
• VEC and VAR Models
• Time-Varying Volatility and ARCH Models
Core Reading:
Gujarati, Damodar N. and Dawn C. Porter, Basic econometrics (Latest Edition), McGraw-
Hill/Irwin.
Reference Reading:
Brooks, C. (2008), Introductory Econometrics for Finance. 2nd
ed., Cambridge:
Cambridge University Press.
Campbell, J.Y., A.W. Lo and A.C. MacKinlay (1997), The Econometrics of Financial
Markets, Princeton, NJ: Princeton University Press.
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Christoffersen, P.F. (2003), Elements of Financial Risk Management. Amsterdam:
Academic Press.
Tsay, R.S. (2005), Analysis of Financial Time Series. 2nd
ed., New York: Wiley.
Wang, P. (2007), Financial Econometrics, London: Routledge.
Enders, W. (1995), Applied Econometric Time Series, New York: Wiley. Hamilton,
J.D. (1994), Time Series Analysis, Princeton, NJ: Princeton University Press.
Maddala, G.S., and I.-M. Kim (1998), Unit Roots, Cointegration, and Structural
Change, Cambridge, U.K.: Cambridge University Press.
Diebold, F.X. (2006), Elements of Forecasting, Cincinnati, 4th
ed., South-Western
College Publishing.
Mark, N.C. (2001), International Macroeconomics and Finance, Blackwell
Publishers.
Sarno, L., and M.P. Taylor (2002), The Economics of Exchange Rates, Cambridge
University Press.
Judge, G. G., R.C. Hill, W.E. Griffiths, H. Lutkepohl, and T.-C. Lee (1988),
Introduction to the Theory and Practice of Econometrics, 2nd
ed., New York:
Wiley.
Kennedy, P. (2008), A Guide to Econometrics, 6th
ed., Blackwell Publishers.
Stock, J.H., and M.W. Watson (2003), Introduction to Econometrics,
Boston, MA: Addison- Wesley.
30
BANK MANAGEMENT
Course Code: PGEP(FM) 302
OBJECTIVES
Banking Sector is not only the integral part of any financial system; rather it acts on the
back bone of the system. Studying this paper will make the participants well versed with
Banking System in India, its regulation, operation exposure and risk management
techniques.
CONTENTS
Module1: An Overview of Banks and NBFCs.
• Indian Banking System, Role of RBI
• Regulatory system for Banks and NBFCs {{{{
Module 2: Banking Sector Reforms,
• Banks Balance Sheet
• Liabilities Management
• Cost of funds and Transfer Pricing
• Negotiable Instrument s Act, Banking Regulation Act
Module 3: Loan Policy of Banks, Exposure Norms
• Credit Appraisal, Assessment of Credit requirements 0 Project Finance,
• Credit Rating, Pricing of Loans, PLR
• Credit Delivery
• Non Fund Business LIC, Guarantee,
• Credit Supervision and Monitoring
• Leasing and Hire Purchase
• Case Study
Module 4: Prudential Norms on Income Recognition and Asset
• Classification
• Restructuring of Loans,
• Industrial Rehabilitation,
• Management of NPAs,
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• Recovery Management in Banks,
• Legal and Non Legal Measures.
• DRT Act 1993, SARFAESI Act 2002.
• Exercises and Problems
Module 5: Investment Management in Banks, SLR l Non SLR, securities
• Dealing Room Operations,
• Integrated Treasury Operations 0 Asset Liability Management 0 Case Study on
ALM
Module 6: International Banking,
• Foreign Exchange and Euro Markets, 0 Bourse Programme in Forex,
• Trade Finance
• Derivatives,
• Foreign Currency Funding Options
Module 7: NBFCs - Types,
• RBI guidelines for NBFCs,
• Role of NBFCs in financing projects
Suggested Readings:
• Rose, Peter S, Commercial Bank Management
• Heffernan, Shelagh : Modem Banking
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FOREIGN EXCHANGE MANAGEMENT & CURRENCY MARKETS
Course Code: PGEP(FM) 303
OBJECTIVES
This course is designed to help the students in understanding the basic concepts of
Foreign Exchange market & currency derivatives, products and their applications as a
risk management tool.
CONTENTS
Module 1: Foreign Exchange Management
• Forex Market-Wholesale and Domestic;
• Quotations- Direct, Indirect and Cross Currency;
• Various Kinds of Transactions and their settlement dates;
• Forward Rates;
• Swaps;
• Quotes for various kinds of Merchant Transactions;
• Early Delivery;
• Extension or Cancellation of Forward Contracts.
Module 2: Exchange Rate Determination and Forecasting
• Purchasing power parity and interest rate parity;
• Relationship between PPP and IPP;
• Reasons for Deviation from PPP and IPP;
• Models of Exchange rate forecasting;
• The Demand and Supply Approach;
• The Monetary Approach;
• The Portfolio balance Approach.
Module 3: Foreign Exchange Exposure
• Financial Accounting and Foreign Exchange-Currency Translation Methods;
• AS-8 and FAS 52;
• Transaction exposure;
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• Managing Transaction and Translation Exposure;
• Designing a Hedging Strategy;
• Measuring & Managing Economic Exposure.
Module 4: Basics of Equity Derivatives
• Introduction;
• Definitions of basic derivatives;
• Put options & call options applications of derivatives and derivatives as a risk
management tool.
Module 5: Trading Futures and Options on Stock Exchanges
• Trading Futures - Pay-off of futures;
• Theoretical models for future pricing.
• Trading Options – option payouts;
• Option strategies;
• Determination of option prices and factors affecting option prices.
• Derivatives trading on NSE – using daily newspapers to track F&O;
• Settlement of F&O;
• Accounting and taxation.
Module 6: Introduction to Currency Markets
• Introduction to currency markets;
• Exchange rates;
• factors affecting currency futures;
• Strategies using currency futures;
• Hedging, speculation, arbitrage.
• NSE's currency derivatives segment.
Module 7: Trading, Clearing, Settlement and Risk Management in Currency
Futures
• NSE membership – categories;
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• Eligibility and criteria;
• Future contract specifications;
• Trading system, placing orders, client broker relationship.
• Clearing, settlement and risk management system through margins of different
kinds;
• Clearing entities and settlement mechanism.
Market Simulation Lab
Market simulation lab sessions using technical analysis software such as Metastock
for timing the currency futures trading decisions.
P.S.: Students must read daily news papers like The Economic Times, Financial
Express etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and get
updates from websites of SEBI, NSE etc.
Suggested Readings:
• International Finance, PG Apte
• Multinational Financial Management, Alan C. Shapiro
• Currency Derivatives: A Beginner’s Module, Workbook from NSE
35
FINANCIAL VALUATION AND MODELLING
Course Code: PGEP(FM) 304
OBJECTIVES
This course is designed to help the students learn the application of MS-Excel in the
financial modelling.
CONTENTS
Module 1: Excel as a tool in Financial Modelling
• Excel concepts - Basic commands.
• Functions - math’s, logical, look up, date, text and financial.
• Chart, diagram, picture, background, auto format, conditional formatting,
style, filter, sort.
• Formulas and macros.
• What if analysis, pivot table, pivot chart, scenario, goal seek, problem solver
tool, advanced filter.
Module 2: Financial Modelling Basic Concepts
• Introduction,
• Advanced functions of MS-Excel as a tool in financial modelling.
• Components of a financial model, building the template,
• filling in the historical data,
• identifying assumptions and drivers,
• forecasting various schedules and financial statement,
• building the supporting schedules,
• various approaches to valuation,
• key ratios, financial ratios and company analysis,
• Building cases and sensitivity analysis: - looking at the probabilistic analysis of
the best and worst case scenario.
Module 3: Cash Ratios and Non Cash Valuations
• Cash Ratio - Structured model with a menu & accounting statements,
• Calculating key financial ratios,
• Deriving an international cash flow.
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• Non Cash Flow Valuations - Accounting methods,
• Dividend discount models,
• Market-based methods – EPS and multiples,
• Fundamentals EV/EBITDA, EV/Sales, etc, Peer groups.
Module 4: Forecasting Methods and Initial Valuations
• Review of forecasting methods,
• relationship between company and financial strategy,
• identifying and forecasting key drivers,
• linkages and modelling problems,
• Deriving free cash flow.
• Cost of capital and initial valuation
• alternative theories – bonds and arbitrage pricing theory, capital asset pricing
model constituents,
• asset and equity betas,
• mathematical derivation,
• methods of adding terminal value,
• producing an equity valuation,
• comparison to existing share price,
P.S.: Students must read daily news papers like The Economic Times, Financial Express
etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and get updates from
websites of SEBI, NSE etc.
Note: The curriculum is under revision by NSE due to constant changes in financial
market and will be provided before the corresponding semester starts.
Suggested Readings:
• Financial Valuation and Modeling, Workbook from NSE
37
TECHNICAL ANALYSIS
Course Code: PGEP(FM) 305
OBJECTIVES
This course is designed to help the students to develop the practical skills for utilizing
tools and techniques of technical analysis for timing the investment and trading
decisions in stock, commodity and currency market.
CONTENTS
Module 1: Introduction to Technical Analysis
Technical analysis, basic assumptions, strengths and weakness. Dow theory, the
charts, candlestick charts analysis with one two and three candles like hammer,
hanging man, shooting star, bearish and bullish harami etc. Pattern Study -
Support and resistance, head and shoulders, double top and double bottom and
Gap theory.
Module 2: Major Indicators and Oscillators
Stochastics, RSI, Williams %R, MFI, Bollinger bands, Moving Averages, MACD,
Other Investments
Module 3: Major Theories in TA
Dow Theory and Eliot Wave Theory
Module 4: Risk Management, Trading Phycology and Trading Strategies
Risk Management – Need, techniques, uses of stop loss, qualities of successful
traders, golden rules of traders, do's and don'ts in trading, rules to stop losing
money, choosing the right market to trade, importance of discipline in trading.
Day trading, advantages of day trading, risks associated with trading, strategies
for day trading, momentum trading strategies.
38
Market Simulation Lab - NLT
Students will develop financial market skills such as trading, investment, portfolio
management etc. through practice on NSE Learn to Trade (NLT), an internet based
market simulation software.
P.S.: Students must read daily news papers like The Economic Times, Financial
Express etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and
get updates from websites of SEBI, NSE etc.
Suggested Readings:
• Technical Analysis, Workbook from NSE
EQUITY RESEARCH
Course Code: PGEP(FM) 306
OBJECTIVES
39
This course is designed to give the students a practical orientation towards the
principles of investment, pricing, valuation and portfolio management.
CONTENTS
Module 1: Introduction to Equity Research, and Economic Analysis
• Equity Research an Introduction – Overview,
• Market participants,
• Types of research,
• Role of an analyst,
• Stocks and industry classification.
• Time value of money, future and present value,
• Risk and return, types of risks, measurement,
• Beta, risk return trade off,
• Quantitative and qualitative aspects,
• Concept of intrinsic value.
• Economic analysis - economic indicators, gross domestic product, inflation,
interest rates, credit policies, foreign direct investment, FIIs etc.
Module 2: Industry and Company Analysis
• Industry analysis, life cycle of an industry,
• SWOT analysis,
• Characteristics of industry analysis,
• Michael Porters five forces model.
• Company analysis - non financial aspect,
• The management - general analysis of company, SWOT analysis, quality-price
matrix.
• Company analysis – financial, analysis of financial statements.
• Ratio analysis – Activity, Solvency and Valuation Ratios and leverage analysis.
Module 3: Valuation of Stocks and Firms
• Valuation concepts,
• Time value of shares,
40
• Share models, discount rate,
• Multiplier approach to share valuation, regression analysis, preferred stock.
• Valuation of firms,
• Weighted average cost, cost of debt, cost of preferred stock, cost of equity,
CAPM approach,
• Discounted cash flow approach,
• Discounted cash flow corporate valuation model,
• Relative corporate valuation model,
• Advantages and disadvantages of relative valuation.
Module 4: Report Writing and Presentation
• Equity Research Report Writing – Information memorandum,
• Format structure and content,
• Source of information and its validity,
• Desk research,
• Independent appraisal of management information,
• Expert / legal opinion
Market Simulation Lab - NLT
Students will develop financial market skills such as trading, investment, portfolio
management etc. through practice on NSE Learn to Trade (NLT), an internet based
market simulation software.
P.S.: Students must read daily news papers like The Economic Times, Financial Express
etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and get updates from
websites of SEBI, NSE etc.
Suggested Readings:
• Equity Research Module, Workbook from NSE
BEHAVIOURAL FINANCE
Course Code: PGEP(FM) 401
41
OBJECTIVES
Behavioural finance, studies the effects of social, cognitive, and emotional factors on the
economic decisions of individuals and institutions and the consequences for market
prices, returns, and the resource allocation. The fields are primarily concerned with the
bounds of rationality of economic agents. Behavioural models typically integrate insights
from psychology with neo-classical economic theory; in so doing, these behavioural
models cover a range of concepts, methods, and fields.
CONTENTS
INTRODUCTION
• Finance Theory as an Engine not a Camera, Rebuilding on New Foundations,
Challenging the Classical Assumptions of Finance, Modeling Behavioral Aspects
of Finance.
Module 1: FOUNDATIONS
• Financial Decision Making.
o The Expected Utility Rule, Expected Utility Theory: Simple But
Untrue?, Frames for Actions, Contingencies and Outcomes.
• Discounting.
o The Discounted Utility Model, How and Why Discount Rates
Vary, How Investment Decisions are Made When Discount
Factors Decline over Time.
• Learning.
o Rational Learning, Over Inference and the Law of Small
Numbers, Disagreement, & Tastes.
• Bubbles.
o Bubbles: Past, Present and Future, The 1929 Stock–Market
Crash, Should Government Burst the Bubble?
Module 2: ASSET PRICING
• Noise Traders
o Can Investors Get Emotional?
• Overconfidence and Optimism
o Do Investors Trade Too Much?
• Asset Pricing under Prospect Theory
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o The Basics of Prospect Theory, Does Prospect Theory Work?,
The Cumulative Probability Version of Prospect Theory, Does
Cumulative Prospect Theory Work?
• Overreaction and/or under reaction.
• Momentum.
• Herding.
• Insider Trading.
o Insider Trading Here for Better or Worse, Insider Trading,
Stock Options and the Construction of Earnings, Insider
Trading and its Consequence for Outsiders.
• Equity Premium Puzzle.
o The Puzzle, Loss Aversion in a Reference–Dependent Utility
Model.
Module 3: CORPORATE FINANCE
• Incorporation.
o Companies: Where did They Come from and Where will They
Go?, Agency, Monitoring and Incorporation.
• The Market for Information, Noise and Deception.
o The Boundaries of the Market for Corporate Information,
What Do Analysts Do?, Valuing Investment Advice.
• Dividends.
o The Irrelevance of Dividends to Value, A Prospect Theory
Explanation of Dividend Payments, Who Pays Dividends and
Why?
• Entrepreneurship.
Module 4: THE PROFESSIONS
Analysts’ Conflicts of Interest.
• Accounting Reform.
Suggested Readings:
• Behavioural Finance (2009), William Forbes, John Wiley & Sons
• Value Investing And Behavioral Finance 1st Edition, Parag Parikh, Tata McGraw-
Hill Education (2009)
44
This course is designed to help the students in managing the wealth of clients through
investments in equity, debt and alternative products, keeping in mind the risk profile
and taxation aspects while allocating assets.
CONTENTS
Module 1: Introduction to Wealth Management
Financial planning to wealth management, wealth cycle, risk profiling and asset
allocation, contract and documentation, client data collection, client data
analysis, life cycle, systematic approach to investing, financial plan, financial
blood-test report (FBR), financial planning in India. Economic cycles and
indicaters, interest rate views, currency exchange rate, the deficits.
Module 2: Investment and Risk Management using Equity & Debt
Role of equity, active and passive exposures, returns from passive exposure to
S&P CNX Nifty, sector exposure and diversification, fundamental and technical
analysis, fundamental valuation approaches, investment and speculation,
leveraging. Role of debt, deposits and debt securities, valuation of debt
securities, yields and interest rate risk, interest rate and debt investments, credit
exposure and debt investments, concentration risk, passive investments in debt
Module 3: Investment and Risk Management with alternate assets
Gold - Role of gold, gold investment routes, rupee returns from gold. Risk
assessment, life insurance, health insurance, general insurance, safeguards in
insurance. Derivatives–futures & options, mutual fund, venture capital / private
equity funds, hedge funds, structured products, portfolio management services
(PMS). Role of real estate, real estate investment routes and real estate indices.
Estate planning assets & liabilities, nomination, inheritance law, will, trust.
Module 4: Risk profiling, asset allocation and evaluation of investment
Risk profiling, why asset allocation?, strategic asset allocation, tactical asset
allocation, fixed asset allocation, flexible asset allocation, asset allocation returns
in equity and debt asset allocation returns in equity, debt and gold, allocation to
45
speculation, diversification in perspective. Risk-return framework, risk, risk
adjusted returns, selectively-invest classification scheme for investment products
Module 5: Taxation of Investment Products
Previous year and assessment year, gross total income, income tax slabs,
advance tax, tax deducted at source (TDS), exempted income, deductions from
income, long term and short term capital gain / loss, speculation profit / loss,
capital gains tax exemption, under section 54EC, capital gains tax exemption
under section 54F, setting off & carry forward. dividend tax / tax on income
distributed by mutual fund, securities transaction tax (STT), capital gains
taxation, taxation of fixed deposits and fixed maturity plans, dividend and
growth options in mutual fund schemes, wealth tax.
Suggested Readings:
• Wealth Management Module, Workbook from NSE
46
INVESTMENT BANKING
Course Code: PGEP(FM) 403
OBJECTIVES
This course is designed to help the students in understanding the role and
responsibilities of an Investment Banker, products, services for the individual as well as
corporate while managing the risks.
CONTENTS
Module 1: Financial Markets Overview
• Structure of financial market
• Types of markets
• Types of financial instruments & their importance
• Role of Investment Banks
Module 2: Analyzing Financial Statement for I-Banking
• Concept of the three financial Statements
• Understanding the line items of financial statements
• Understanding the relationship between financial statements
Module 3: Financial Statement Analysis
• Common sizing of financial statements
• Ratio analysis
• Time series analysis
• Cross sectional analysis
Module 4: Financial Modelling
• Introduction to financial modelling
• Preparing for modelling
• Building an earning projection model
• Review exercise
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Module 5: Relative Valuation Analysis
• Introduction to valuation
• Why do we value companies?
• Difference between book value and market value
• Valuation methodologies: relative & fundamental valuation
Module 6: Trading Comparable
• Choosing appropriate peer group
• Calculating equity value and enterprise value (EV)
• Calculating fully diluted shares outstanding (options &
convertibles)
• Adjusting the EV
• Normalizing Income statement
• Calculating last twelve months (LTM)
Module 7: Case Study on Trading Comps
• Practice on full trading comps
• Interpretation and analysis of trading multiples
Module8: Transaction Comparable
• Choosing appropriate peer group
• Discuss strategic rationale
• Different kind of deal considerations
• Control premiums, synergies
• Calculating equity value and EV
Module 9: Case Study on Transactions Comps
• Practice on full transaction comps
• Interpretation and analysis of transactions multiples
Module 10: Absolute Valuation Analysis
• Introduction to Discounted cash flow
• Dividend Discount Model
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• Free cash to Firm (FCFF) & Free Cash Flow to Equity (FCFE)
• Discount Rate (Cost of Debt, Cost of Equity & Cost of Capital)
• Forecasting
• Revenue drivers
• Cost drivers
• Practice complete DCF model
Pitch book building process
• Introduction to Pitchbooks
• Building Company Profiles
• Building case studies
• Building industry thematic
P.S.: Students must read daily news papers like The Economic Times,
Financial Express etc., watch business channels e.g. CNBC, NDTV Profit, ET
Now etc. and get updates from websites of SEBI, NSE etc.
Note: The curriculum is under revision by NSE due to constant changes in
financial market and will be provided before the corresponding semester
starts.
Suggested Readings:
• Investment Banking, Workbook from NSE
49
VENTURE CAPITAL AND PRIVATE EQUITY
Course Code: PGEP (FM) 404
OBJECTIVES:
This course is designed to help the students in understanding the role of private equity
for early stage in financing, structure and format of operation together with post-
investment support that can come with private equity capital.
CONTENTS:
Module 1: Private Equity Background
Evolution of Finance for Business, VC Funds and PE Funds, Fund Structure,
Leveraging in Funds, Forms of Investment by Funds, J Curve and Measuring the
Performance of Investments and PE Fund. PE Investment Criteria, Role of
Facilitators, Resource Mobilisation, Valuation & Dilution
Module 2: Business & Financial Model
Background, Assumptions, Cost of Project & Means of Financing, Projected
Profit & Loss Account , Projected Balance Sheet, Projec4rrdccxted Funds Flow,
Project IRR, Equity IRR, Loan Servicing Capability, Valuation, Sensitivity Analysis
and Building Scenarios. Buyouts and other Transactions - LBO, MBO, Project-
based Funding Transactions and Distressed Assets Funding Transactions.
Module 3: PE Investment Process
Sourcing of Proposals, Initial contact / Flier, Non-Disclosure Agreement (NDA),
Information Memorandum, Management Presentation, Initial Due Diligence,
Preliminary Investment Note, Non-binding Letter of Intent, Final Due Diligence,
Final Investment Memorandum, Signing the Term Sheet and Closure of the Deal.
Documentation and Typical Investment Conditions - Typical Investment
Conditions, Subscription Agreement and Shareholders’ Agreement.
Module 4: Tax Aspects of PE Investment
Section 10(23FB) of Income Tax Act, 1961, Section 10(47) of Income Tax Act,
1961, Income Types, Securities Transaction Tax (STT), Tax on Distributed Profit
(Dividend Distribution Tax), Taxability of Interest, Taxability of Short Term Capital
Gains on Debt, Taxability of Long Term Capital Gains on Debt, Taxability of Short
Term Capital Gains on Equity, Taxability of Long Term Capital Gains on Equity and
Taxation of Non-Residents. Post-Investment Support, Monitoring and Exit -
Support, Monitoring and Exit.
50
Module 5: Regulation of PE Funds
SEBI (Alternate Investment Funds) Regulations, 2012, Categories of AIFs,
Eligibility Criteria, Conditions & Restrictions for Investment in Fund, Tenure,
Listing, Conditions & Restrictions for Investment by Fund, General Obligations,
Maintenance of Records and Winding up of AIF.
Module 6: EMERGE: NSE’s Platform for SMEs - Emerge Introduction, Benefits of
Listing for Companies, Benefits of Listing for Investors, Eligibility Criteria, Listing
Requirements, Listing Fees, Selecting a Merchant, Banker for the Issue, Role of
Merchant Bankers in Emerge, Role of Market Makers in Emerge and The Emerge
Trading Platform.
P.S.: Students must read daily news papers like The Economic Times, Financial
Express etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and
get updates from websites of SEBI, NSE etc.
Suggested Readings:
Venture Capital and Private Equity Module, Workbook from NSE
51
MUTUAL FUNDS & FIXED INCOME SECURITIES
Course Code: PGEP(FM) 405
OBJECTIVES
This course is designed to help the students in understanding the basic and advance
concepts of mutual funds. In addition it will help them in understanding the
fundamental features of debt instruments, trading on the NSE-WDM Segment,
regulatory & procedural aspects and concepts in valuation of bonds.
CONTENTS
Module 1: Mutual Fund Products and Features
Mutual Funds, benefits, risks of investing, NAV, entry/exit load, types, fund offer
document. Different type of mutual fund products, features, exchange traded
funds (ETF) and gold ETFs. investments by mutual fund schemes, valuation of
investments by mutual fund schemes, mutual fund accounting, novel portfolio
structures in mutual fund schemes, quantitative evaluation of mutual fund
schemes, cut-off time regularations & time stamping, investment in mutual
funds through NSE, non-residential investment in Indian MF schemes,
investment by Indians in international MF schemes, SID, SAI, KIM & fact sheets
Module 2: Debt Market and Trading in Wholesale Debt Market (WDM)
Debt instruments: fundamental features, Indian debt markets: a profile, central
government securities: bonds, central government securities: t-bills, state
government bonds, bond market indices and benchmarks. Call money markets,
corporate debt: bonds, commercial paper & certificate of deposits, repos,
trading mechanism in the NSE-WDM.
Module 3: Valuation of Bonds
Valuation of bonds, yield curve and term structure of interest rates –
bootstrapping, alternative methodologies to estimate the yield curve, NSE ZCYC
52
(Nelson Seigel Model), duration, fixed income derivatives – interest rate futures,
swaps and guidelines.
Module 4: Regulatory framework and taxation of Mutual Funds and Debt
Regulations governing equity market and mutual funds. Introduction to
techniques of analysis in stock market and mutual funds like ratio analysis. An
introduction to income tax, capital gains having direct relevance for investment /
trading in stock market and mutual funds. G-Sec Act 2006; SEBI (Issue and Listing
of Debt Securities) Regulations 2008 and Market Practices and Procedures.
Suggested Readings:
• Mutual Funds: A Beginners’ Module, Workbook from NSE
• Mutual Funds (Advanced) Module, Workbook from NSE
• FIMMDA-NSE Debt Market (Basic) Module, Workbook from NSE