EFIACSAAFIR-2022

LEARNET PUBLISHING

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Title of the book: Emerging financial issues and case study analysis- A Few Indian references

Edition: First- 2022

Copyright: Author- Suvendu Narayan Roy

by any means, electronic or, mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the copyright owner.

Disclaimer

The author is solely responsible for the contents published in this book. The publisher or editors do not take any responsibility for the same in any manner. Errors, if any, are purely unintentional and readers are requested to communicate such errors to the editors or publishers to avoid discrepancies in future.

ISBN: 978-81-957591-0-1

MRP: 500/- INR

PUBLISHER & PRINTER: E & O LEARNET 19/B, Kali Kumar Majumder Road P.O.-Santoshpur Avenue,Kolkata -700075 West Bengal Mob: +91-9836423405 E-mail:learnetpublishing@gmail.com

IMPRINT:LEARNET PUBLISHING

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Dedicated to LateDwijendra Narayan Roy(my beloved father) Lily Roy(my beloved mother)

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PREFACE

I have immense pleasure in publishing the book entitled ‘ Emerging financial issues and case study analysis- A Few Indian references’ for the Finance students and professionals which is a simple and lucid presentation, explanation and analysis of modern and emerging financial functions.The structure of my book is as follows:

Chapter 1: Asset Liability Management Chapter 2: Introduction to Financial system Chapter 3: Investment Banking Chapter 4: Forex Chapter 5: Corporate Restructuring Chapter 6: Financial Forecasting Chapter 7: Microfinance Chapter 8: Technical Analysis of Stock Chapter 9: Forwards-Futures-Hedging-Basis: Some Hints Chapter 10: Financial Evaluation of Lasing (Lease Vs borrowing) Chapter 11: Case study APPENDIX This book has been designed to equip the students pursuing study in Financial Management paper, with corporate exposure and need based practical knowledge. That is why we have kept emerging financial issues. This will help not only the students of this area but also the newly- joined corporate people who are working in the related areas. This book will enable the students of M. Com, CFA, ICAI, ICWAI and last but not the least, the MBA even BBA students of different B-schools and Universities across our country and of many more. The theories and concepts have been simplified and lot of illustrations have been backed up which will be absolutely need-based and also student-worthy. In this book, we have focused on how financial managers are using derivative products such as options, futures, swaps and forwards to eliminate financial risk. Besides showing financial analysis through solving case studies discussions also have taken place in the area of technical analysis so that we can offer the updated knowledge for that area which is continuing and perhapsthe most important for the students to work in there in near future. Extreme care has been taken while writing and editing this book. Still then, if there is any mistakeor error, I will be grateful to those readers, who shall draw attention of those mistakes to us. We also earnestly solicit suggestions and constructive criticisms from academic colleagues, students and other persons for improving the quality of this book in the next edition.

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Chapter 2: Financial System and Major Reforms-The Indian Example 18

Chapter 3 Investment Banking-With Reference To India Examples 54

Chapter 4 Forex 64

Chapter 5 Corporate Restructuring-With Reference To Indian Examples 77

Chapter 6: Financial Forcasting 100

Chapter 7 : Microfinance 113

Chapter 8 : Technical Analysis of Stock 122

Chapter 9: Derivatives: Forwards-Futures-Hedging-Basis: Some Hints 139

Chapter 10: Financial Evaluation Of Leasing (Lease Vs Borrowing) 150

Chapter 11: Case Studies 155

APPENDIX 194

REFERENCES 210

C hapter 1 A sset L iability M anagement

1.1 Concept and Definition In banking,asset and liability management is the practice of managing risks that arisedue to mismatches between the assets and liabilities (debts and assets) of the bank(Lysiaket al.2022).This can also be seen in insurance. Banks face several risks such as the liquidity risk, interest rate risk, credit risk and operational risk. Asset Liability management (ALM) is a strategic management tool to manage interest rate risk and liquidity risk faced by banks, other financial services companies and corporations. Banks manage the risks of Asset liability mismatch by matching the assets and liabilities according to the maturity pattern or the matching the duration, by hedging and by securitization. Much of the techniques for hedging stem from the delta hedging concepts introduced in the Black-Scholes model and in the work of Robert C. Merton and Robert A. Jarrow. The early origins of asset and liability management date to the high interest rate periods of 1975-6 and the late 1970s and early 1980s in the United States. Asset-liability management(ALM) is a term whose meaning has evolved....