How the Investment Banking Sector Hugely Impacts Investments?

On of the most sought after and discussed topics today in any kind of finance newspaper and discussion in investment banking. But what exactly does investment banking really mean? Let’s look at it today. An investment bank is a company or an institution which plays categorically many roles when it comes to the world of finance and investments.  Some of the major functions that an investment bank indulges in are underwriting of stocks, being the facilitator of mergers and acquisitions and the topmost being the financial advisor to High Net Individuals. High Net Individuals are the people whole net worth runs in millions. Interestingly, HNI’s do not have to be limited to just individuals. They can also be government firms. An investment bank typically helps a firm, or an individual achieve its high financial goals, which also becomes a matter of prestige for the company itself. The investment that we are talking about here, aren’t in small numbers, but in lakhs and crores, that are guaranteed to give them high returns. Some of the big names in investment banking companies are Bajaj Capital, Kotak Mahindra Capital, SCI Capital Markets, Yes Bank, JP Morgan, Chase and HSBC and many more names.

Some of the various functions that are done by the investment banking companies in India in India are Underwritings of Public Offerings, Management of Risk and easing the process of Mergers and acquisitions.

Underwriting of Public Offerings in simple terms is the amount that is raised for investment, by the investment and asset management companies in India on behalf of big corporations and the government of India, that issue securities (both capital and debt capital). Management of risks, as the name suggests is the scrutinizing of the entire financial market and then selecting the best out of the lot for your client by anticipating the risk to come. The look for all the loop holes and risk that the investment may face in future and then accordingly, advice the client, or sometimes, take decision on their behalf regarding some financial plans. In Mergers and Acquisitions the bank can play either of the two roles. One is being the representative of the seller or the representative of the buyer. The investment bank in this transaction helps by overseeing the entire process, ensuring everything is done properly and fairly. Banks could even approach companies with their own marketing tactics.