Code
1.
Questions
Brief out any five fund based
financial services with examples
in India.
2.
What are the guidelines for
Venture capital Funds in India,
according to SEBI Regulations
for Venture Capital Funds,
1996?
3.
What do you mean by BookBuilding? Explain the methods
and guidelines set up by SEBI.
4.
Explain in brief about the various
schemes of mutual funds with
examples.
5.
Briefly explain the Credit Rating
Agencies (CRAs) in India.
FW15 – MA0041
Answers
Fund based financial services in India are: any five
i)
Lease financing: Meaning, example
( 2 Marks)
ii) Hire Purchase: Meaning, example
( 2 Marks)
iii) Factoring: Meaning, example
( 2 Marks)
iv) Forfeiting Meaning, example
( 2 Marks)
v) Venture Capital Meaning, example
( 2 Marks)
vi) Consumer Service
vii) Insurance Services
Total: 10 Marks
The main guidelines are under the five headings.
i)Registration of Venture capital fund
(2 Marks)
ii)Eligibility criteria
(2 Marks)
iii)Procedure for grant of certificate
(2 Marks)
iv)Minimum investment in a venture capital fund
(2 Marks)
v)Investment conditions and restrictions
(2 Marks)
Total: 10 Marks
a) Meaning of Book Building: is the process through which the prices of
securities being issued are obtained through the demand of market.
Through this mechanism companies can raised capital from the
general public by offering IPO as well as FPOs.
( 2 marks)
b) Methods and Guidelines for Book Building
two ways
b.1) 75 per cent- offer through prospectus.
(4 marks)
b.2) 100 per cent- if the issue size is above 25 crore.
(4 marks)
Total : 10 Marks
a) There are various schemes to satisfy investor’s objectives with their
diverse risk appetite.
a.1 Structure of mutual funds
open ended scheme-meaning, advantage, examples
(1 marks)
Close ended scheme- meaning, advantage, examples
(1 marks)
Interval scheme- meaning, advantage, examples
(1 marks)
b) Types of mutual fund schemes
i)Equity funds- meaning, advantage, examples
-Large,mid and small cap
-Diversified and sector specific..
-income/dividend yields
-ELSS
-Rajiv Gandhi Equity saving Scemes
any three
(3 marks)
ii)Debt funds- meaning, advantage, examples
(1 marks)
iii)Balanced funds- meaning, advantage, examples (1 marks)
iv)Hybrid funds- meaning, advantage, examples (1 marks)
v)Exchange traded funds- meaning, advantage, examples
(1 marks)
Total : 10 Marks
Note: Marks will be given for the examples.
(Student to explain any 5 CRAs–2 Marks each)
SMALL & MEDIUM ENTERPRISES RATING AGENCY (SMERA): is
the country’s first rating agency that focuses primarily on Indian Micro,
Small and Medium Enterprise segment. Its primary objective is to
provide ratings that are comprehensive, transparent and reliable.
CREDIT RATING INFORMATION SERVICES OF INDIA LTD
(CRISIL): The concept of credit rating was started by CRISIL. It was set
up in 1987 and started functioning n January 1988. CRISIL enjoys 70%
share of the Indian ratings market and hence is the preferred choice for
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6.
Identify the different types of
mergers.
FW15 – MA0041
issuers and investors.
INVESTMENT INFORMATION AND CREDIT RATING AGENCY
(ICRA): was set up in1991 by leading financial/investment institutions,
Commercial banks and financial services companies as an
independent and professional investment information and credit rating
agency.
CREDIT ANALYSIS AND RESEARCH IN EQUITY (CARE):
commenced operations in 1993 and in nearly two decades it has
established itself as the second largest CRA in India. It was promoted
by IDBI jointly with investment institutions, banks and finance
companies.
FITCH INDIA: John Knowles Fitch is the founder of Fitch Publishing
Company which later became recognized as Fitch ratings. It was
established on December 24, 1913. In 1924, it became the first
company to present the AAA to D rating scale to fulfill the increasing
requirements for autonomous analysis of financial securities.
BRICKWORK INDIA: Vivek Kulkarni, the former IT Secretary, GOI was
the founder of Brickwork India. This brought about development in
Karnataka. Consequently the state is able to generate over 200000
jobs every year.
ONIDA INDIVIDUAL CREDIT RATING AGENCY IN INDIA (ONICRA):
is the first rating agency to introduce the concept of individual credit
rating. It rates the risk associated with an individual at a particular point
of time. It assesses the default risk of the individual.
(Student to explain any 5 types–2 Marks each)
HORIZONTAL MERGER: When two firms are engaged in the
same/competitive business then it is called as horizontal merger or
horizontal integration. The purpose of this merger is to control the
market by creating a monopoly.
VERTICAL MERGER: When two firms merge and both are ar different
stages of production process or individual process, it is called vertical
merger or integration.
CONGLOMERATE MERGER: When the two firms which merge are in
diverse businesses it is known as Conglomerate merger. The basic
purpose is to benefit from the diversification and obtain a large
customer base for all the products manufactured by both the
companies.
CONGENERIC MERGER: When the two merged firms have no
common distribution network or customer-supplier network, it is known
as congeneric merger. The basic purpose is to broaden the distribution
channel for the combined companies.
CASH MERGER: If any one of the merged company’s shareholders is
against the merger of the companies then those shareholders get cash
in place of their shareholding and do not stay as shareholders of the
merged company.
TRIANGIULAR MERGER: Under this type of merger, the target
company merges with the subsidiary of the acquirer company. As three
parties are involved in the agreement, it is called Triangular merger.
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