GITAM Institute of Management

GITAM University
2014-2015: IV Trimester
MPRBA-FM401: CAPITAL MARKETS
24
th
June 2014
Faculty: Leben Johnson
COURSE OUTLINE
INTRODUCTION
Capital or Financial Markets are the lifeblood of an economy and country. Capital markets help businesses to generate
funds from investors, for their ambitious projects, in return for a small ownership of their business, issued through shares.
Capital Markets Course is designed for those individuals, who plan to become financial analysts in organisations to help
them manage their capital more efficiently or within financial institutions that advice and manage client funds. This Course
will introduce the students to Capital Markets, focusing more on equities; provide exposure to ratios that explain the
financial soundness of a company. It is crucial to understand the fundamentals of how to take a business through Initial
Public Offering (IPO), the regulatory requirement and establishing the initial price of the stock through underwriting.

LEARNING OBJECTIVES
To understand the basic concepts of Financial - Managements, Planning, Forecasting, Systems, and Interpreting Financial
Statements, ratio analysis
To understand the basic concepts of Regulatory & Promotional institutions (RBI, SEBI)
To understand the basic concepts of Stock Markets and taking a business through IPO and Mutual Funds

Pedagogy
Lectures, Self-leaning, Workshop, Demo of Trading Systems at BSE and NSE.

Evaluation
5% - First Quiz
5% - Second Quiz
15% - Mid-term
5% - Attendance
10% - Case Analysis
60% - Term End Examination

Quiz
- Best two quiz marks will be considered of the three quizzes conducted, no make-up quiz will be conducted.
Students need to ensure they are present for atleast two quizzes.
- Quizzes are to be taken only in the computer room in the presence of faculty, passwords cannot be shared.

Weekly Sessions:
As this is a 3-Credit course, there will be three classes in a week. One class will be dedicated for two groups to present their
project reports to the class, along with recap of the self-learning topic of the previous week. Marks will be assigned for questions
asked and answered. Students are supposed to attend the class after having read the self-learning topic and have their
questions/doubts answered. The benefits for trimester style classes is continuous learning, which will only come with each
student coming prepared, interacting and sharing their thoughts.

TEXT BOOK
Khan, M. Y., Indian Financial Systems, 7th Ed., Tata McGraw Hill, New Delhi.

REFERENCES
Dr. S. Gurusamy, Capital Markets, 2nd Ed., Tata McGraw Hill, New Delhi.
Eugene F. Bringham and Joel F. Houston, Fundamentals of Financial Management, 12th Ed., Cengage Learning, New Delhi.
Uma, Sunil &Arti, Understanding Mutual Funds, Tata McGraw Hill, New Delhi.
ThummuluriSiddaiah, Financial Services, Pearson, New Delhi.

JOURNALS
Harvard Business Review, Harvard Business School, USA
Vikalpa, Indian Institute of Management, Ahmedabad
GITAM Journal of Management, GITAM Institute of Management, GITAM University, Visakhapatnam

Course Details: MPRBA-FM401: CAPITAL MARKETS



COURSE SYLLABUS

Unit I: Introduction to Financial Management & Systems: Principle and goals of Financial Management, risk-return trade off,
relationship of finance to economy and accounting, equilibrium in financial markets.

Unit II: The Regulatory Framework of Financial Markets in India: Analysis of financial ratios to gauge the markets, financial
planning, stocks and its valuation.

Unit III: Dividend Discount Model: P/E ratio approach, Preference Stocks; relationship between earnings-price ratio, expected
returns and growth; process of taking a business IPO, the minimum criteria, the regulatory framework, initial pricing of Stock
through underwriting, ADR, GDR.

Unit IV: Risk and return of a single stock: measurement of market risk, determinant of beta, relationship between risk and return;
dividend policy; Stock Indices.

Unit V: Mutual funds: Meaning, origin, types, importance, risk, selection of funds, Mutual Funds in India and their growth rate.


Session Plan: MPRBA-FM401: CAPITAL MARKETS


Week
Quiz/
Exam Marks Weekly Class Topics Pre-Class Self-Learning Topic
1
Schedule, Basic Concepts of Financial
System, risk-return trade-off Financial Systems
2
Recap, Indian Financial System, Regulatory
framework. Ratio Analysis
Indian Financial System, Regulatory
Framework
3 Quiz-1 5 Recap, Case-I, Financial Statements
Financial Statements, Ratio Analysis,
Case-I
4

Recap, Ratio Analysis, Stock Valuations Ratio Analysis
5 Quiz-2 5 Recap, Ratio Analysis IPO, ADR, GDR
6 Mid-Term 15 Recap, Dividend discount model, IPO Risk Return, market risk
7

Recap, ADR, GDR, Single stock risk return,
market risk, beta, stock indices Stock indices,
8

Recap, Case-II, Stock indices, Case-II
9 Recap, Mutual Funds Mutual funds
10 Quiz-3 Recap, Mutual Funds Mutual Funds
11

Case-III, Revision Case-III
12 Final 60



5 Attendance

10 Project/ Workshop

CASE Analysis
During the course 3-caseswill be reviewed. Cases will be distributed or uploaded into Xlearn. As these cases are under
copyright protection, no photocopies, scanning, photographs, uploading onto net, e-mail etc or duplication of any kind is
permitted, without explicit permission. These cases should only be used exclusively for this class.

For case preparation, students should read the case themselves, discuss in their individual groups and bring their analysis
and questions to the case presentation class. This will ensure the session is highly interactive. Students will be graded in the
class based on their participation. If the faculty feels that a person or team has not prepared adequately, they will be asked
to leave the class.