INTERNATIONAL

BUSINESS
PRESENTED BY:
GROUP 8
SONAL JAIN
MONA GOGAR
AASTHA AGGARWAL
FINANCIAL MARKET
• Efficient transfer of resources from those
having idle resources to others who have a
pressing need for them is achieved through
financial markets.
• Stated formally, financial markets provide
channels for allocation of savings to
investment.
MONEY MARKET
• The Money market refers to the market where
borrowers and lenders exchange short-term funds
to solve their liquidity needs.

• Money market instruments are generally financial

claims that have low default risk, maturities under
one year and high marketability.
INSTRUMENTS TRADED IN
MONEY MARKET
TREASURY CALL/NOTICE
BILLS MONEY

COMMERCIAL CERTIFICATE
PAPER OF DEPOSITS

COMMERCIAL
BILLS
 TREASURY BILLS

• A treasury bill is a particular type of finance bill or a

promissory note put out by the government of the
country.

• Treasury Bills are highly liquid because there cannot be a

better guarantee of repayment than the one given by the
government.
CALL MONEY MARKET
• Call Money Market is that part of the national money
market where the day-to-day surplus funds, mostly of
banks are traded in.
• The loans made in this market are of a short-term nature,
their maturity varying between one day to a fortnight.
• The nature of this market in different countries varies from
each other. Differences in institutional structures account
for the differences in the nature, participants, purposes or
types of transactions in such markets.
• All, however, have one common feature: they deal in loans
which have a very short maturity and are highly liquid.
COMMERCIAL PAPER

• CPs are short-term promissory notes with fixed maturity issued

mostly by the leading, nationally reputed, credit-worthy, and highly
rated large corporations.

• Any person, bank, company, incorporated and unincorporated bodies,

and NRIs can invest in CPs.

• Interest rates on CPs are market-determined. The cost of CP finance is

lower than or comparable to that of bank credit.
 CERTIFICATE OF DEPOSITS
• Certificate of Deposits (CDs) are marketable receipts in bearer or
registered form of funds deposited in banks for a specified period at a
specified rate of interest.
• They are transferable, negotiable, short-term, fixed-interest bearing,
maturity dated, highly liquid and riskless money market instruments.
• Banks issue CDs to compete with other financial intermediaries and to
counter the process of securitization.
• CDs can be issued to individuals, corporations, companies, trust, funds,
associations and NRIs.
• The maturity period of CDs varies between three months to one year.
• The rate of interest on CDs is also market-determined and it is more
attractive than that on bank deposits.
COMMERCIAL BILLS
• According to the Indian Negotiable Instruments Act,
1881, it is a written instrument containing an
unconditional order, signed by the maker, directing a
certain person to pay a credit sum of money only to,
or to the order of, a certain person, or to the bearer
of the instrument.
• A commercial bill or bill of exchange is a short-term,
negotiable, and self-liquidating money market
instrument.
• It is an asset with a high degree of liquidity and a low
degree of risk.
CAPITAL MARKET
• Capital Markets deal in long-term claims
(maturity period above 1 year).

• Capital markets channel the wealth of savers to

those who can put it to long-term productive
use, such as companies or governments
making long-term investments.
INSTRUMENTS TRADED IN
CAPITAL MARKET
EQUITY SHARES

PREFERENCE SHARES

DEBENTURES

BONDS
PREFERENCE SHARES
• Preference shares allow an investor to own a stake at the issuing
company with a condition that whenever the company decides to
pay dividends, the holders of the preference shares will be the first
to be paid.
• Dividend payment of the preference shareholders is fixed and if
somehow company liquefies, the owners of the preference shares
will be the first one to get their money back after the company has
paid back its debt.
• Thus, preference shares are those shares which full-fill both the
following two conditions:
I. They carry preferential share right in respect of dividend at a fixed
rate,
II. They also carry preferential right in regard to payment of capital on
winding up of the company.
EQUITY/ORDINARY SHARES
• Shares which do not enjoy any preferential right in the payment of
dividend or repayment of capital, are termed as equity/ordinary
shares.
• The equity shareholders are entitled to share the distributable profits
of the company after satisfying the dividend rights of the preference
shareholders.
• The dividend on equity shares is not fixed and it may vary from year to
year depending upon the amount of profits available for distribution.
• The equity share capital may be
(i) with voting rights; or
(ii) with differential rights as to voting, dividend or otherwise in
accordance with such rules and subject to such conditions as may be
prescribed.
DEBENTURE
• The word ‘debenture’ has been derived from a Latin word
‘debere’ which means to borrow.

• Debenture is a written instrument acknowledging a debt

under the common seal of the company.

• It contains a contract for repayment of principal after a

specified period or at intervals or at the option of the
company and for payment of interest at a fixed rate payable
usually either half-yearly or yearly on fixed dates.
 BOND
• A debt investment in which an investor loans money to an
entity (corporate or governmental) that borrows the funds
for a defined period of time at a fixed interest rate.

• Bonds are used by companies, municipalities, states and

federal governments to finance a variety of projects and
activities.
INDIAN COMPANIES ISSUING
FINANCIAL INSTRUMENTS
BHARTI AIRTEL

YES BANK

INFOSYS

STATE BANK OF INDIA

BAJAJ FINANCE LIMITED

 BHARTI AIRTEL
• Bharti Airtel Limited also known as Airtel is an Indian
global telecommunications services company based in Delhi ,
India.
• It is the second largest mobile operator in India.
• Founded on 7th July, 1995.
• Founder : Sunil Mittal.
• Industry type : Telecommunication
This company issues only capital market instruments.
 YES BANK
• Yes Bank Limited is India’s fourth largest private sector bank.
• It primarily operates as a corporate bank, with retail banking and
asset management as subsidiary functions.
• Founded on 2004
• Founder : Rana Kapoor and Ashok Kapoor
• Industry Type : Banking and Financial services.

This company issues both capital & money market

instruments.
 INFOSYS
• Infosys Limited is an Indian multinational
corporation that provides business
consulting, information technology
and outsourcing services.
• It is the second largest IT Indian company.
• Founded on 7th July , 1981
• Industry Type : IT services and IT consulting.
This company issues only capital market
instruments.
 STATE BANK OF INDIA
• The State Bank of India (SBI) is an
Indian multinational , public sector banking
and financial services statutory body.
• It is a government corporation statutory
body headquartered in Mumbai ,
Maharashtra.
• Founded on 1st July , 1955.
• Industry Type : Banking , Financial services.

This company issues both capital & money market

instruments.
 BAJAJ FINANCE LIMITED
• Bajaj Finance Limited, a subsidiary of Bajaj
Finserv is an Indian Non-Banking Financial
Company (NBFC).
• The company deals in Consumer Finance,
SME ,Commercial Lending , Wealth
Management.
• Founder : Rahul Bajaj
• Headquarters : Pune , India

This company issues both capital & money market

instruments.
INTERNATIONAL
MARKET
INSTRUMENTS
 INTERNATIONAL MONEY MARKET
INSTRUMENTS
• Treasury Bills
• Commercial papers
• Banker’s acceptance
• Certificate of deposits
• Repurchase agreements
• Treasury Bills - short-term obligations issued by
the U.S. Government.
• Commercial Paper - short-term unsecured
promissory notes issued by a company to raise short-
term cash.
• Banker Acceptances - time draft payable to
seller of goods, with payment guarantee by bank.
• Negotiable Certificates of Deposit - negotiable
bank-issued time deposit with specified interest rate
and maturity.
• Repurchase Agreements - agreement involving
the sale of securities between parties with a promise to
repurchase the security at a specific date and price.
 INTERNATIONAL CAPITAL MARKET
INSTRUMENTS

• Global Depository Receipts (GDRs)

• American Depository Receipts (ADRs)
• Foreign Currency Convertible Bonds (FCCBs)
• External Commercial Borrowings (ECBs)
• GDRs - An instrument which allows Indian Corporate,
Banks, Non- banking Financial Companies etc. to raise
funds through equity issues abroad to augment their
resources for domestic operations.

• ADRs - A negotiable certificate issued by a U.S. bank

representing a specified number of shares (or one share) in
a foreign stock traded on a U.S. exchange.

• FCCBs - A type of convertible bond issued in a currency

different than the issuer's domestic currency.

• ECBs - A financial instrument used to borrow money from

the foreign sources of financing to invest in the commercial
activities of the domestic country.
 IMPACT ON
INDIAN MARKET
IMPACT OF MONEY MARKET
INSTRUMENTS

Encouragement to Controls the price line of

savings and investments the economy

Helps in correcting the

Regulates the flow of
imbalances in the
credit and credit rates
economy
Optimal allocation of risk

Quantum of liquidity in banking system

Producing information and allocating capital

IMPACT OF CAPITAL MARKET
INSTRUMENTS
ADRs
• Exposure to international markets and hence stock prices
in line with international trends.
• Increased recognition internationally by bankers,
customers, suppliers etc.
ECBs
• ECBs provided opportunity to borrow large volume of
funds
• Enable the corporate to have foreign currency to meet
the import of machineries etc.
GDRs
• It helped Indian companies is getting international
attention and coverage.
• It gave access to foreign capital markets.
• The valuation of shares in the Indian market increased,
on listing in the international market.
FFCBs
• FCCBs allowed Indian companies to raise money outside
the home country there by enabling tapping new
markets for investment options.
• Issuing bonds in foreign currency in a foreign market
may always be exposed to a legal, political and economic
risk of that foreign country. So, it raised that risked for
Indian companies
THANKYOU