Say, a PE fund comes to an I-bank with a hypothesis: "IndianShipping sector is the next big thing to invest in near future"How to go to validate this hypothesis. And if got validated, how the i-Bank analyst go ahead to find a possible M&A, or investment strategy to help that PE fund/MNS to establish itself in India?
This calls for a lot of fundamental analysis ...
1. Start with the govt. website of the shipping ministry or the annual reports stack of the top few shipping companies ... look at the published reports and data ...
2. Judge the demand supply equation to assess the pricing environment ...
3. Interview prominent players to validate your thoughts and to get an idea of what the industry players have planned aheadAfter these exercises, u would be confident about the health of the sector.
For M&A targets,
1. Check the legal environment as to what is allowed and not allowed ...
2. Then based upon clients requirements or perceived environments, select a M&A target
3. Once a target is selected, do a full due diligence exercise; also find out how to woo it listed and private companies would have separate strategies
4. Then comes the valuation part ... where analysts come in
5. After the valuation is agreed upon, again you'll have to convince theregulators/govt bodies.6. Once all approvals are in place, the relationship will have to besolemnized by the shareholders/stakeholders
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