Investment Banking Firm – Overview, Functions and Benefits.

What is investment banking?

Investment banking is a separate division of the financial sector that arranges debt and deals in securities for all types of corporate organizations. Additionally, it is also responsible for providing other services such as financial advisory services and mergers and acquisitions etc. In simple words, we can sum up that investment banking firm work as a mediator between the corporates looking forward to expanding their business and potential investors.

In modern times the financial needs of business owners have increased tremendously. On top of that, handling such large finances requires the assistance of experts such as investment bankers. Thus investment banks come to the rescue of such people with huge capital needs and help them run their businesses smoothly.

Overview of investment banking firm.

While a commercial bank is essential in handling the day to day financial needs of the people/ entrepreneurs and provides the credit requirements, an investment bank works as the backbone of our economy for arranging funds through debt and equity. Capital assessment and price setting are two main contributions of an investment bank towards an increasing economy of any country.

Other than this, these firms keep the present and future needs in mind while performing their role.

Functions of an investment banking firm.

An investment bank performs a wide range of functions to support the economy. It is done by offering a number of services to their clients, such as assisting businesses in obtaining finances under debt financing and underwriting the stock issues. Mentioned here are some of the services offered by an investment banking firm.

• IPO: It is one of the main functions performed by an investment bank. IPO is an initial public offering that is issued with the assistance of an investment banking firm. The investment banks charge a fee in return for their services.
• Merger and Acquisitions: Another important role of working as an investment banker is dealing with the company's selling and buying shares, and acquiring/ selling stake in the company. All the steps involved in this process ranging from calculation of actual value to selling the assets, are taken care of by an investment bank.
• Reducing the Risk factor: Handling a business comes with its risks. One needs to find solutions for the recurring problems in order to prevent their business from coming to a standstill.

Furthermore, an investment banking firm supports such organisations in finding the problems and providing a solution.

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