The students of TAPMI were a part of an enthralling session on Financial Services Valuation by Mr. Sreenivas Kunte, Director of content, CFA institute. After an introduction by Professor Jadhav, Mr. Kunte commenced his session by sharing with students, his worship of the widely read Damodaran in the world of valuation. He started off by discussing the basics of capital markets – what they are, the constituents and participants. He spoke about the broad categories of financial services (banks, insurance, asset management and brokers), their business models and their streams of revenue. He also briefly touched upon a few topics revolving around the trends and happenings in some select sectors.
He then went on to discuss how the balance sheet of non-financial enterprises is structured. He listed the broad components and categorized them into assets and liabilities. He then discussed the components of a bank’s balance sheet. He brought out the differences between the assets and liabilities of a bank as compared to a non-banking company. The integration of the explanation of the banking and business and the assets and liabilities gave a very strong sense of understanding.
He then moved on to more specific issues like the cost of equity, leverage, beta and so on. He discussed the types of valuation. He spoke about different approaches to issues and how to modify our views depending on the circumstances. He also discussed the various methods of valuation (based on FCFE, relative valuation etc.). Overall, it was a very interactive session which brought different perspectives and made participants reflect a lot. It ended with Mr. Kunte answering questions and clearing doubts of students.