Financial Institutions and Markets — DU B.A. (Hons.) Business Economics (BBE) Previous Year Question Papers

Non-Performing Assets (NPAs) are a major concern for banks as they directly impact profitability, liquidity, and overall financial stability'. In this context, explain the meaning of NPAs and discuss their types and classification. Further, analyse the tools and mechanisms available to banks for managing and resolving NPAs, highlighting their significance in improving asset quality and recovery of dues. Q2 (a) The following bids have been received in respect of an Initial Public Offer (IPO) under the book-building process. The issue is oversubscribed. The company proposes to determine the issue price applying Weighted Average Method. You are required to: 1. Compute the cut-off price based on the Weighted Average Method. 2. Identify the investors who qualify for allotment. 3. Determine the number of shares to be allotted to each successful investor. Number of Shares Bid Price (2) Additional Information: Total shares demanded = 400 shares Total shares available for allotment = 120 shares (b) A company makes an IPO of 10,00,000 shares at R120 per share. The issue is oversubscribed three times. Promoters lend 15% shares under GSO. After listing, the market price falls to 2100 and the Stabilising Agent buys 1,00,000 shares from the market. Stabilising expenses are 730,000. Prepare a GSO statement. i. Shares lent by promoters ii. Funds in GSO Bank A/c iii. Market purchase in Rs iv. Balance amount in Rs v. New shares issued vi. Amount to company vii. Amount transferred to IPEF vili. Explain what SA will is expected to do, If market price falls, rise or remain equal to IPO price. (10,8 Marks) Q3 (a)Describe the different types of public issues available to companies in India for mobilising capital from investors, explaining the key features of each method. (b)Discuss the concept and types of delisting of securities in India, highlighting the key features of each. Q4 (a) Three scripts X, Y, and Z constitute a stock index. The number of outstanding shares of these companies are 400, 600, and 500 respectively. The base period prices of the three scripts are 245, 260, and 855 respectively, while their current market prices are 7135 for X, 2180 for Y, and 2220 for Z. Company Y announces a rights issue under which shareholders are allowed to buy 1 additional share for every 3 shares they already hold. Using the S&P methodology, determine the impact of this rights issue on the value of the index. (b) During the early 1990s, a stockbroker exploited loopholes in the banking system to divert funds into the stock market. This led to an artificial rise in stock prices, creating a massive bull run. Eventually, the scam was exposed, causing a sharp market crash and heavy losses to investors. 1. Identify the type of scam highlighted in the case. 2. How did the misuse of the banking system contribute to the scam? 3. What were the major impacts of this scam on the Indian financial system?