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1st Supervisor: Professor Sushanta Mallick2nd Supervisor: Dr. Deven Bathia
"The impact on firm value of the usage of financial derivatives by Indian Corporates"
As a banker over last 2 decades, I was involved in sale of financial derivatives to corporates on a regular basis. Although the sales process added value to the bank by making commission on the sale, whether it added any value to the corporate on a consistent basis, remained a key open question. In my new role as a research scholar, I intend to find out the answer to this question.
My research proposes to analyse the use of Derivatives by Indian Corporates for hedging and risk management purposes and tries to ascertain the effect, if any, of the same on the firm value.
Subsequently, the research also proposes to analyse in depth different risks hedged through these derivatives, i.e. Foreign Exchange, Interest Rate, commodities etc and the types of derivatives used i.e. forwards, options, swaps etc, and establish if there is any individual correlation of these to the firm value. In addition, the research also proposes to breakdown the analysis based on the nature of companies i.e. industry classification, exporter/importer, size etc.
Lastly, if the research is able to establish the value creation through the use of derivative, the research would try to identify the best methods and instruments to be used for hedging for maximizing the value of the firm.
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