We bring to you the February 12 issue of Indian Journal of Finance. This issue carries 7 papers from diverse fields of Finance. Readers are requested to join us on Facebook and Linkedin, to facilitate enhanced interaction. We look forward to receiving your submissions and to receiving feedback.

Firms can raise capital through either debt or equity. Firms hit capital market to raise money through equity. IPO issue price can be determined by fixed price method or book building method. Raising money by offering Initial Public Offering (IPO) has proven to be an effective mechanism for firms. A firm with the help of underwriters fix the issue price usually, ‘leaving enough on the table’. This IPO underpricing has been well documented by various researchers across the globe. This phenomenon and the absence of any trading history make it difficult to determine the fair price of the stock. In the present paper, "IPO Volatility In Indian Markets" , the researchers seek to find out the time it takes for the Indian IPOs to reach a fair price by taking a look at the volatility figures (variation between day’s high price and day’s low price) and the volume figures for the initial trading sessions of a newly listed issue.

A well-developed banking system is a pre-requisite for the smooth and effective functioning of an economy, and for the efficient allocation of the country’s assets. The basic task of any banking organization is it to mobilize savings from the investors’ community, and channel these savings to high – yielding projects. The fundamentals of most of the banks in the world are based on interest charged on loans and interest paid on deposits. Islamic banking is based on Islam’s Shariah principles, and according to this; interest (Ribah) in any form is unlawful, and the borrower must not bear all the risks/ costs of a failure, resulting in a balanced distribution of income and not allowing the lender to monopolize the economy. The paper, "A Suitable Lawful Structure For Introduction Of Islamic Banking In India: An Outline" examines the Islamic Banking system on a domestic level in comparison to the global level , as well as compares the same to the conventional banking system.

Investment is the commitment of funds in the expectation of some positive rate of return. As a major component of the Keynesian macroeconomic model of income determination, it is a sine-qua-non for economic development. Generally, investment is distinguished from speculation by the time horizon of the investor, as well as the risk-return characteristics of the investment. The objective of the paper, “Macroeconomic Determinants Of Stock Price Changes: Empirical Evidence From Nigeria” was to determine whether selected macroeconomic variables, interest rate, inflation rate, and exchange rate, affect stock price movements.

Solvency or Liquidity refers to the ability of a concern to pay in cash its current obligations when they become due for payment by realizing amounts from current assets. Liquidity implies conversion of current assets into cash during the normal course of business, and to have regular uninterrupted flow of cash to meet outside current liabilities as and when due and payable. It also ensures availability of money for day-to-day business operations. It is an attribute that signifies the capacity to meet current financial obligations as and when required. The paper, "Dr. Reddy's Liquidity Management And Trade-off Between Liquidity, Risk And Profitability : An Empirical Study" is based on different measures to assess the qualitative efficiency of liquidity management and trade-off between liquidity, risk and profitability with reference to the company - Dr. Reddy’s Laboratories.

The dominating industry in the financial sector of Bangladesh is the Banking Industry. Bangladesh Bank (BB) continues to focus on strengthening the financial system of Bangladesh and improving functioning of its various scheduled banks and financial institutions. The importance of a bank’s financial performance and profitability is appraised at both, the micro and macro level of the economy, since it is one of the most important sources of finance for enterprises in Bangladesh. The empirical study, “Determinants Of Bank's Profitability: Evidence From Bangladesh" was conducted on randomly selected six commercial bank of Bangladesh. This study uses widely used determinants of banks’ profitability which are ROA, ROE and ROD, and these are also commonly used criterion of Bangladesh Bank to evaluate banks’ performance. In addition, this study evaluates the efficiency ratio, asset utilization ratio, asset size and ROD as a determinant of banks’ profitability measured by ROA.

The National Bank for Agriculture and Rural Development (NABARD) piloted the SHG-bank Linkage Programme in the year 1992, with an objective to provide poor rural households access to banking services, and since then, the programme has grown in an exponential manner, particularly during the past five years or so. SHGs are now seen as an essential and integral part of financial and non-financial services delivery system within the larger objectives of the growth of income, livelihoods promotion, community development and women’s empowerment. The paper, “Assessing Income Generation From SHG Micro Enterprises: A Study Of A Backward Region Of Assam” examines the level of income generation of the SHG members from their micro enterprises and attempts to identify proximate determinants of the same. The study is based on the field survey in four Development Blocks of the Karimganj District of Assam.

Fundamental analysis is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices. It is a process of looking at a business at the fundamental financial level. It is a three-step examination, which calls for understanding the macro-economic environment and developments, analyzing the prospects of the industry to which the firm belongs, and assessing the projected performance of the company. The paper, “Intrinsic Value Estimation Through Fundamental Analysis: A Case Study Of Dr. Reddy's Laboratories Ltd., Hyderabad” analyses the earnings (and dividends), growth, risk, and valuation and uses this as a foundation for developing the forecasts required for estimating the intrinsic value of the stocks of Dr. Reddy's Laboratories Ltd.
Mrs.S.Gilani
Editor, Indian Journal of Finance