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Fixed Income markets, Financial Markets and Institutions.

This case can be used in a postgraduate finance course such as an MBA and executive program for courses such as Fixed Income Markets and Financial Markets and Institutions.

In late August 2015, the sudden downgrade and eventual default of Amtek AUTO Ltd (Amtek) on its debentures upset mutual fund investors and regulators. Questions were raised about the credit rating agencies and their lack of timely action as well as about the independent credit analysis followed by fund houses to protect the interests of investors. One such investor, Suresh Nair, decided to gather all possible available information on Amtek to determine whether it was sheer negligence on the part of all parties involved or if Amtek was in fact in a situation of sudden distress. The case seeks to highlight the credit analysis process, while looking out for red flags to identify potential default or financial stress in a company.

To understand the credit analysis process through a fundamental analysis process. To analyze and interpret the financial position of the company through various financial ratios. Identifying “red flags” while evaluating a potential credit that pose as “risks” to credit assessment. Understanding the role and relevance of credit rating agencies in the bond market.

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The learning outcomes are as follows: to be able to evaluate early warning signs/red flags through financial statement analysis; to be able to analyse company’s credit or debt servicing using a thorough process of fundamental analysis; to be able to analyse and decode the financial health of an organization through different financial tools applicable according to the industry such as default probability and financial ratios; and to be able to synthesize credit rating framework and role of credit rating agencies in the bond market.

In late January 2019, the allegation by an online investigative portal about the misuse of the Dewan Housing Finance Corporation Ltd. (DHFL) money by its promoter for buying asset abroad was the start of the fall of the non-banking finance company giant. This was followed by a series of downgrade by credit rating agencies on its debt and eventual default on its interest payment on 4 June 2019 which upset multiple portfolio investors and the regulators. Investors became sceptical about the regulator’s policy and inefficiencies of credit rating agencies in predicting the default along with asset management houses which were expected to guard investors’ interest. One investor, Shikhar Pachori, decided to scrutinize all hidden information on DHFL to investigate if DHFL crisis arises because of unknown factors which was not in control of management or if it a clear negligence on the part of all involved parties. The case tries to emphasize the aspect of Asset-Liability Management and process of credit analysis while looking for red flags which aids in identifying any stress in company’s financial or any potential default by company.

This case can be used in the advance level of post-graduate finance course or MBA program for elective/specialization courses such as Financial Statement Analysis, Financial Institutions and Market and Fixed Income.

Teaching notes are available for educators only.

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Kaleidofin was co-founded in 2017 by Puneet Gupta and Sucharita Mukherjee; former CFO and CEO of IFMR (Institute for Financial Management and Research) Holdings Pvt Ltd. As part of their roles at IFMR, Gupta and Mukherjee focused on designing products and developing technology to push for financial inclusion. In their field interactions, the co-founders had an epiphany of the challenges faced by people while trying to save towards important life goals. They saw an opportunity in the large segment of financially under-served people in India and quit their jobs to start Kaleidofin. Kaleidofin was conceptualised as a digital platform that offers customised financial solutions to help customers meet their life goals. The start-up partnered with mutual fund companies for solutions on one hand and network partners (NGOs, microfinance organizations, cooperative banks) on the other for access to their existing customers.

Kaleidofin grew from 50 customers in January 2018 to 15,000 customers by March 2019. Aiming to grow to 1 million customers in the next 30 months Kaleidofin faces a dilemma about its future course. The start-up could continue to grow by expanding its current target segment which is the low-income households and preserve its vision at the risk of increasing costs. The second option would be to look at other potential target segments, such as, middle-income households and risk diluting their vision. The case study highlights the unique customer-centric model of Kaleidofin and the need for start-ups to understand the value proposition of their products/services.

The case provides an opportunity to the students to learn some of the analytical processes in making a credit decision, including interpretation of financial ratios for credit analysis, forecasting a stress scenario, analysing cash flow adequacy, assessment of financial flexibility and, finally, recommend a credit decision.

The case discusses the analytical challenges facing a bank credit officer while assessing the credit quality of Kwality Ltd., an India-based dairy product manufacturer. Kwality Ltd. had undertaken a significant capacity expansion and business transformation to strengthen its market position in value-added dairy products business and improve its profit margins. The capacity expansion had recently been completed and the management, credit rating agency, equity analysts and investors appear to be optimistic regarding the company’s prospects. However, the capital investment had been almost entirely debt-funded and large long-term debt repayments would have become due shortly. The company had also built up large trade receivables. The banker had to assess if Kwality would be in a position to repay its debt and should his bank increase working capital disbursement to the company.

Complexity: Academic level. Applicability: MBA, Executive MBA.

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The learning outcomes of this study are to gain an understanding of the banking regulations and their impact on banking performance, to understand the intermediation role of banks by channelizing depositors’ savings and providing loans to borrowers, to explain an impact of a recent regulatory change in the Indian banking that directly impacts their financial performance, to critically evaluate the different financial ratios to analyze the performance of a bank and to build a DuPont analysis framework for banks.

The case serves as a primer on banking regulations in India and provides insights into banking performance. Banking regulations play an important role in maintaining financial stability, specifically in emerging economies like India. The protagonist of the case is Salil Kumar who presented his internship project to the review committee of Stock Investment Company on April 16, 2021. However, he had to rework and present his final project within seven days on the basis of the feedback received from the committee. Kumar faced the dilemma of bringing together a comparative study across two banks, namely, Industrial Credit and Investment Corporation of India (ICICI Bank) and State Bank of India (SBI) and building a DuPont framework covering the different aspects of banking performance. The case exemplifies the intricate regulatory landscape in India within which banks operate and highlights the recent alterations introduced by the Reserve Bank of India. For instance, the framework for dealing with domestic systemically important banks (D-SIBs) was introduced in 2014 and subsequently adopted in August 2015. The D-SIB framework provides inherent guarantee to large banks such as ICICI Bank and SBI. This ensures government backup in the event of any failure, thereby securing financial stability. The case study is suitable for banking and financial accounting courses taught in postgraduate management programs. Once the case is studied, the students are expected to understand the basics of banking, regulations, impact of regulations on banking performance and financial measures.

The case provides valuable insights into the intricate dynamics of the banking industry, offering a critical perspective for analysis. A well-structured teaching note would serve as a valuable tool for instructors, allowing them to facilitate engaging classroom discussions and effectively guide students toward achieving the desired teaching objectives.

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The case is based on data collected from in-depth interviews, and from company, third-party and regulatory–agency documents. In addition to prior conversations over several years between the company founders and the lead case writer, there were several rounds of interviews in 2023 with the surviving founder and in-depth interviews with eight of the company’s key managers. Company documents reviewed included bylaws, organization charts, profit and loss statements and staffing statistics, all from founding to sale. Also reviewed were documents and evaluations of company operations and performance produced by the merger & acquisition firm that handled the company’s eventual sale. The company owner insisted on complete disguise of the company and all its members and prohibited disclosure of detailed proprietary financial data.

At the strategic level, this case is about how the unique, complex and changing healthcare environment created opportunities and threats to which a women-owned and run start-up company, Aloe Health (AH), had to respond to become and remain successful. At the personal level, the case illustrates what it takes for an entrepreneur and leader having clinical but no real business acumen to start, expand and turn around a company and ultimately position it for a successful acquisition, continually learning and adapting along the way.

The case describes how two women who were friends for many years started up a home healthcare company later in their lives and grew it into the largest women-owned business of its kind in the USA. Based in the Southwest USA, an area with many factors conducive to success, they navigated the many complexities of US Medicare regulations to create a fully-integrated home healthcare company providing unskilled personal care, medically skilled homecare and end-of-life hospice services to thousands of clients. The case provides background on the founders and the home healthcare industry context, and details the steps taken to start up and build the company into a fairly successful enterprise; one of the largest of its kind in the region. The (A) case ends with one of the founders facing a crisis brought on by the death of her co-founder and the revelation of some significant organization dysfunctions, leaving her unable to profitably exit the company and unsure of whether she would be able to turn things around. The students are tasked with making recommendations for what she should do next.

The (B) case brings events up to fall 2023, describing the steps the surviving founder took to transform her leadership style and the company’s systems and culture, and to navigate the due diligence process associated with preparing for an (ultimately very successful) acquisition. It also shares the owner’s “lessons learned,” and briefly notes the current state of the acquired company and the many AH employees that it continues to employ.

The case provides ample information for students to appreciate the company’s strategy and the challenges of operating in the highly regulated health care industry. However, it is probably even better suited to illustrating the “soft” issues of new-venture management, such as the tendencies of founders to overload themselves by micro-managing their growing venture and not adapting to expansion, and for those with clinical backgrounds to focus on caring for patients and employees while overlooking business essentials and organization systems. It also illustrates how business partnerships among strong-willed individuals can produce dynamics in the founding team similar to a “marriage,” with affection and complementary talents, yet also tensions. It further illustrates the process of a successful turnaround strategy, and the “due-diligence” challenges of preparing for an acquisition.

This case has a range of course applications at multiple education levels. Although it is probably best suited for graduate and executive-level programs, it can also be selectively used in undergraduate classes, particularly if populated by upperclassman. It is ideally suited to courses on entrepreneurship and on healthcare management. For an entrepreneurship course, it could be positioned mid-way through the semester, after covering topics relating to the entrepreneurial mindset, founding teams and business models. It can be used to get the class focusing on competitive issues and the challenges of starting up a company in a highly regulated environment, on entrepreneurial founding-team characteristics and management tendencies (e.g. micro-management control tendencies), on transition issues from start up to growth stages and on exit strategies.

We believe this case is also well suited as a teaching exercise for students pursuing healthcare management studies in baccalaureate and graduate programs (MBA, MHA, MHS) in which instructors wish to broaden student exposure to a real-world scenario that focuses on entrepreneurial behavior in a healthcare setting (a topic of increasing interest to healthcare practitioners and managers given the current trend toward provider formation and ownership of health facilities). Here, the case may be used to focus on the complexities of the healthcare industry, the key differences between various healthcare service business models and on the challenges that technically (clinically) trained professionals often face when trying to manage a healthcare business. Ideal placement of the case would be in a capstone course, after students have been introduced to their functional coursework in topics such as introduction to management, organizational behavior and leadership, financial management and strategic thinking. The case also challenges students to apply knowledge obtained in specialized coursework in healthcare systems and policy, industry regulation, as well as healthcare reimbursement methods.

The case also may be used in organization behavior courses to focus on team, cultural and leadership issues and in strategic management courses to focus on strategy implementation. In addition, there are enough family business themes in the case (even though Aloe is not actually a family business) to use it in a course on managing family businesses.

In October, the CEO of JPMorgan Chase & Co., is preparing for the company's 2010 Q3 earnings conference call and wondering how to address the inevitable questions related to financial reform. It has been just over two months since the Dodd-Frank Financial Reform and Consumer Protection Act (Dodd-Frank Act) had been passed, and there was still much uncertainty as to how JPMorgan should address the reforms. JPMorgan had reported stronger than expected EPS in the third quarter, but analysts were more concerned about what strategic initiatives the CEO would implement in response to the Dodd-Frank Act. The act had introduced wide-ranging and industry-changing reforms that were aimed primarily at fully integrated financial institutions such as JPMorgan. While most of the rulemaking would be forthcoming from regulatory authorities, the CEO knew it would be best to address these issues immediately to protect shareholders by avoiding uncertainty.

The case was developed in partnership with the focal entrepreneur, Michael Maher, and relies on primary data he provided.

This case is based on the experiences of Michael Maher, a Cincinnati, OH (USA)-based entrepreneur whose ecommerce business failed in 2016, largely due to a major change in Amazon’s marketplace. The case puts students in Michael’s position as this is happening. It focuses on the fact that although Michael knew, logically, that the failure was largely beyond his control, and that he “should” think about failure as a learning opportunity, emotionally and psychologically he felt terrible. The case forces students to confront this reality as they reflect on the situation and determine how Michael might best respond. The case is intended to help instructors address the often undiscussed “dark sides” of entrepreneurship, which can include financial hardship and intense stress, and also cause or exacerbate depression, substance abuse and other mental and physical health issues (Shepherd, 2019). These challenges frequently impact other involved stakeholders (e.g. family members) and, as a result, can negatively impact familial dynamics, friendships and other relationships. The goal of the case is not to discourage students from entrepreneurial activity, but to make them aware of these potential dark sides. In addition to awareness, the teaching plan is designed to provide students with tools and strategies to recognize and navigate the dark sides.

This case is appropriate for introductory entrepreneurship courses at the undergraduate and graduate level. It might also be used in more advanced courses focused on developing/launching a new venture (e.g. “New Venture Planning” courses). The case can be taught at any point within a given course, but it is recommended after students have developed an understanding of key entrepreneurship concepts in the focal course or in previous courses. In particular, students should have a working knowledge of the concept of “learning from failure” and other tenets of the lean startup and similar approaches (Blank, 2013; Ries, 2011). This background knowledge is important because the case confronts students with the reality that, although “learning from failure” is central to entrepreneurship, that does not necessarily eliminate the social and psychological challenges that often follow failures. Assuming students possess this background knowledge, the case is most effectively used early in a course to make students aware of the “dark sides” they might confront as an entrepreneur and set the stage for the development of strategies and skills to navigate those dark sides throughout the rest of the course. The case’s brevity means it can be assigned to be read in advance of class or during the class session in which it is being covered.

In mid-February 2009, amid the global financial crisis, the news was grim. The U.S. economy had been in recession since December 2007. If the downturn lasted into early spring, it would become America's longest postwar recession. The economy had shed 3.5 million jobs over the previous 12 months, the worst 12-month period on record. Bank lending was plummeting; the few banks with funds available were holding onto them. With this massive shift into liquid assets (cash and cash equivalents) and away from lending of any sort (even for productive uses or, in many cases, the working capital firms needed to survive), the economy would likely grind to a halt. On this brisk mid-February day in Washington, Timothy Geithner and Ben Bernanke rolled up their sleeves and reevaluated their plans to address the nearly impossible task of righting the ship. In terms of monetary and fiscal policy, were they doing all they could to halt this epic slide? Were they doing too much?

The learning outcome is that it will help to sustain your startups in the ever-changing business environment especially in the context of emerging markets.

The present case is about Dilkhush Kumar from village Bangaon, India who developed a cab booking platform “AryaGo”, an innovative platform completely dedicated for rural road transport connectivity. AryaGo is the service line of Aryan Cabs and Rural Trans-solution Pvt. Ltd., a Startup founded in the year 2016 under Startup Bihar, a seed capital support scheme of State Government. The idea was to provide comfort, convenience, safety and affordability to all the commuters travelling from or within far-off villages. The biggest challenge during implementation in villages includes availability of updated geo-mapped images for app development and vehicle tracking. Company was foremost in providing the kiosk-based booking facility for its customers. It took the decision based on the profiling of customers and their preferred booking methods. When a customer booked a cab using IVR, they did not had access to app-based customer panel and hence they could not avail services such as, location tracking, SoS, real time tracking of vehicle. However, heavy invest in IT has put the company in financial stress and Kumar is wondering whether to expand fast or penetrate in the given target market. Should he re-design his business model so as it can really make a difference in terms of service delivery?

Post Graduate/ MBA.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

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