Have been asked during the second round to pitch a stock provided by the interviewers alongside a simple 5 year model and IRR calculations.
When it comes to the memo, how do I avoid regurgitating what's already provided in the company's S-1?
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Think about the goal of an S-1 and what areas they gloss over, dont cover, exaggerate etc. Thats where youll find what to talk about
can i be ur finance pal?
lol sure
The whole point is you don't want to just regurgitate what is on the S-1; that already exists. It's not a book report summary of existing facts, its a THESIS.
Weave narrative with a quantification of what is already imbedded / recognized by the market today, with a risk/reward perspective + catalyst(s).
For biz description, all that is needed is the directly relevant stuff that supports your argument or "idea," and/or enough so they have a 3rd grader's understanding of what the company actually does at its core. You'll still need to know everything at a certain point obvs, but that doesn't mean it needs to be summarized for a pitch. Usually its just a couple sentences/bullet points. What they do, end markets + sizes + growth rates, etc.
Bro is cooked
How do you calculate the IRR of a stock? Would the cash outflow be the equity or enterprise value or something else?
Bump. Also interested. Never heard of IRR on a stock before.
Nevermind, this guy is cooked
I had similar thoughts about this step in the process, its being presented by a recruiting agency. The investment firm does both Indian public markets (L/S) as well private markets (Growth Investing). Understand that its a "pure-play pre IPO anchor investment" from one of the associates on the team.
Incase anyone was wondering this was the assignment.
"Develop a 5-year financial model and provide a recommendation on whether to invest in it. Please calculate 5 year IRR, assuming an initial pre-listing market-cap of Rs 25k cr with a primary raise of Rs 1600 cr at IPO."
Mtnmaster1's reply was what I was looking for, more high-level. Thanks
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