1. Merchant banking provides valuable non-banking financial services such as corporate finance, portfolio management, underwriting shares, and project counseling in exchange for fees.
2. Merchant banking originated from merchants in London who financed foreign trade and helped underdeveloped governments raise funds.
3. Merchant banking in India is regulated by SEBI and provides intermediary services between companies needing capital and investors.
This presentation is on Security Exchange Board (SEBI) which gives the brief about the SEBI with its objective, function, details about the chairman, rules
This presentation covers Merchant Banking History; Categories; Services provided by them; Methods of placement; underwriting; Issue management & SEBI guidelines.
This presentation is on Security Exchange Board (SEBI) which gives the brief about the SEBI with its objective, function, details about the chairman, rules
This presentation covers Merchant Banking History; Categories; Services provided by them; Methods of placement; underwriting; Issue management & SEBI guidelines.
The presentation gives a overall picture of Security Exchange Board of India like what SEBI Establishment features structure Objectives function powers role and conclusion about Security Exchange Board of India
The Financial services sector in India is blooming and has become one of the lucrative areas to professionalism. The sector has undergone metamorphosis since 1990. Indian economy got liberalized during 1991 and the financial sector was kept open for private and foreign players. During the late eighties, the financial services industry in India was dominated by commercial banks and other financial institutions governed by the Central Government. The economic liberalization has brought in a complete transformation in the Indian financial services industry. Prior to the economic liberalization, the Indian financial service sector was characterized by various other factors, which was related to the growth of this sectorThe term Financial services in its broader sense refers to ― mobilizing and allocation of savings‘‘. It is identified as all those activities involved in the process of converting savings into investment. Financial services also include FINANCIAL INTERMEDIARIES such as Merchant Bankers, Venture capitalists, Commercial banks, Insurance Companies etc.
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
This presentation include Introduction, Origin, Indian scenario, Definition, Growth, category ,Prospectus, Function, Quality Problem and Guideline for Merchant Banking.
The presentation gives a overall picture of Security Exchange Board of India like what SEBI Establishment features structure Objectives function powers role and conclusion about Security Exchange Board of India
The Financial services sector in India is blooming and has become one of the lucrative areas to professionalism. The sector has undergone metamorphosis since 1990. Indian economy got liberalized during 1991 and the financial sector was kept open for private and foreign players. During the late eighties, the financial services industry in India was dominated by commercial banks and other financial institutions governed by the Central Government. The economic liberalization has brought in a complete transformation in the Indian financial services industry. Prior to the economic liberalization, the Indian financial service sector was characterized by various other factors, which was related to the growth of this sectorThe term Financial services in its broader sense refers to ― mobilizing and allocation of savings‘‘. It is identified as all those activities involved in the process of converting savings into investment. Financial services also include FINANCIAL INTERMEDIARIES such as Merchant Bankers, Venture capitalists, Commercial banks, Insurance Companies etc.
An investment banking is a financial institution that assists individuals, corporations and governments in raising financial capital by underwriting or acting as the client’s agent in the issuance of securities or both
This presentation include Introduction, Origin, Indian scenario, Definition, Growth, category ,Prospectus, Function, Quality Problem and Guideline for Merchant Banking.
Merchant banking can be defined as a skill-oriented professional service provided by merchant banks to their clients, concerning their financial needs, for adequate consideration, in the form of fee.
Brief information about merchant banking institutions in india, meaning,
Origin, capital adequacy requirement, category of merchant banks, merchant bank services etc...
Explore our most comprehensive guide on lookback analysis at SafePaaS, covering access governance and how it can transform modern ERP audits. Browse now!
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
Accpac to QuickBooks Conversion Navigating the Transition with Online Account...PaulBryant58
This article provides a comprehensive guide on how to
effectively manage the convert Accpac to QuickBooks , with a particular focus on utilizing online accounting services to streamline the process.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
2. MERCHANT BANKING
Merchant banking may be defined as an ‘institution which covers a
wide range of activities such as underwriting of shares, portfolio
management, project counseling, insurance, credit syndication
etc…They render all these services for a fee.
ORIGIN:
The term merchant banking originated from the London who started
financing foreign trade through acceptance of bills
Later they helped government of under developed countries to raise
long term funds
Later these merchants formed an association which is now called
“Merchant Banking and Securities House Association”
3. Contd..
Merchant banking is a non-banking financial activity similar to banking;
Merchant banking is a fee based business, where the bank assumes market
risk but no long-term credit risk.
These are financial institutions providing valuable solutions such as:-
● Acceptance of bills of exchange;
● Corporate finance;
● Portfolio management;
● Other non-banking services.
4. Merchant Banking in India
Need for merchant banking was felt with rapid growth in number
& size of issues made in primary market.
Merchant banking services were started by foreign banks, namely
National Grindlays in 1967 & City bank in 1970 .
Merchant banking services were offered along with other traditional
banking services.
SBI was first Indian bank to set up Merchant banking division in
1972.
5. DIFFERENCE BETWEEN MERCHANT BANKS &
COMMERCIAL BANKS:
COMMERCIAL BANKS
Deal in debt & debt related finance
Asset oriented
Avoid risks
Mere financiers
MERCHANT BANKS
Deal in equity & equity-related
finance
Management oriented
Willing to take risks
Their activities include project
counselling, corporate counselling,
issue management, loan
syndication, underwriting etc.
6. SL
No
Particulars Summary
1 Corporate Counseling Covers the entire field of merchant
banking, limited to giving suggestions
2 Project Counseling Preparing project report for govt.
approval , financial assistance
Services of Merchant Banks
7. 3 Loan Syndication Assistance rendered to get term loan
for project, help client make appraisal,
designing capital structure etc
4 Issue Management Marketing corporate securities,
intermediary in transfer of capital
from one who owns to needy
5 Underwriting Guarantee given by the underwriter,
make raising of external resource easy
6 Managers to Issue Drafting, completion of formalities,
appoint Registrar etc
8. 7 Portfolio
Management
Helping the investors in making
investment in different kind of
securities
8 Mergers and
takeovers
Middlemen in setting negotiation
9 Off Shore Finance Help in areas involving foreign
currency
10 Non- Resident
Investment
Provide help in better and
smooth trade to NRIs
9. REGULATIONS OF MERCHANT BANKING:
The merchant banking activity in India is governed by SEBI (Merchant Bankers)
Regulations, 1992. Registration with SEBI is mandatory to carry out the business of
merchant banking in India. An applicant should comply with the following norms:
i) The applicant should be a corporate body.
ii) The applicant should not carry on any business other than those connected with the
securities market.
iii) The applicant should have necessary infrastructure like office space, equipment,
manpower, etc.
iv) The applicant must have at least two employees with prior experience in merchant
banking.
v) Any associate company, group company, subsidiary or interconnected company of the
applicant should not have been a registered merchant banker.
vi) The applicant should not have been involved in any securities scam or proved guilt for
any offence.
vii) The applicant should have a minimum net worth Rs. 5 Crores
10. CATEGORIES OF MERCHANT BANKS:
The categories for which registration may be granted are given below:
• Category I – they are allowed to carry on the activity of issue management and to act as
adviser, consultant, manager, underwriter, portfolio manager.
• Category II –they are allowed to act as adviser, consultant, co-manager, underwriter,
portfolio manager.
• Category III –they are permitted to act as underwriter, adviser or consultant to an
issue.
• Category IV – they can act only as adviser or consultant to an issue.
CAPITAL ADEQUACY NORMS:
Category I : Rs. 5 crores
Category II : Rs.50 lakhs
Category III : Rs.20 lakhs
Category IV : Nil
Note: With effect from December 9, 1997, different categories of merchant bankers were abolished and only
Category-I merchant bankers are registered by the SEBI.
11. RESTRICTION ON APPOINTMENT OF LEAD MANAGERS:
The regulations state that the number of lead merchant bankers (issue manager
to the issue) may not exceed in the case of any issue of –
Size of the issue No. of Lead Managers
(a) Less than Rs. 50 crore Two
(b) Rs. 50 crore but less than Rs. 100 crore Three
(c) Rs. Rs. 100 crore but less than Rs. 200 crore Four
(d) Rs. 200 crore but less than Rs. 400 crore Five
(e) Above Rs. 400 crore Five or more as may be
agreed by the board.
This restriction on the number of lead managers for an issue was omitted by an
amendment in regulations on April 19, 2006.
12. CODE OF CONDUCT:
The code of conduct stipulates that in the performance of duties, merchant
banker should:
(1) act in an ethical manner, (2) inform the client that he is obliged to comply
with the code of conduct, (3) render high standard of service and exercise due
diligence, (4)not to indulge in unfair practices, (5)not to make
misrepresentations, (6)give best advice, (7) not to divulge confidential
information about the clients, (8) endeavor to ensure that true and adequate
information is provided to investors.
Finally merchant bankers have to deal adequately with complaints from
investors. Merchant bankers should not be a party in respect of issue of
securities, creation of false market, price rigging or manipulation or pass
price sensitive information, to abide by all rules, regulations, guidelines,
resolutions issued by the Government of India and SEBI from time to time.
13. MERCHANT BANKERS’ COMMISSION:
As determined by the Finance Ministry, GoI, merchant bankers are eligible to charge
commission/fee from their clients as detailed below:
≈ A merchant banker can charge 0.5% as the maximum commission for whole of the issue.
≈ They can charge project appraisal fees.
≈ A Lead Manager can claim a commission of 0.5% up to Rs.25 crore and 0.2% in excess of
Rs. 25 crore.
≈ Underwriting commission.
≈ Brokerage commission 1.5%.
≈ Other expenses like advertising, printing, Registrar’s expenses, stamp duty etc., in
connection with the issue can be reimbursed from its clients.
14. GUIDELINES FOR MERCHANT BANKERS
Every merchant banker should maintain copies of balance sheet, Profit and loss account,
statement of financial position
Half-yearly unaudited result should be submitted to SEBI
Merchant bankers are prohibited from buying securities based on the unpublished price
sensitive information of their clients
SEBI has been vested with the power to suspend or cancel the authorization in case of
violation of the guidelines
Every merchant banker shall appoint a ‘Compliance Officer’ to monitor compliance of the Act
SEBI has the right to send inspecting authority to inspect books of accounts, records etc… of
merchant bankers
Inspections will be conducted by SEBI to ensure that provisions of the regulations are
properly complied
An initial authorization fee, an annual fee and renewal fee may be collected by SEBI
A lead manager holding a certificate under category I shall accept a minimum underwriting
obligation of 5% of size of issue or Rs.25 lakhs whichever is less
15. SEBI GUIDELINES FOR MERCHANT BANKERS
REGARDING ISSUES:
For each issue managed by an M.B, the matters to be disclosed mandatorily on
their website are:
Three years track record of companies whose IPOs/FPOs were managed by
them.
Issue size
Extent of over/under subscription
The shareholding of QIBs at the end of each of the three subsequent years
Financials of the company for three years
EPS and Price-Earning multiple at the end of each of the financial year
Post-listing vis-à-vis the peer as well as the industry average
The extent of trading of shares whether thin or active
16. The M.B. Registered with SEBI classified
according to the category :-
MERCHANT
BANKER
PUBLIC SECTOR
COMMERCIAL
BANKS :- 24
FINANCIAL
INSTITUTION :- 6
STATE
INSTITUTION :-
4
PRIVATE
SECTOR
BANKS :- 10
FINANCE &
INVESTMENT :-
231
LEASING
INTERNATIONAL
BANKER :- 10
17. CONCLUSION:
Merchant Banking is difficult to define. The function of Merchant Bankers
varies from country to country. Merchant banks are known as “Accepting and
issuing houses” in UK and as “Investment banks” in USA
In India merchant bankers are allowed to undertake only those activities
which are related to securities market including issue management activities
and are prohibited from carrying on fund based activities other than those
related exclusively to the capital market. This reduces the scope of merchant
banking in India.