The document provides an overview of merchant banking in India. It discusses the evolution and historic development of merchant banking, the key roles and services provided by merchant bankers such as issue management, underwriting, and corporate counseling. It also outlines the leading public sector, private sector, and foreign merchant bankers operating in India, as well as the present scenario and challenges faced by the industry. Case studies are presented on three prominent Indian merchant banking firms - BOB Capital Markets Limited, Kotak Securities, and IDBI Capital - and their various investment banking and financial services.
The money market deals with short-term lending and borrowing of funds with maturities of less than one year. It includes various instruments such as treasury bills, commercial paper, certificates of deposit, and call/notice money. The money market helps provide short-term funding for participants and allows the central bank to regulate liquidity in the economy. It has grown in recent decades with the introduction of new instruments and the integration of organized and unorganized sectors.
The document discusses the growth of India's money market. It defines the money market and describes its classification into organized and unorganized sectors. It outlines the key instruments in the Indian money market like treasury bills, commercial papers, certificates of deposits, and banker's acceptances. The document also discusses reforms undertaken in the money market, including deregulation of interest rates and the establishment of institutions like the Discount and Finance House of India.
1) Merchant banking originated from merchant houses in the 18th-19th centuries financing international trade through bills of exchange. Over time, merchant banks took on roles of accepting bills of exchange, raising capital for foreign governments, and providing various financial services.
2) In India, merchant banking services were introduced by foreign banks in the 1960s-1970s and specialized merchant banking institutions were established in the 1970s in response to growing corporate financing needs.
3) Merchant banks play an important role in India by mobilizing funds for corporate and industrial development and advising corporations on issues like capital raising and mergers and acquisitions.
The document provides an overview of the money market. It defines the money market as the market for short-term, highly liquid debt instruments with maturities of one year or less, such as treasury bills, commercial paper, and certificates of deposit. These instruments are traded by phone between financial institutions, corporations, brokers, and dealers. The money market helps facilitate short-term borrowing and lending for participants. It consists of various sub-markets that collectively make up this important segment of the financial system.
This document provides an overview of the merchant banking sector in India. It discusses the evolution of merchant banking in India since 1969. It defines the key terms like merchant banking and investment banking. It describes the various functions of merchant bankers like corporate counseling, project counseling, issue management, portfolio management etc. It also discusses the regulatory framework for merchant bankers in India as laid out by SEBI, including the categories of merchant bankers and their capital adequacy requirements. In conclusion, it discusses some recent developments and challenges in the Indian merchant banking sector.
Global Depository Receipts (GDRs) allow foreign companies to list shares on an exchange outside of their home country market. A GDR is a certificate issued by a depository bank that purchases shares of a foreign company and deposits them in an account. GDRs represent ownership of underlying company shares and are traded independently, with 1 GDR often equal to 10 company shares. GDRs provide companies access to overseas capital markets, while giving investors opportunities for diversification and transparency through investments in foreign firms on familiar exchanges.
Merchant banking provides a wide range of financial services including underwriting shares, portfolio management, project counseling, and more. They work with both equity and debt financing unlike commercial banks. Some key services include corporate counseling, project financing, managing public offerings, portfolio management, M&A advisory, offshore financing, and advising non-resident investors. Merchant banks must have expertise in financial analysis, market knowledge, and maintain high professional standards. The merchant banking industry in India has opportunities to grow with the increasing number of public offerings, foreign institutional investments, evolving debt markets, and corporate restructuring needs.
The money market deals with short-term lending and borrowing of funds with maturities of less than one year. It includes various instruments such as treasury bills, commercial paper, certificates of deposit, and call/notice money. The money market helps provide short-term funding for participants and allows the central bank to regulate liquidity in the economy. It has grown in recent decades with the introduction of new instruments and the integration of organized and unorganized sectors.
The document discusses the growth of India's money market. It defines the money market and describes its classification into organized and unorganized sectors. It outlines the key instruments in the Indian money market like treasury bills, commercial papers, certificates of deposits, and banker's acceptances. The document also discusses reforms undertaken in the money market, including deregulation of interest rates and the establishment of institutions like the Discount and Finance House of India.
1) Merchant banking originated from merchant houses in the 18th-19th centuries financing international trade through bills of exchange. Over time, merchant banks took on roles of accepting bills of exchange, raising capital for foreign governments, and providing various financial services.
2) In India, merchant banking services were introduced by foreign banks in the 1960s-1970s and specialized merchant banking institutions were established in the 1970s in response to growing corporate financing needs.
3) Merchant banks play an important role in India by mobilizing funds for corporate and industrial development and advising corporations on issues like capital raising and mergers and acquisitions.
The document provides an overview of the money market. It defines the money market as the market for short-term, highly liquid debt instruments with maturities of one year or less, such as treasury bills, commercial paper, and certificates of deposit. These instruments are traded by phone between financial institutions, corporations, brokers, and dealers. The money market helps facilitate short-term borrowing and lending for participants. It consists of various sub-markets that collectively make up this important segment of the financial system.
This document provides an overview of the merchant banking sector in India. It discusses the evolution of merchant banking in India since 1969. It defines the key terms like merchant banking and investment banking. It describes the various functions of merchant bankers like corporate counseling, project counseling, issue management, portfolio management etc. It also discusses the regulatory framework for merchant bankers in India as laid out by SEBI, including the categories of merchant bankers and their capital adequacy requirements. In conclusion, it discusses some recent developments and challenges in the Indian merchant banking sector.
Global Depository Receipts (GDRs) allow foreign companies to list shares on an exchange outside of their home country market. A GDR is a certificate issued by a depository bank that purchases shares of a foreign company and deposits them in an account. GDRs represent ownership of underlying company shares and are traded independently, with 1 GDR often equal to 10 company shares. GDRs provide companies access to overseas capital markets, while giving investors opportunities for diversification and transparency through investments in foreign firms on familiar exchanges.
Merchant banking provides a wide range of financial services including underwriting shares, portfolio management, project counseling, and more. They work with both equity and debt financing unlike commercial banks. Some key services include corporate counseling, project financing, managing public offerings, portfolio management, M&A advisory, offshore financing, and advising non-resident investors. Merchant banks must have expertise in financial analysis, market knowledge, and maintain high professional standards. The merchant banking industry in India has opportunities to grow with the increasing number of public offerings, foreign institutional investments, evolving debt markets, and corporate restructuring needs.
The document discusses the financial troubles facing Yes Bank, a major private bank in India. Yes Bank saw rapid growth between 2014-2019 by providing loans to high-risk borrowers that could not get funds elsewhere. However, this led to a rise in non-performing assets (NPAs) that surfaced in 2017. By late 2019, Yes Bank was facing a capital shortage, high NPAs of 18.87% of its loan book, and losses of over 18,000 crores for the quarter. The Reserve Bank of India then stepped in with a reconstruction plan to avoid a bank failure and protect depositors.
A ppt on rbi & the indian financial systemRavi kumar
The document provides an overview of the Indian financial system and the role of the Reserve Bank of India (RBI). It discusses the key components of the financial system, including financial markets, institutions, instruments, and services. It also outlines the objectives and functions of the RBI as India's central bank, including formulating monetary policy, regulating banks, managing currency and exchange rates, and more. The RBI was established in 1934 and is fully government-owned, with its main office in Mumbai.
International business finance Foreign Exchange MarketsMeghna Baid
This study examines factors that influence consumers' intentions to purchase foreign exchange products online. It analyzes how internet usage, website content, context, infrastructure, and trust impact purchase intention. The results show that trust in brokers and the market, positive website context design, and reliable infrastructure positively correlate with purchase intention. Website content was found to have less influence. Overall, the study aims to help foreign exchange companies better understand what drives online purchasing and loyalty in order to improve their services and attract more investors.
The document provides an overview of capital markets, including their origin, constituents, functions, and role in economic development. It discusses the following key points in 3 sentences:
Capital markets have existed since the 12th century, originating in cities like Lyon, France and later expanding to locations such as Amsterdam, London, and Mumbai. They provide a platform for companies, governments, and individuals to raise long-term capital through financial instruments like stocks and bonds, as well as facilitate the transfer of savings from investors to entities with productive investment needs. Properly functioning capital markets can accelerate economic growth by promoting savings, efficient capital allocation, and confidence among both domestic and foreign investors.
1. The document discusses the growth and development of derivatives markets in India, including key milestones like SEBI permitting derivatives trading on Indian stock exchanges in 2000 and the introduction of various derivatives products over subsequent years.
2. It provides background on regulations governing derivatives trading in India and the objectives of regulation, including protecting investors and market integrity.
3. The document outlines the objectives of the study, which include understanding the Indian derivatives market scenario, analyzing whether derivatives have achieved their purpose, and suggesting methods based on observations. It discusses the scope and limitations of the study.
The document appears to be a project report submitted by Savita Sharma for her summer internship at Sharekhan Ltd, a stock broking firm. The report provides an overview of Sharekhan's products and services, including equity trading, derivatives, online services, commodity trading, portfolio management, research capabilities and more. It also acknowledges those who guided the project and internship.
This document provides an overview of the banking sector in India. It discusses the definition of a bank according to Indian law and the history of banking in India in phases from the 18th century to present day. It also classifies the different types of banks in India including the Reserve Bank of India, public sector banks, private sector banks, cooperative banks, and development banks. The roles of commercial banks and investment banks are explained. Finally, it discusses modern modes of banking transactions such as e-banking, ATMs, debit cards, and credit cards.
The capital market allows investors to trade various investment instruments like bonds, equities, and mortgages. It connects investors with surplus funds to those with deficits, providing long-term and overnight funding. Financial instruments traded include equities, credit products, insurance, foreign exchange, hybrids, and derivatives. The capital market has two main segments - the primary market where new securities are issued, and the secondary market where existing securities are traded, creating liquidity.
The Reserve Bank of India (RBI) is the central bank of India, established in 1935. It was initially privately owned but was nationalized in 1949. RBI's key functions include acting as banker to the government and commercial banks, having a monopoly on currency issuance, regulating money supply and credit in the economy, and acting as custodian of foreign exchange reserves to help maintain currency stability. It also acts as lender of last resort to banks and a clearing house for inter-bank settlements. RBI's activities are aimed at regulating monetary policy and the banking system to achieve price stability and support fiscal policy.
MONEY MARKET AND CAPITAL MARKET(short project)vijayverma767
The document provides information about money markets and capital markets. It defines the money market as dealing in short term loans of up to 365 days. Money market instruments discussed include call money, treasury bills, certificates of deposit, commercial paper, repurchase agreements, and banker's acceptances. The roles of the money market are also summarized, such as maintaining monetary equilibrium, promoting economic growth, and helping implement monetary policy. Characteristics of the money market include short term borrowing and lending between parties who agree on interest rates. The importance of the money market to the Indian economy is also highlighted.
Indian Banking Industry - Challenges, Opportunities and Growth Driver of Bank...Resurgent India
Indian banks face challenges such as low banking access rates and rising customer expectations, but also opportunities for growth. Key challenges include implementing Basel III capital requirements, increasing competition, and rising non-performing assets. However, opportunities exist in expanding mortgage lending, wealth management, and rapid ATM/branch growth. Economic development, favorable demographics, and policy support can further drive the banking industry's growth in infrastructure financing, financial inclusion, and technological innovation.
The document is a student project analyzing the fundamentals of HDFC Bank. It includes an overview of HDFC Bank, its history, management, and financial details. It also analyzes the macroeconomic outlook for the Indian banking sector, including factors like inflation, interest rates, and regulatory changes. Finally, it examines the competitive landscape of the Indian banking industry, including trends among public sector banks, private banks, and foreign banks. The student conducted the analysis under the guidance of a professor to evaluate HDFC Bank as an investment.
A mutual fund is a professionally-managed investment scheme that pools together money from investors and invests it in stocks, bonds, and other securities. Mutual funds allow small investors to participate in diversified market investments and benefit from professional management. The key benefits of mutual funds include mobilizing savings, professional management, diversification of risk, liquidity, and potential tax benefits. Mutual funds in India follow a three-tier structure involving sponsors, trustees, and asset management companies.
Unit 2.2 Exchange Rate Quotations & Forex MarketsCharu Rastogi
This presentation deals with exchange rate quotations, common currency symbols, direct and indirect quotes, American terms, European terms, cross rates, Bid and Ask rates, Mid rate, Spread and its determinants, Spot markets, Forward Markets, Premium and Discounts, various practices of writing quotations, calculating broken period forward rates, Speculation and arbitrage, Forex futures and Currency Options.
Portfolio management is a process that aims to optimize investment returns while reducing risk. It involves five phases: security analysis, portfolio analysis, portfolio selection, portfolio revision, and portfolio evaluation. The security analysis phase involves classifying and examining individual securities. Portfolio analysis identifies possible portfolio combinations and assesses their risks and returns. The optimal portfolio is then selected during the portfolio selection phase. Portfolio revision makes changes due to funds or risk adjustments. Finally, portfolio evaluation compares objectives and performance to improve the process.
Merchant banking involves providing financial advice and services to large corporations rather than regular banking services to the public. It primarily deals with international finance, long-term loans, stock underwriting, and advising on mergers and acquisitions. Merchant banks invest their own capital in client companies and provide corporate finance services. There are 135 registered merchant bankers in India that operate under 4 categories set by SEBI, with different capital adequacy requirements depending on the level of services provided.
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
The Clearing Corporation of India Ltd (CCIL) was established in 2001 to provide clearing and settlement services for money, government securities, and foreign exchange markets. CCIL guarantees settlement of all trades through novation and manages risk through margin requirements and collateral. It has launched several platforms and products over the years to increase efficiency, liquidity, and reduce counterparty risk in India's financial markets.
Capital Account Convertibility (CAC) refers to the freedom to convert local financial assets into foreign assets and vice versa without restrictions. It allows for the free flow of capital across borders. India does not currently have full CAC as it regulates foreign investments and currency conversions to maintain economic stability and prevent mass capital outflows during times of crisis or uncertainty. Full CAC requires conditions like low inflation rates and fiscal deficits to be in place.
Merchant banking in India originated in 1969 with the merchant banking division set up by Grindlays Bank. Merchant banks provide specialist financial services like corporate finance, portfolio management, and issue management. The SEBI guidelines regulate merchant banks' activities like public issue allotments and disclosure of non-core business income. Looking ahead, merchant banks will need to ensure their activities protect investors and promote healthy capital markets as the industry continues to evolve in India.
This presentation include Introduction, Origin, Indian scenario, Definition, Growth, category ,Prospectus, Function, Quality Problem and Guideline for Merchant Banking.
The document discusses the financial troubles facing Yes Bank, a major private bank in India. Yes Bank saw rapid growth between 2014-2019 by providing loans to high-risk borrowers that could not get funds elsewhere. However, this led to a rise in non-performing assets (NPAs) that surfaced in 2017. By late 2019, Yes Bank was facing a capital shortage, high NPAs of 18.87% of its loan book, and losses of over 18,000 crores for the quarter. The Reserve Bank of India then stepped in with a reconstruction plan to avoid a bank failure and protect depositors.
A ppt on rbi & the indian financial systemRavi kumar
The document provides an overview of the Indian financial system and the role of the Reserve Bank of India (RBI). It discusses the key components of the financial system, including financial markets, institutions, instruments, and services. It also outlines the objectives and functions of the RBI as India's central bank, including formulating monetary policy, regulating banks, managing currency and exchange rates, and more. The RBI was established in 1934 and is fully government-owned, with its main office in Mumbai.
International business finance Foreign Exchange MarketsMeghna Baid
This study examines factors that influence consumers' intentions to purchase foreign exchange products online. It analyzes how internet usage, website content, context, infrastructure, and trust impact purchase intention. The results show that trust in brokers and the market, positive website context design, and reliable infrastructure positively correlate with purchase intention. Website content was found to have less influence. Overall, the study aims to help foreign exchange companies better understand what drives online purchasing and loyalty in order to improve their services and attract more investors.
The document provides an overview of capital markets, including their origin, constituents, functions, and role in economic development. It discusses the following key points in 3 sentences:
Capital markets have existed since the 12th century, originating in cities like Lyon, France and later expanding to locations such as Amsterdam, London, and Mumbai. They provide a platform for companies, governments, and individuals to raise long-term capital through financial instruments like stocks and bonds, as well as facilitate the transfer of savings from investors to entities with productive investment needs. Properly functioning capital markets can accelerate economic growth by promoting savings, efficient capital allocation, and confidence among both domestic and foreign investors.
1. The document discusses the growth and development of derivatives markets in India, including key milestones like SEBI permitting derivatives trading on Indian stock exchanges in 2000 and the introduction of various derivatives products over subsequent years.
2. It provides background on regulations governing derivatives trading in India and the objectives of regulation, including protecting investors and market integrity.
3. The document outlines the objectives of the study, which include understanding the Indian derivatives market scenario, analyzing whether derivatives have achieved their purpose, and suggesting methods based on observations. It discusses the scope and limitations of the study.
The document appears to be a project report submitted by Savita Sharma for her summer internship at Sharekhan Ltd, a stock broking firm. The report provides an overview of Sharekhan's products and services, including equity trading, derivatives, online services, commodity trading, portfolio management, research capabilities and more. It also acknowledges those who guided the project and internship.
This document provides an overview of the banking sector in India. It discusses the definition of a bank according to Indian law and the history of banking in India in phases from the 18th century to present day. It also classifies the different types of banks in India including the Reserve Bank of India, public sector banks, private sector banks, cooperative banks, and development banks. The roles of commercial banks and investment banks are explained. Finally, it discusses modern modes of banking transactions such as e-banking, ATMs, debit cards, and credit cards.
The capital market allows investors to trade various investment instruments like bonds, equities, and mortgages. It connects investors with surplus funds to those with deficits, providing long-term and overnight funding. Financial instruments traded include equities, credit products, insurance, foreign exchange, hybrids, and derivatives. The capital market has two main segments - the primary market where new securities are issued, and the secondary market where existing securities are traded, creating liquidity.
The Reserve Bank of India (RBI) is the central bank of India, established in 1935. It was initially privately owned but was nationalized in 1949. RBI's key functions include acting as banker to the government and commercial banks, having a monopoly on currency issuance, regulating money supply and credit in the economy, and acting as custodian of foreign exchange reserves to help maintain currency stability. It also acts as lender of last resort to banks and a clearing house for inter-bank settlements. RBI's activities are aimed at regulating monetary policy and the banking system to achieve price stability and support fiscal policy.
MONEY MARKET AND CAPITAL MARKET(short project)vijayverma767
The document provides information about money markets and capital markets. It defines the money market as dealing in short term loans of up to 365 days. Money market instruments discussed include call money, treasury bills, certificates of deposit, commercial paper, repurchase agreements, and banker's acceptances. The roles of the money market are also summarized, such as maintaining monetary equilibrium, promoting economic growth, and helping implement monetary policy. Characteristics of the money market include short term borrowing and lending between parties who agree on interest rates. The importance of the money market to the Indian economy is also highlighted.
Indian Banking Industry - Challenges, Opportunities and Growth Driver of Bank...Resurgent India
Indian banks face challenges such as low banking access rates and rising customer expectations, but also opportunities for growth. Key challenges include implementing Basel III capital requirements, increasing competition, and rising non-performing assets. However, opportunities exist in expanding mortgage lending, wealth management, and rapid ATM/branch growth. Economic development, favorable demographics, and policy support can further drive the banking industry's growth in infrastructure financing, financial inclusion, and technological innovation.
The document is a student project analyzing the fundamentals of HDFC Bank. It includes an overview of HDFC Bank, its history, management, and financial details. It also analyzes the macroeconomic outlook for the Indian banking sector, including factors like inflation, interest rates, and regulatory changes. Finally, it examines the competitive landscape of the Indian banking industry, including trends among public sector banks, private banks, and foreign banks. The student conducted the analysis under the guidance of a professor to evaluate HDFC Bank as an investment.
A mutual fund is a professionally-managed investment scheme that pools together money from investors and invests it in stocks, bonds, and other securities. Mutual funds allow small investors to participate in diversified market investments and benefit from professional management. The key benefits of mutual funds include mobilizing savings, professional management, diversification of risk, liquidity, and potential tax benefits. Mutual funds in India follow a three-tier structure involving sponsors, trustees, and asset management companies.
Unit 2.2 Exchange Rate Quotations & Forex MarketsCharu Rastogi
This presentation deals with exchange rate quotations, common currency symbols, direct and indirect quotes, American terms, European terms, cross rates, Bid and Ask rates, Mid rate, Spread and its determinants, Spot markets, Forward Markets, Premium and Discounts, various practices of writing quotations, calculating broken period forward rates, Speculation and arbitrage, Forex futures and Currency Options.
Portfolio management is a process that aims to optimize investment returns while reducing risk. It involves five phases: security analysis, portfolio analysis, portfolio selection, portfolio revision, and portfolio evaluation. The security analysis phase involves classifying and examining individual securities. Portfolio analysis identifies possible portfolio combinations and assesses their risks and returns. The optimal portfolio is then selected during the portfolio selection phase. Portfolio revision makes changes due to funds or risk adjustments. Finally, portfolio evaluation compares objectives and performance to improve the process.
Merchant banking involves providing financial advice and services to large corporations rather than regular banking services to the public. It primarily deals with international finance, long-term loans, stock underwriting, and advising on mergers and acquisitions. Merchant banks invest their own capital in client companies and provide corporate finance services. There are 135 registered merchant bankers in India that operate under 4 categories set by SEBI, with different capital adequacy requirements depending on the level of services provided.
This document provides information about mutual funds including their structure, types, history in India, advantages and disadvantages. It discusses that a mutual fund is a trust that collects money from investors and invests in stocks, bonds, money market instruments and other securities. The document outlines the key entities involved in mutual funds like sponsors, trustees, asset management companies, custodians and various distribution channels. It also summarizes the different types of mutual fund schemes and provides a brief history of mutual funds in India from 1964 to the present.
The Clearing Corporation of India Ltd (CCIL) was established in 2001 to provide clearing and settlement services for money, government securities, and foreign exchange markets. CCIL guarantees settlement of all trades through novation and manages risk through margin requirements and collateral. It has launched several platforms and products over the years to increase efficiency, liquidity, and reduce counterparty risk in India's financial markets.
Capital Account Convertibility (CAC) refers to the freedom to convert local financial assets into foreign assets and vice versa without restrictions. It allows for the free flow of capital across borders. India does not currently have full CAC as it regulates foreign investments and currency conversions to maintain economic stability and prevent mass capital outflows during times of crisis or uncertainty. Full CAC requires conditions like low inflation rates and fiscal deficits to be in place.
Merchant banking in India originated in 1969 with the merchant banking division set up by Grindlays Bank. Merchant banks provide specialist financial services like corporate finance, portfolio management, and issue management. The SEBI guidelines regulate merchant banks' activities like public issue allotments and disclosure of non-core business income. Looking ahead, merchant banks will need to ensure their activities protect investors and promote healthy capital markets as the industry continues to evolve in India.
This presentation include Introduction, Origin, Indian scenario, Definition, Growth, category ,Prospectus, Function, Quality Problem and Guideline for Merchant Banking.
Merchant banking provides various financial services including investment banking, portfolio management, underwriting public offerings, and mergers and acquisitions advice. It originated in London when banks helped finance foreign trade and raise funds for developing countries. In India, merchant banking grew with the establishment of banks like Grindlays and Citibank in the 1960s-1970s. Merchant banks operate under regulations set by the Securities and Exchange Board of India that classify banks by the types of services they can provide and require minimum capital levels. They must obtain authorization, follow code of conduct guidelines, and contribute to the market by channelizing capital and ensuring regulatory compliance.
Merchant banking has evolved over the past few decades in India. It was formally defined and regulated in 1992 by the Securities and Exchange Board of India (SEBI). Merchant bankers play an important role in facilitating capital raising for companies and supporting the growth of financial markets. The document discusses the history and evolution of merchant banking in India. It also outlines the various services provided by merchant bankers like managing public issues, advising on mergers and acquisitions, and providing post-issue support to companies. The key roles and regulations governing merchant banking in India are also highlighted.
The document provides an overview of the procedures involved in an initial public offering (IPO) and follow-on public offering (FPO). It discusses that an IPO is when a private company first offers shares to the public, transforming into a public company to raise expansion capital. A FPO is a subsequent public offering by an already publicly traded company, which can dilute existing shareholders or allow some to decrease their ownership stakes. The roles of intermediaries like book runners, bankers, and underwriters in pricing and managing the offerings are also outlined.
The Securities and Exchange Commission of Pakistan has issued new guidelines to improve the quality of disclosure in prospectuses and rationalize supporting documents. The guidelines aim to help issuers provide full and clear information to common investors. Key guidelines include using simple language in prospectuses, adequately disclosing all material risks, explaining the primary purpose and use of subscription proceeds, providing a meaningful dividend policy disclosure, reporting all material information and expenses to the issue, and encouraging publication of an abridged prospectus in Urdu in addition to English. The prospectus should be laid out simply and not use photos or fancy formatting as it is a legal document.
This document provides an overview of merchant banking services. It defines merchant banking and traces its origins in London financing foreign trade. Merchant banking services include project counseling, loan syndication, issue management, underwriting public issues, portfolio management, advising on NRI investment, mergers and acquisitions, and offshore finance. They help raise funds for projects, market corporate securities to the public, insure companies issuing public stock, manage investor portfolios, and facilitate foreign investment.
Merchant bankers help industries grow and deal with new corporate problems by guiding investors and maintaining integrity and knowledge of capital markets. They are regulated by SEBI and must be certified under categories determining their roles as issue managers, co-managers, or consultants. Responsibilities include maintaining accounts, registration, due diligence, and abiding by conduct codes. Problems include industry compartmentalization, potential malpractices, and regulations restricting some activities.
The document discusses risks in international trade, including country risk, commercial risk, and foreign exchange risk. It then covers various methods to mitigate risks, such as credit risk analysis of suppliers and buyers, commercial contracts, payment methods like open account, documentary collections, and letters of credit. The roles of banks in providing trade finance products and analyzing credit are also summarized.
The document discusses the role of merchant banking in appraising projects, designing capital structures, and managing securities issues. It defines a merchant banker as an entity that engages in issue management by arranging the sale, purchase, or subscription of securities. The key functions of merchant bankers related to issue management include designing capital structures, determining appropriate capital market instruments, pricing issues, preparing prospectuses, and selecting other parties like bankers and advertising consultants to assist with securities offerings.
Merchant banks specialize in various types of financing including bills of exchange, hire purchase, installment buying, international trade, and long-term loans. They also provide advisory services around acquisitions, mergers, and takeovers. Originally started in the Middle Ages by Italian grain merchants to finance long trading journeys, merchant banks now offer services like project counseling, loan syndication, issue management, portfolio management, and advisory services relating to mergers and acquisitions. Merchant banks are regulated by the Securities and Exchange Board of India and must obtain authorization to provide various merchant banking services.
The document discusses the role of merchant banks in India. It begins by defining merchant banking as financial institutions that provide services related to issuing securities, such as preparing prospectuses and advising on corporate finance issues. It then outlines several key services provided by merchant banks, including corporate counseling, project counseling, credit syndication, issue management and underwriting, and portfolio management. Merchant banks play an important role in raising capital and advising corporations.
Credit ratings are evaluations of a borrower's creditworthiness and ability to repay debt. They are determined by analyzing financial history, current assets and liabilities. The three major credit rating agencies are Moody's, Standard & Poor's, and Fitch. They generate revenue from fees paid by issuers seeking ratings and from selling proprietary research. Credit ratings indicate the probability that a borrower will default, with higher ratings signaling lower risk.
This document discusses the importance of investor protection in the primary market through the provision of all relevant and accurate information as well as transparent allotment procedures without bias. It also notes recent negative trends in the primary market such as aggressive pricing, poor liquidity, low returns, and low volume due to an economic slowdown.
This document provides an overview of merchant banking in India. It discusses how merchant banking originated from merchants financing international trade in the late 18th/early 19th centuries. It then discusses the history and evolution of merchant banking in India, noting that specialized merchant banking services began in India in the 1960s with foreign banks and grew rapidly in the 1980s during a new issue boom. The document defines merchant banking and outlines some of its key functions like corporate advisory services, arranging securities issues, and providing post-issue support.
This document summarizes key aspects of primary and secondary markets:
- Primary markets involve newly issued financial claims where issuers work with underwriters to issue securities, which requires registration with the SEC. Secondary markets involve trading of already issued financial assets between investors.
- There are various regulations and processes around issuing securities in primary markets, including prospectus requirements, SEC approval, and exemptions for private placements. Secondary markets provide liquidity and price discovery for issued securities.
- Order-driven and quote-driven markets, as well as exchanges and OTC markets, facilitate trading in primary and secondary markets. Various order types give investors control over trade execution. Margin trading and short-selling also allow for leveraged
The primary market deals with the issuing of new securities by companies, governments, or public institutions to raise funds. This is typically done through an investment bank or syndicate of securities dealers through processes like initial public offerings (IPOs) of stock, follow-on public offerings (FPOs), private placements, rights issues, and bonus issues. The primary market creates long-term instruments through which corporate entities can borrow capital. It allows companies to attract new capital, transfer assets into financial assets, and invest money for short or long term goals.
The document discusses key aspects of secondary markets. It defines secondary markets as markets where securities are traded after being initially offered to the public in primary markets. The majority of trading occurs in secondary markets, which comprise equity and debt markets. Secondary markets offer both sellers and buyers advantages, such as sellers recouping a portion of the original purchase price, though they can also reduce sales for original sellers. Key products traded in secondary markets include equity shares, government securities, debentures, and bonds.
Primary market vs secondary market (Made by Pankaj Bali) (SIES College Nerul)Pankaj Bali
The document provides an overview of the primary and secondary markets. The primary market allows companies to issue new securities to raise capital, such as through initial public offerings. The secondary market is where previously issued securities are traded, usually on a stock exchange. Some key differences are that the primary market deals with new issuances while the secondary market is for trading existing securities between investors.
A STUDY ON AWARENESS OF MERCHANT BANKING.pdfValerie Felton
This document provides an introduction to merchant banking. It discusses the history and evolution of merchant banking, both globally and in India. Merchant banking started as financing for international trade in the late 18th/early 19th centuries. It later expanded to include raising capital through stock/bond issuance. In India, merchant banking grew alongside the expanding economy and capital markets from the 1980s onward. Commercial banks were among the earliest providers of merchant banking services in India. The document outlines the key activities and functions of merchant banks.
Merchant banking originated in 13th century Europe when family firms engaged in trade also took part in banking activities like financing trade and wars. In India, merchant banking services began in 1967 and were primarily focused on securities issuance rather than full banking services. The Securities and Exchange Board of India (SEBI) regulates merchant banking and sets capitalization requirements. Merchant bankers play important roles like raising finance, providing advisory services, managing portfolios, and assisting with restructuring sick companies. The industry has grown with the establishment of specialized subsidiaries, rating agencies, and other organizations.
The document discusses the history and evolution of merchant banking in India. It provides details about modern merchant banking services, categories of merchant bankers based on net worth, and differences between merchant banks and commercial banks. Key points covered include that merchant banking originated in Italy and France in the 17th-18th centuries and was introduced to India through Grindlays Bank in 1967. Modern merchant banks provide services like management advising, underwriting, and portfolio management.
Merchant banking originated from merchant houses financing international trade in the late 18th and early 19th centuries. They would accept bills of exchange to finance the trade of others as well as themselves, charging a commission. Later, merchant banks helped raise capital for foreign governments by issuing stocks and bonds. Today, merchant banks provide a wide range of financial services including underwriting securities, advising on mergers and acquisitions, and helping companies establish and manage operations.
Definition and history of merchant and investment banking, Who is a merchant banker, difference between investment and commercial banking and roles and functions of merchant and investment banking.
Merchant banking has evolved over centuries from Italian grain traders in the Middle Ages to modern financial institutions. Originally, merchant banks financed international trade and helped establish colonies for European powers. Today, merchant banks provide a range of financial services including raising capital, managing debt and equity offerings, underwriting public issues, loan syndication, and more. In India, merchant banking activities began in 1967 and have expanded significantly since, with over 1450 merchant bankers registered with SEBI, including public and private sector institutions.
Merchant banking originated in London through merchants extending financial activities. It is defined as an institution covering activities like portfolio management, credit syndication, and insurance. In India, the need for merchant banking arose with rapid growth in primary market issues. Early merchant banking services in India were offered by foreign banks like Grindlays and Citibank. Merchant banking deals with equity and management, while commercial banking deals with debt and risks avoidance. Merchant banking services include corporate counseling, project counseling, loan syndication, issue management, underwriting, and portfolio management. Merchant banking has significant scope in India due to the growing new issues market, foreign investment, changing policies, debt market development, and corporate restructuring needs.
Merchant banking provides a combination of banking and consultancy services to clients. It assists companies with financial, marketing, managerial, and legal matters from starting a business through ongoing operations. Merchant banks deal primarily in international finance and business loans for companies. They specialize in international trade and serve multinational corporations. Unlike investment banks, merchant banks do not provide regular banking services to the general public. In India, the need for merchant banking grew with the rapid expansion of the primary market for stock issues.
The document discusses investment banking. It defines investment banking as controlling the flow of money by channeling cash from investors looking for returns to entrepreneurs and businesses that need funding. Investment bankers raise money from investors by selling securities and transferring that money to those who need cash for projects. They are involved in large financial transactions like mergers and acquisitions (M&A), initial public offerings (IPOs), and other securities offerings. Investment banking provides capital raising, financial advisory, corporate lending, sales and trading, brokerage, research, and private equity investment services.
Merchant banking refers to financial institutions that engage in various investment activities such as underwriting shares, portfolio management, and project consulting in exchange for fees. Merchant banks facilitate production and trade by providing financing. In India, foreign banks like National Grindlays and Citibank introduced merchant banking in the 1960s-1970s, followed by several domestic banks. A merchant banker acts as an intermediary between a company raising funds and investors by underwriting securities and advising on mergers. They are regulated by SEBI and must register as a Category I merchant banker, adhere to code of conduct, and maintain a minimum capital of 5 crore rupees.
This document provides an overview of public sector and private sector banks in India. It begins with background on the Indian banking system and classifications of banks based on ownership, law, and function. It then discusses the privatization of Indian banking and the structure of the banking system. The primary functions of banks are described as accepting deposits, advancing loans through various methods, and credit creation. Secondary functions include remittance facilities, agency services, and other supplementary roles. The document presents research methodology used for a comparative study and analyzes data collected on performance indicators of sample public and private banks. It concludes with findings, suggestions and recommendations.
Merchant banking provides consultancy services related to financial, marketing, legal, and managerial matters to help businesses with tasks like starting up, raising funds, expanding, restructuring, and reviving sick businesses. It also helps companies issue and trade stocks. Merchant banking services were first introduced in India in 1967 and were provided by foreign banks initially before domestic banks entered the field. SEBI regulations define merchant bankers as those involved in managing public issues, rights issues, buybacks, and other such activities.
Merchant banking started in Italy in the late medieval times and later spread to other European countries like France and England. In India, merchant banking originated in 1967 when the National Grindlays Bank started merchant banking operations, followed by other banks in the 1970s. Merchant banks provide various services like corporate counseling, project counseling, loan syndication, managing public issues, underwriting securities, portfolio management, advising on mergers and acquisitions, and helping companies raise funds through instruments like ADRs and GDRs. The key differences between merchant banks and commercial banks are that merchant banks mainly serve large corporates and wealthy individuals through investment management and advisory services, while commercial banks provide basic banking services to individuals and small businesses through
Issue management intermediaries- P. SAI PRATHYUSHA (PONDICHERRY UNIVERSITY)SaiLakshmi115
This document provides an overview of merchant banking in India, including:
1. It defines merchant banking and discusses the major intermediaries in the new issue market such as merchant bankers, lead managers, underwriters, and others.
2. It explains the different categories of merchant bankers registered with SEBI and the registration process.
3. It outlines the various functions performed by merchant bankers such as issue management, portfolio management, corporate counseling, credit syndication, and others.
This document provides an overview of merchant banking. It defines merchant banking as professional services provided by merchant banks to customers considering their financial needs in exchange for fees. Merchant banks provide services like fundraising, financial advising, loans, and underwriting to high-net-worth individuals and large corporations. The document then discusses the history of merchant banking in India, the roles and activities of merchant banks like raising finance, promotional activities, and project management, and concludes that merchant banks are financial intermediaries that help move capital from investors to corporations and governments.
Investment banking aids companies in acquiring funds through public offerings or private equity investments. It also provides advisory services for mergers, acquisitions, and other strategic decisions. While large corporations have internal finance teams, investment banks provide objectivity, expertise, and access to capital markets. The top global investment banks include Goldman Sachs, JPMorgan, and Merrill Lynch. Regulation of the industry increased in the 1930s to separate commercial and investment banking and protect investors. In India, investment banking evolved from traditional merchant banking services provided by foreign banks starting in the 1960s.
The document provides an overview of the banking system in India. It discusses the origins and evolution of banking in India from money lenders to the establishment of the Reserve Bank of India in 1935. Key events include the nationalization of major private banks in 1969 and 1980 to promote financial inclusion and priority sector lending. The banking sector was further reformed in the 1990s on the recommendations of the Narasimham Committee, liberalizing and opening the sector to private and foreign banks. Today the Indian banking sector is dominated by public sector, private sector, and foreign banks and has grown but still faces challenges of furthering financial inclusion across India.
Merchant banking services were first introduced in India in 1967 by National Grindlays Bank and Citi Bank in 1970. Merchant banks primarily operate as issue houses in India, managing corporate securities offerings and providing services such as issue management, stock brokering, project appraisal, corporate restructuring, portfolio management, credit syndication, stock underwriting, acceptance credit, and assistance to small companies and public sector units. A merchant bank is defined as an institution that provides these services as well as financial advising, leasing, and management of interest and dividends.
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2. 2
TABLE OF CONTENTS
TABLE OF CONTENTS...........................................................................................................2
MERCHANT BANKING..........................................................................................................4
INTRODUCTION: ................................................................................................................4
EVOLUTION OF MERCHANT BANKING: ......................................................................4
MERCHANT BANKING IN INDIA ........................................................................................5
A LOOK INTO HISTORIC DEVELOPMENT....................................................................5
CHARACTERSTICS OF MERCHANT BANKING: ..........................................................5
ROLE OF MERCHANT BANKING IN INDIA: .................................................................6
Issue Management .............................................................................................................6
Banker to the issue.............................................................................................................6
Debenture Trustee..............................................................................................................7
Underwriting......................................................................................................................7
Corporate Counselling .......................................................................................................7
Project Counselling............................................................................................................7
Types of Merchant bankers....................................................................................................8
Category I....................................................................................................................8
Category II...................................................................................................................8
Category III .................................................................................................................8
Category IV.................................................................................................................8
Leading merchant bankers in India........................................................................................8
Public sector:......................................................................................................................8
Private sector:.....................................................................................................................8
Foreign merchant bankers:.................................................................................................8
Present scenario of Indian Merchant Banking.......................................................................8
The challenges faced by merchant bankers in India..............................................................9
Case Study ...............................................................................................................................10
BOB capital Markets Limited..............................................................................................10
Strengths ..........................................................................................................................10
SERVICES:- ....................................................................................................................10
Investment Banking .....................................................................................................10
Retail Broking..............................................................................................................10
3. 3
Institutional Broking....................................................................................................10
Mutual Fund Distribution ............................................................................................10
Kotak Securities...................................................................................................................11
Large Presence:................................................................................................................11
Services:-..........................................................................................................................11
IDBI capital..........................................................................................................................12
SERVICES:......................................................................................................................12
REFRENCES:..........................................................................................................................13
4. 4
MERCHANT BANKING
The Progress of any economy mainly depends on the efficient financial system of the
country. Indian economy is no exception of this. This importance of the financial sector
reforms affirms an effective means for solving the problems of economic, financial and social
in India and merchant banking plays a key role in that.
INTRODUCTION:
There is not a standard definition regarding the term merchant banking. Some
countries often call it ‘Investment banking’ or ‘accepting and issuing houses’ and they serve
different purposes regarding to the need of financial system of the country. Usually, the
purpose of merchant banking is to facilitate the issuers of securities (companies) to raise
capital from the financial market by selling the securities. It offers a package of services
related to the capital raising activity. This is the reason, why sometimes, it is often identified
with capital issue activities of companies.
EVOLUTION OF MERCHANT BANKING:
The origin of merchant banking is to be traced to Italy in late medieval times and
France during the seventeenth and eighteenth centuries. Initially, merchant banking consisted
of merchants who assisted in financing the transactions of other merchants in addition to their
own trade. In the seventeenth century, a merchant banker was a dealer in bills of exchange
who operated with correspondents abroad and speculated on the rate of exchange.
In the United Kingdom, merchant banks came on the scene in the late eighteenth
century and early nineteenth century. Merchant banks initially included acceptance houses,
discount houses and issue houses. Therefore often they were referred as 'accepting and
issuing houses'. Modern merchant banks have a wide range of activities such as finance
foreign trade, issue capital, managing individual funds, and undertaking foreign security
business and foreign loan business. The oldest merchant bank in London was Baring
Brothers.
English and European merchant banks played a prominent role in the United States
until indigenous merchant bankers emerged in the 1880’s. In U.S.A., these were known as
investment bankers. Soon, they replaced brokers and promoters who earlier played a
prominent role in the issue of securities and started launching and organising industrial units
and mergers and helping transformation of privately held companies into publicly owned
companies. The role of today’s Investment banks is to make the primary markets in USA,
arrange mergers and acquisitions, undertake global custody, proprietary trading and market
making, niche business, fund management and advisory services to governments and firms.
The five largest investment banks were Bear Stearns, Lehman Brothers, Merrill Lynch
Goldman Sachs and Morgan Stanley.
5. 5
MERCHANT BANKING IN INDIA
In India, the merchant banking sector has grown at a faster pace in the last two
decades. But, over the years, the number of players in the merchant banking industry came
down and currently we find only a few large firms surviving in the industry.
According to SEBI, “a merchant banker is one who is engaged in the business
of issue management either by making arrangements regarding selling, buying or subscribing
to the securities as manager, advisor or rendering corporate advisory services in relation to
such issue management”.
A LOOK INTO HISTORIC DEVELOPMENT
The first merchant banking activity in India started in 1969 by the Grindlays Bank by
opening a merchant banking division. Initially they were issue mangers looking after the
issue of shares and raising capital for the company. But subsequently they expanded their
activities such as working capital management; syndication of project finance, global loans,
mergers, capital restructuring, etc., initially the merchant banker in India was in the form of
management of public issue and providing financial consultancy for foreign banks.
In 1973, SBI started the merchant banking and it was followed by ICICI. SBI capital
market was set up in August 1986 as a full-fledged merchant banker. Between 1974 and
1985, the merchant banker has promoted lot of companies. However they were brought under
the control of SEBI in 1992.After bringing them the ambit of SEBI regulations there has been
a disciplined growth of the industry.
CHARACTERSTICS OF MERCHANT BANKING:
A Merchant Bank should following characteristics:
High proportion of decision makers as a percentage of total staff
Quick decision process
High density of information
High proportion of professionals to total staff
Flexible organisational structure
a short chain of command
Innovative instead of repetitive operations
High level of financial sophistication.
6. 6
ROLE OF MERCHANT BANKING IN INDIA:
Issue Management
The management of issues for raising funds through various types of instruments by
companies is known as issue management. The different functions of merchant bankers
towards the capital issues management are:
Designing Capital Structure: The term capital structure refers to the proportionate
claims of debt and equity in the capital of a company. These help in making decisions
regarding the use of different types of capital funds in the overall long term
capitalization of a firm by analyzing various affecting factors such as Business
Activity, Stock Market, Taxation, Regulations, and Credit Policy.
Capital Market Instruments: Financial instruments that are used for raising capital
resources in the capital market are known as Capital Market Instruments. E.g.
debentures, shares. These help to determine better source of raising money.
Issue Pricing: The free pricing of equity shares by an infrastructure company is
subject to the compliance with disclosure norms as specified by the SEBI from time to
time.
Book Building: Book building is a process of generating, capturing, and recording
investor demand for shares during an initial public offering (IPO), or other securities
during their issuance process, in order to support efficient price discovery
Preparation of Prospectus: Prospectus is defined a document through which public are
solicited to subscribe to the share capital of a corporate entity. Its purpose is inviting
the public for the subscription/purchase of any securities of a company.
Selection of Bankers: Merchant bankers assist in selecting the appropriate bankers
based on the proposals or projects. Commercial bankers are merely financiers and
their activities are appropriately arrayed around credit proposals, credit appraisal and
loan sanctions. But merchant banking include services like project counseling ,
corporate counseling in areas of capital restructuring amalgamations, mergers,
takeover etc.
Advertising Consultants: Merchant bankers arrange a meeting with company
representatives and advertising agents to finalize arrangements relating to date of
opening and closing of issue, registration, of prospectus, launching publicity
campaign and fixing date of board meeting to approve and sign prospectus and pass
the necessary resolutions.
Banker to the issue
Bankers to the issue, as the name suggests, carries out all the activities of ensuring
that the funds are collected and transferred to the Escrow accounts. The Lead Merchant
Banker shall ensure that Bankers to the Issue are appointed in all the mandatory collection
centres as specified in DIP (Disclosure and Investor Protection) Guidelines. The Lead
Merchant also ensures follow-up with bankers to the issue to get quick estimates of collection
and advising the issuer about closure of the issue, based on the correct figures.
7. 7
Debenture Trustee
A debenture trustee is a person or entity that serves as the holder of debenture
stock for the benefit of another party. When a company is looking to raise capital, one
method of accomplishing this is by issuing stock as a form of debt with the obligation to
repay the debt at a specific interest rate. The trustee serves as a liaison (way of
communication) between the company that issued the debentures and the debenture holders
that are collecting interest payments.
The debenture trustee serves are the official representative for the debenture investors
and is responsible for liquidating the collateral of the trust in the event that the company
defaults on its debentures.
Underwriting
Underwriting refers to the process by which investment banks raise investment capital
from investors on behalf of corporations and governments that are issuing securities
(both equity and debt capital). In banking, underwriting is the practice by which investment
bankers represent corporate and government entities in the initial public offering of their
securities. The investment bankers cover the risk of selling the securities to the public.
The securities underwriting process requires at least two participants, including a
client, such as a corporation or a government entity, and a merchant bank. When an issuer,
such as the company or government, needs to raise money, it turns to the capital markets to
either sell equity or debt. In order to execute the sale, one or more merchant banks are hired
for the securities underwriting process. The merchant bank is responsible
for underwriting those securities, a process that includes pricing, buying, and reselling
those shares back to the public.
Corporate Counselling
Corporate counseling is the beginning of the merchant banking services. Every
industrial unit either new or existing needs it. The scope of corporate counseling is very vast.
It covers a wide range of merchant banking activities and includes the services such as
project counseling, project management, loan syndication, working capital management,
capital re-structuring, public issue management, fixed deposit, lease financing, etc.
Project Counselling
Project counseling has originated from corporate counseling. It relates to project
finance and includes preparation of project reports, cost of the project and also arranging the
financing pattern. The projects are appraised on the basis of the location, marketing and
technical and financial viability of the project.
Beside these, they also play major role in Mergers and Acquisitions, Buy Back
Assignments, Issuing & Paying Agent (IPA) for Commercial Paper Issues, Monitoring
Agency Assignments.
8. 8
Types of Merchant bankers
The categories of Merchant banker are:
Category I – To carry on the activity of issue management and to act as adviser,
consultant, manager, underwriter, portfolio manager.
Category II – To act as adviser, consultant, co-manager, underwriter, portfolio
manager.
Category III – To act as underwriter, adviser or consultant to an issue
Category IV – To act only as adviser or consultant to an issue
Leading merchant bankers in India
In India, there are public sector, private sector as well as foreign players in the
merchant banking industry. Some of the key players are listed below.
Public sector: SBI Capital Markets, Punjab National bank, IFCI Financial Services
Private sector: ICICI Securities, Axis Bank, Bajaj Capital, Tata Capital Markets, Yes
Bank, Kotak Mahindra Capital Company, Reliance Securities
Foreign merchant bankers: Goldman Sachs (India) Securities, Morgan Stanley India,
Barclays Securities (India), Bank of America, Citigroup Global Markets India.
Present scenario of Indian Merchant Banking
India’s strength in Information Technology sector is well known, but it is India’s fast
growing manufacturing sector, driven by approximately three million SME`s (on small and
medium enterprises) in sectors ranging from auto components to industrial goods, that is
rapidly India a leading global manufacturing hub. Debt Financing is not the answer for
SME`s. There seems to an across the board consensus that Indian SME`s have not been able
to fully tap their potential and keep pace with India’s growth because of their inability to
access greater sources of financing. For vast majority of Indian SME`s, the high domestic
interest rate regime (prime rate of 12.75% to 13.25%) continues to be a substantial hindrance.
Furthermore, the ability to raise debt financing outside India (typically referred to as External
Commercial Borrowings (ECBs) is strictly regulated by RBI. No IPO boom for Indian SMEs
in Indian stock markets. The Indian stock markets including the BSE & NSE have essentially
ignored robust Indian SMEs. The avg. size of Indian IPO rose to approximately $100 million
in 2008-09. Meanwhile smaller Indian companies seeking to raise funds of less than that
amount have found it increasingly difficult to raise funds through Indian Stock Markets
listings.
9. 9
According to SEBI only 104 companies raised capital in the range of $2.5 million to
$125 million in March 2007 fiscal year. No companies have raised money in the $1.25
million to $2.5 million range since April 2007. Finally, only 52 companies have been able to
raise funds in the range of $2.5 million to $125 million in March 2008 fiscal year. There are
few smaller Indian IPOs because Indian merchant bankers prefer to work on bigger IPOs that
earn them bigger, as the work required for a small IPO compared to a large IPO is relatively
the same. Also the regional stock exchanges, where the majority of SMEs would list
themselves if possible, face stiff competition from India’s two major stock exchanges BSE &
NSE.
The challenges faced by merchant bankers in India
SEBI guideline has restricted their operations to Issue Management and Portfolio
Management to some extent. So, the scope of work is limited.
In efficiency of the clients are often blamed on to the merchant banks, so they are into
trouble without any fault of their own.
The net worth requirement is very high in categories I and II specially, so many
professionally experienced person/ organizations cannot come into the picture.
Poor New issues market in India is drying up the business of the merchant bankers.
10. 10
Case Study
In this section, detail is given upon various services that are provided by Merchant
Banks in India.
BOB capital Markets Limited
BOB Capital Markets Ltd. (BOBCAPS) is a wholly owned subsidiary of Bank of
Baroda. BOBCAPS is one of the Investment
Banking Companies in India and is a SEBI
registered Category I Investment Banker. We are
shortly commencing Broking/E-broking Business. BOBCAPS offers the entire spectrum of
financial services that includes Initial Public Offerings, Private Placement of Debt, Corporate
Restructuring, Business Valuation, Mergers & Acquisitions, Project Appraisal and Loan
Syndication. BOBCAPS also undertakes advisory services on Securitization and Structuring
of Debts.
Strengths
Patronage of Bank of Baroda
Excellent association with Banks and Financial Institutions
Good relationship with fellow market intermediaries
Large client base consisting of blue chip and midcap companies
Good rapport with regulatory authorities
SERVICES:-
Investment Banking
IPO / Rights Issue / FPO, Mergers & Acquisition, Private Placement of Debt / Equity,
Private Equity Advisory, Corporate Advisory Services, Project Appraisal / TEV Studies,
Debt Syndication, Business Valuation
Retail Broking
Online Trading, Call and Trade, Applying IPOs Online, Applying MFs Online
Institutional Broking
Institutional Equity Broking Services, Equity Research, F & O Dealing and Sales
Mutual Fund Distribution
BOB Capital Markets Ltd. (BOBCAPS), a wholly owned subsidiary of Bank of
Baroda is into Mutual Fund Distribution and Advisory Services. As a distributor we are
11. 11
empanelled with 28 SEBI Registered Mutual Funds in India including SBI, UTI, Reliance,
HDFC, Fidelity, and Franklin Templeton.
Kotak Securities
Kotak Securities Ltd. 100 % subsidiary of Kotak Mahindra Bank is one of the oldest
and largest broking firms in the Industry. It is a subsidiary of Kotak Mahindra bank which
was reconstruction from a private company to a public limited company effective from June
13, 2003. Act as a lead manager to several (IPO’s) & help in Client in accessing the public &
private equity market.
It is also a depository participant with National Securities Depository Limited
(NSDL) and Central Depository Services Limited (CDSL).
Kotak Securities Limited has Rs. 2300 crore of Assets under Management (AUM) as
of 31st March, 2010.
Large Presence: At present Kotak in 331 cities with 843 offices all over the country.
Services:-
stock broking through the branch and Internet,
Investments in IPO,
Mutual funds
Portfolio management service,
Currency Derivatives,
Insurance.
12. 12
IDBI capital
IDBI Capital Market Services Ltd., (IDBI Capital) is
a wholly owned subsidiary of IDBI Bank Ltd and is a
leading Investment Banking & Securities Company. IDBI Capital offers a full suite of
products and services to Corporate, Institutional and Individual clients.
SERVICES:
Investment Banking
Capital Market Products
Private Equity
Corporate Advisory Services
Mergers & Acquisitions
Project Appraisals & Debt Syndication
Stock Broking - Institutional & Retail
Distribution of Financial Products
Debt Placement and Underwriting
Fund Management (Managing Clients' Assets-Pension/PF Fund Managers)
Research Group
IDBI Capital is highly regarded for safety and trust and enjoys a credit rating of “AAA”
by CARE for its medium-term borrowings and P1+ by ICRA for its short-term borrowings.
13. 13
REFRENCES:
Merchant Banking by H.R. Machiraju
https://www.pnbindia.in/En/pdf/MerchantBankingoverview.pdf
http://www.slideshare.net/
http://en.wikipedia.org
https://www.scribd.com/
http://unionbankofindia.co.in
http://www.bobcapitalmarkets.com
http://www.kotaksecurities.com
Do Public Sector Merchant Banks Require Pills to Survive? By Asst. Prof. Jainish
Bhagat and Dr. Keyurkumar M. Nayak.
http://www.investinganswers.com/