1. MERCHANT
BANKING IN
INDIA

2. CONTENTS
 Concept
 Function and Growth
 Government policy on Merchant Banking
services
 SEBI Guidelines
 Future of Merchant Banking in India

3. INTRODUCTION
 In India, Merchant bankers are a body
corporate who carries on any activity of
the issue management, which consist of
preparing prospectus and other
information relating to the issue. Merchant
banks in India are not allowed to conduct
any business other than that related to
securities market. There is no official
category in investment banking.

4. DEFINITION
 According to Coax. Merchant banking is
defined as" merchant banks are the
financial institution providing specialist
services which generally include
acceptance of bills of exchange, corporate
finance, portfolio management and other
banking services”.

5. HISTORY AND ORIGIN OF
MERCHANT BANKING IN INDIA
 Origin
 Merchant banking in India historical
perspective
 Merchant bank
 The most familiar role of the merchant
bank is stock underwriting
 Importance and need of merchant banking

6. ROLE OF MERCHANT BANKER
 Main objectives of merchant bankers
 Responsibilities of merchant bankers
 Code of conduct

7. THE GROWTH OF MERCHANT
BANKING IN INDIA
 Formal merchant activity in India was originated in 1969
with the merchant banking division setup by Grind Lays
Bank, the largest foreign bank in the country. the main
service offered at that time to the corporate enterprises
by the merchant banks included the management of
public issues and some aspects of financial consultancy.
Following Grind Lays Bank ,Citibank setup its merchant
banking division in 1970. banking commission in
1972,that Indian banks should offer merchant banking
services as part of the multiple services, state bank of
India started the merchant banking division in 1972.bank
of india and syndicate bank in 1977.bank of baroda
started charted bank mercantile bank in 1978 and united
bank of india.

8. SERVICES PROVIDE BY
MERCHANT BANKS
 Corporate counseling
 Project counseling
 Credit syndication and project finance
 Issue management and underwriting
 Underwriting of public issue
 Bankers to the issue
 Portfolio management
Advisory services relating to mergers and
takeovers:-
 Venture capital financing
 Leasing
 Non-resident investment counseling and management

9.  Acceptance credit and bill discounting
 Advising on mergers, amalgamations and
take-over
 Arranging offshore finance
 Management of fixed deposit broking
 Relief to sick industries

10. GUIDELINES OF SEBI
 If any company’s other income exceeds 10% of the total
income, the detail should be disclosed.
 The minimum application money payable should not be
less than 25% of the issue price.
 The company should disclose the time normally taken for
the disposal of various types of investor’s grievances.
 The company can make firm allotments in public issues
as follows-
• Indian mutual funds(20%)
• FIIS(24%)
• Regular employees of the company(10%)
• Financial institutions(20%)

11. FUTURE OF MERCHANT
BANKING
 Time and again the merchant banking industry
UN India witnessed, experienced and underwent
significant changes. The very purpose for which
these firms are commencing there services
should be taken care of and they should mould
there policy decision and activities to move in
tune with the main objective of investors
protection and to create healthy environment in
capital markets. No doubt ,merchant banking
firms are subject to a host of control measures,
regulations and rules framed and guided SEBI.

12. THANKYOU