Merchant banks are financial institutions that provide specialized non-deposit taking banking services like corporate financing, mergers and acquisitions advisory, project financing, and securities underwriting. They work with large corporations and do not provide retail banking services to the general public. Merchant banks deal extensively in international finance and business loans. They help companies raise funds through private placements, debt/equity offerings, and provide other advisory services. Unlike investment banks, merchant banks do not underwrite and sell securities to the public through IPOs.
SEBI (Securities and Exchange Board of India) was established in 1988 to regulate the securities market in India. SEBI aims to protect investors, maintain orderly markets, and promote market development. It oversees stock exchanges, registers market intermediaries like brokers and merchant bankers, and regulates substantial acquisitions of shares and takeovers. SEBI is divided into departments and has offices across major Indian cities. It works with advisory committees to achieve its goals of regulating primary and secondary markets and protecting investors.
The document provides an overview of the Securities and Exchange Board of India (SEBI). It discusses that SEBI was established in 1988 and upgraded to a statutory board in 1992. SEBI's main objectives are to protect investors' interests and ensure the orderly growth of the securities market. It regulates market intermediaries and enforces regulations regarding issues like insider trading and takeovers. The document also summarizes SEBI's role, powers, departments and its involvement in investigating the Satyam scam.
Investors Protection-Grievances and their Redressal for B.Com, M.ComDr. Toran Lal Verma
Investors in India face high risks of fraud and unethical practices. To address grievances, measures have been established to protect investors, including grievance cells in stock exchanges, the SEBI, and Company Law Board. Common grievances are against companies for issues like delayed payments or transfers, and against brokers for delayed deliveries or payments. Investors can seek resolution through these organizations, courts, or by reporting issues to the press. The SEBI and stock exchanges work to resolve complaints, including suspending trading or transferring stocks of non-compliant companies. This aims to restore investor confidence in India's financial markets.
Financial engineering involves the design and implementation of innovative financial products and processes. It deals with creating new financial instruments or repackaging existing ones. Some examples of financial engineering in India include debt-oriented mutual funds, interest rate futures, and floating rate bonds. Financial engineering can be applied to equity, debt, hybrid instruments, and derivatives. It is used by investment banks and for purposes like risk management, valuation, and portfolio management. The field needs further development to provide more choices for investors and corporations to improve financial efficiency and solutions.
The document discusses depository services in India. It explains that a depository is an institution where investors can hold financial assets like stocks, bonds, and mutual funds in dematerialized form. The two major depositories in India are NSDL and CDSL. It describes how the depository system works through depository participants, issuing companies, and stock exchanges. It outlines the advantages and disadvantages of the depository system and the roles of NSDL and CDSL in the capital markets. Finally, it defines depository participants and their functions in providing depository services.
Sources of Finance Functions and Investment Policies of NBFIs in India RBI Gu...Mohammed Jasir PV
Sources of Finance
Functions and Investment Policies of NBFIs in India
RBI Guidelines on NBFCs
Products offered by different NBFCs in India
Features of these Financial Products
This presentation include Introduction, Origin, Indian scenario, Definition, Growth, category ,Prospectus, Function, Quality Problem and Guideline for Merchant Banking.
Amalgamation, absorption and purchase considerationBIJIN PHILIP
This presentation contain information regarding amalgamation, absorption, types of amalgamation, purchase consideration and different methods of calculating purchase consideration.
SEBI (Securities and Exchange Board of India) was established in 1988 to regulate the securities market in India. SEBI aims to protect investors, maintain orderly markets, and promote market development. It oversees stock exchanges, registers market intermediaries like brokers and merchant bankers, and regulates substantial acquisitions of shares and takeovers. SEBI is divided into departments and has offices across major Indian cities. It works with advisory committees to achieve its goals of regulating primary and secondary markets and protecting investors.
The document provides an overview of the Securities and Exchange Board of India (SEBI). It discusses that SEBI was established in 1988 and upgraded to a statutory board in 1992. SEBI's main objectives are to protect investors' interests and ensure the orderly growth of the securities market. It regulates market intermediaries and enforces regulations regarding issues like insider trading and takeovers. The document also summarizes SEBI's role, powers, departments and its involvement in investigating the Satyam scam.
Investors Protection-Grievances and their Redressal for B.Com, M.ComDr. Toran Lal Verma
Investors in India face high risks of fraud and unethical practices. To address grievances, measures have been established to protect investors, including grievance cells in stock exchanges, the SEBI, and Company Law Board. Common grievances are against companies for issues like delayed payments or transfers, and against brokers for delayed deliveries or payments. Investors can seek resolution through these organizations, courts, or by reporting issues to the press. The SEBI and stock exchanges work to resolve complaints, including suspending trading or transferring stocks of non-compliant companies. This aims to restore investor confidence in India's financial markets.
Financial engineering involves the design and implementation of innovative financial products and processes. It deals with creating new financial instruments or repackaging existing ones. Some examples of financial engineering in India include debt-oriented mutual funds, interest rate futures, and floating rate bonds. Financial engineering can be applied to equity, debt, hybrid instruments, and derivatives. It is used by investment banks and for purposes like risk management, valuation, and portfolio management. The field needs further development to provide more choices for investors and corporations to improve financial efficiency and solutions.
The document discusses depository services in India. It explains that a depository is an institution where investors can hold financial assets like stocks, bonds, and mutual funds in dematerialized form. The two major depositories in India are NSDL and CDSL. It describes how the depository system works through depository participants, issuing companies, and stock exchanges. It outlines the advantages and disadvantages of the depository system and the roles of NSDL and CDSL in the capital markets. Finally, it defines depository participants and their functions in providing depository services.
Sources of Finance Functions and Investment Policies of NBFIs in India RBI Gu...Mohammed Jasir PV
Sources of Finance
Functions and Investment Policies of NBFIs in India
RBI Guidelines on NBFCs
Products offered by different NBFCs in India
Features of these Financial Products
This presentation include Introduction, Origin, Indian scenario, Definition, Growth, category ,Prospectus, Function, Quality Problem and Guideline for Merchant Banking.
Amalgamation, absorption and purchase considerationBIJIN PHILIP
This presentation contain information regarding amalgamation, absorption, types of amalgamation, purchase consideration and different methods of calculating purchase consideration.
This document discusses depository services in India. It explains that depository services allow for the electronic holding of securities and enable transactions to be processed via book entries. There are two main depositories - National Securities Depository Limited and Central Depository Services Limited - that interface with investors through depository participants like banks and stockbrokers. The depository system works similarly to the banking system, with a central authority and transactions occurring through associated participants rather than directly with the central authority.
This document discusses bought out deals (BOD), where a company sells shares directly to sponsors or investors with an agreement to do an initial public offering later. In a BOD:
- A company sells shares to sponsors/investors at a negotiated price upfront in exchange for immediate funds.
- After a period of time, the sponsors offer the shares to the public at a premium to make a profit.
- BODs provide quick funding for companies and allow sponsors to potentially profit when shares are later listed on an exchange at higher prices. However, BODs also carry risks for sponsors if the company does not perform as expected.
Financial Markets, Institutions and Financial Services.AaimanSiddiqui1
This document provides an overview of financial markets and institutions. It defines financial markets as places where bonds, equity, securities and currencies are traded. It describes various components of financial markets including bonds, equity, securities and currencies. It also discusses key functions of financial markets such as mobilizing savings, determining security prices, and providing liquidity. The document further classifies financial markets based on the nature of claims, maturity of claims, timing of delivery and organizational structure. It then defines financial institutions and describes types including depository institutions like banks and non-depository institutions. Finally, it provides examples of different financial institutions in India.
This document discusses various international financial instruments, including:
1. Equity instruments such as American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) which allow foreign companies to issue shares in domestic markets.
2. Debt instruments including foreign bonds issued domestically, external bonds denominated in foreign currency, Euro bonds issued internationally, and European bonds issued collectively by Euro nations.
3. Key details are provided on ADRs, GDRs, foreign bonds such as Yankee bonds, and Euro bonds which were first issued in 1963 to fund Italy's motorway network.
This document provides an overview of a presentation on venture capital. It includes definitions of venture capital, the nature and scope of venture capital, regulatory framework, problems with venture capital, the venture capital investment process, the current scenario in India, global experience, and conclusions. The document outlines topics that will be covered in the presentation and provides background information on venture capital concepts.
Forfeiting is the process of purchasing a company's export receivables at a discount for cash. It involves an exporter selling its receivables from export sales to a forfeiting company, which then receives payment from the importer. This converts deferred export payments into immediate cash for the exporter, while absorbing the risks normally borne by exporters such as political and currency risk. Forfeiting provides exporters with liquidity and freedoms them from credit administration and risk, while absorbing the importer's risk for the forfeiting company in exchange for a discount on the receivables.
Forfaiting is a mechanism where an exporter's rights to export receivables such as letters of credit or bills of exchange are purchased by a financial intermediary called a forfaiter without recourse to the exporter. This converts the exporter's credit sale into a cash sale, absolving the exporter of political or conversion risks while providing up to 100% financing without recourse. The key parties involved are the exporter, importer, forfaiting agency which is typically the exporter's bank, the importer's guaranteeing bank, and domestic export-import banks. Forfaiting provides liquidity to exporters, fixes the financing rate, and keeps the transactions confidential.
Indian Depository Receipts (IDRs) allow foreign companies to raise capital from Indian investors in their home market. IDRs are issued by a domestic depository and represent underlying shares of the foreign company held in custody by an overseas custodian. Key features include being listed and traded on Indian stock exchanges, providing exposure to foreign stocks for Indian investors within the Indian regulatory framework, and allowing investors rights equivalent to shareholders such as voting and dividends. However, currency risk and lack of attendance at shareholder meetings are limitations of IDRs. Strict eligibility criteria, approvals, and disclosure guidelines regulate the issuance of IDRs in India.
The financial system consists of four main parts: financial assets, financial institutions, financial markets, and financial services. It enables financial transactions through an institutional framework regulated by organizations like RBI, SEBI, and IRDA. The system channels funds from surplus to deficit units through various financial instruments for savers like deposits and bonds, and for borrowers like loans. It mobilizes savings through institutions like banks and invests them in markets like money markets for short-term funds and capital markets for long-term funds.
The secondary market, also known as the stock market, provides liquidity to existing financial securities through trading on a stock exchange. It is regulated through processes like stock exchange recognition, security listing, and broker registration. Key functions of the secondary market include providing an ideal meeting place for buyers and sellers, ensuring safety and liquidity for investors, facilitating speculative trading and resource allocation, and disseminating market data. It involves various players like brokers, investors, clearing corporations, depositories, and clearing banks to facilitate trading, clearing, and settlement.
Consumer finance refers to granting credit to consumers to purchase goods for everyday use through installment plans. There are different types of consumer credit like revolving credit (credit cards), fixed credit (loans), and cash loans. Sources of consumer finance include traders, commercial banks, credit card companies, NBFCs, and credit unions. Factors driving demand for consumer finance are increasing income, installment payment plans, and growth in households. Products covered include cars, appliances, and electronics. Terms of financing evaluate borrowers' income, employment, guarantees, interest rates, and fees. While consumer credit allows purchases and economic growth, it can also lead to overspending, insolvency, high costs, bad debts, and economic instability.
17 rights and_privileges_of_shareholdersMark Anders
The document discusses the rights and privileges of shareholders in a company. It outlines several key rights including the right to obtain company documents, transfer shares, attend general meetings, vote, receive dividends, inspect meeting minutes, and participate in director elections. It also discusses how strong investor protections are important for effective corporate governance and can help reduce agency costs by aligning manager and shareholder objectives.
Currency swaps allow two parties to exchange interest payments and principal on loans denominated in different currencies. For example, a British company issuing bonds in pounds could use a currency swap to exchange its pound-denominated debt obligations for dollar-denominated obligations to fund a project in the US. Similarly, a US company could issue dollar bonds but use a currency swap to take on pound obligations to fund a project in the UK. The currency swap protects both parties from exchange rate risk over the life of the loans. However, there is credit risk if one party defaults on exchanging the principal amounts at maturity. Parties employ collateral, netting agreements, credit derivatives and marking to market to mitigate this risk.
ICRA is India's second largest credit rating agency. It was established in 1991 as the Investment Information and Credit Rating Agency of India. ICRA issues credit ratings for various types of debt instruments and entities. It also provides grades for IPOs, microfinance institutions, and sectors like cement, tea, and mobile services. The document outlines ICRA's methodology for assigning ratings and grades based on factors like business strategy, financial performance, management quality, and macroeconomic risks.
This document discusses asset liability management (ALM) in banks. It defines ALM as a mechanism to address risks from mismatches between bank assets and liabilities due to liquidity or interest rate changes. The ALM framework focuses on profitability and viability. It aims to match asset and liability maturities across time horizons. The objectives of ALM include managing liquidity risk, interest rate risk, and currency risks to stabilize profits and the bank's financial position. Tools used in ALM include information systems, organizational structure, and processes to identify, measure and manage various risks.
Retail banking provides financial services to individual consumers rather than businesses. Services include checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit. Retail banks offer loans for personal, home, vehicle, education, and farm equipment purposes. They also provide services like bill payment, electronic funds transfer, travelers cheques, foreign currency exchange, NRI bank accounts, distribution channels like branches and ATMs, and demat account operations.
This document discusses the capital market and secondary market in India. It defines the key terms like money market, capital market, primary market and secondary market. The secondary market refers to the market where securities are traded after the initial public offering. The document also describes the role of brokers and sub-brokers in trading, the trading process, settlement process, brokerage and other charges involved in trading. It provides details on various concepts related to stock exchanges like corporatization, demutualization and obligations of brokers.
Factoring and forfeiting are mechanisms for financing exports. Factoring involves purchasing a company's accounts receivables to provide working capital, while forfeiting involves discounting export bills or promissory notes without recourse to the exporter. There are benefits to both exporters and importers such as improved cash flow, risk mitigation, and access to longer term financing. The key differences are that factoring is for ongoing domestic or export sales while forfeiting is for single export transactions backed by letters of credit or guarantees.
One of the oldest forms of business financing, factoring is the cash-management tool of choice for many companies. Factoring is very common in certain industries, such as the clothing industry, where long receivables are part of the business cycle.
Brief information about merchant banking institutions in india, meaning,
Origin, capital adequacy requirement, category of merchant banks, merchant bank services etc...
This document discusses depository services in India. It explains that depository services allow for the electronic holding of securities and enable transactions to be processed via book entries. There are two main depositories - National Securities Depository Limited and Central Depository Services Limited - that interface with investors through depository participants like banks and stockbrokers. The depository system works similarly to the banking system, with a central authority and transactions occurring through associated participants rather than directly with the central authority.
This document discusses bought out deals (BOD), where a company sells shares directly to sponsors or investors with an agreement to do an initial public offering later. In a BOD:
- A company sells shares to sponsors/investors at a negotiated price upfront in exchange for immediate funds.
- After a period of time, the sponsors offer the shares to the public at a premium to make a profit.
- BODs provide quick funding for companies and allow sponsors to potentially profit when shares are later listed on an exchange at higher prices. However, BODs also carry risks for sponsors if the company does not perform as expected.
Financial Markets, Institutions and Financial Services.AaimanSiddiqui1
This document provides an overview of financial markets and institutions. It defines financial markets as places where bonds, equity, securities and currencies are traded. It describes various components of financial markets including bonds, equity, securities and currencies. It also discusses key functions of financial markets such as mobilizing savings, determining security prices, and providing liquidity. The document further classifies financial markets based on the nature of claims, maturity of claims, timing of delivery and organizational structure. It then defines financial institutions and describes types including depository institutions like banks and non-depository institutions. Finally, it provides examples of different financial institutions in India.
This document discusses various international financial instruments, including:
1. Equity instruments such as American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) which allow foreign companies to issue shares in domestic markets.
2. Debt instruments including foreign bonds issued domestically, external bonds denominated in foreign currency, Euro bonds issued internationally, and European bonds issued collectively by Euro nations.
3. Key details are provided on ADRs, GDRs, foreign bonds such as Yankee bonds, and Euro bonds which were first issued in 1963 to fund Italy's motorway network.
This document provides an overview of a presentation on venture capital. It includes definitions of venture capital, the nature and scope of venture capital, regulatory framework, problems with venture capital, the venture capital investment process, the current scenario in India, global experience, and conclusions. The document outlines topics that will be covered in the presentation and provides background information on venture capital concepts.
Forfeiting is the process of purchasing a company's export receivables at a discount for cash. It involves an exporter selling its receivables from export sales to a forfeiting company, which then receives payment from the importer. This converts deferred export payments into immediate cash for the exporter, while absorbing the risks normally borne by exporters such as political and currency risk. Forfeiting provides exporters with liquidity and freedoms them from credit administration and risk, while absorbing the importer's risk for the forfeiting company in exchange for a discount on the receivables.
Forfaiting is a mechanism where an exporter's rights to export receivables such as letters of credit or bills of exchange are purchased by a financial intermediary called a forfaiter without recourse to the exporter. This converts the exporter's credit sale into a cash sale, absolving the exporter of political or conversion risks while providing up to 100% financing without recourse. The key parties involved are the exporter, importer, forfaiting agency which is typically the exporter's bank, the importer's guaranteeing bank, and domestic export-import banks. Forfaiting provides liquidity to exporters, fixes the financing rate, and keeps the transactions confidential.
Indian Depository Receipts (IDRs) allow foreign companies to raise capital from Indian investors in their home market. IDRs are issued by a domestic depository and represent underlying shares of the foreign company held in custody by an overseas custodian. Key features include being listed and traded on Indian stock exchanges, providing exposure to foreign stocks for Indian investors within the Indian regulatory framework, and allowing investors rights equivalent to shareholders such as voting and dividends. However, currency risk and lack of attendance at shareholder meetings are limitations of IDRs. Strict eligibility criteria, approvals, and disclosure guidelines regulate the issuance of IDRs in India.
The financial system consists of four main parts: financial assets, financial institutions, financial markets, and financial services. It enables financial transactions through an institutional framework regulated by organizations like RBI, SEBI, and IRDA. The system channels funds from surplus to deficit units through various financial instruments for savers like deposits and bonds, and for borrowers like loans. It mobilizes savings through institutions like banks and invests them in markets like money markets for short-term funds and capital markets for long-term funds.
The secondary market, also known as the stock market, provides liquidity to existing financial securities through trading on a stock exchange. It is regulated through processes like stock exchange recognition, security listing, and broker registration. Key functions of the secondary market include providing an ideal meeting place for buyers and sellers, ensuring safety and liquidity for investors, facilitating speculative trading and resource allocation, and disseminating market data. It involves various players like brokers, investors, clearing corporations, depositories, and clearing banks to facilitate trading, clearing, and settlement.
Consumer finance refers to granting credit to consumers to purchase goods for everyday use through installment plans. There are different types of consumer credit like revolving credit (credit cards), fixed credit (loans), and cash loans. Sources of consumer finance include traders, commercial banks, credit card companies, NBFCs, and credit unions. Factors driving demand for consumer finance are increasing income, installment payment plans, and growth in households. Products covered include cars, appliances, and electronics. Terms of financing evaluate borrowers' income, employment, guarantees, interest rates, and fees. While consumer credit allows purchases and economic growth, it can also lead to overspending, insolvency, high costs, bad debts, and economic instability.
17 rights and_privileges_of_shareholdersMark Anders
The document discusses the rights and privileges of shareholders in a company. It outlines several key rights including the right to obtain company documents, transfer shares, attend general meetings, vote, receive dividends, inspect meeting minutes, and participate in director elections. It also discusses how strong investor protections are important for effective corporate governance and can help reduce agency costs by aligning manager and shareholder objectives.
Currency swaps allow two parties to exchange interest payments and principal on loans denominated in different currencies. For example, a British company issuing bonds in pounds could use a currency swap to exchange its pound-denominated debt obligations for dollar-denominated obligations to fund a project in the US. Similarly, a US company could issue dollar bonds but use a currency swap to take on pound obligations to fund a project in the UK. The currency swap protects both parties from exchange rate risk over the life of the loans. However, there is credit risk if one party defaults on exchanging the principal amounts at maturity. Parties employ collateral, netting agreements, credit derivatives and marking to market to mitigate this risk.
ICRA is India's second largest credit rating agency. It was established in 1991 as the Investment Information and Credit Rating Agency of India. ICRA issues credit ratings for various types of debt instruments and entities. It also provides grades for IPOs, microfinance institutions, and sectors like cement, tea, and mobile services. The document outlines ICRA's methodology for assigning ratings and grades based on factors like business strategy, financial performance, management quality, and macroeconomic risks.
This document discusses asset liability management (ALM) in banks. It defines ALM as a mechanism to address risks from mismatches between bank assets and liabilities due to liquidity or interest rate changes. The ALM framework focuses on profitability and viability. It aims to match asset and liability maturities across time horizons. The objectives of ALM include managing liquidity risk, interest rate risk, and currency risks to stabilize profits and the bank's financial position. Tools used in ALM include information systems, organizational structure, and processes to identify, measure and manage various risks.
Retail banking provides financial services to individual consumers rather than businesses. Services include checking and savings accounts, mortgages, personal loans, credit cards, and certificates of deposit. Retail banks offer loans for personal, home, vehicle, education, and farm equipment purposes. They also provide services like bill payment, electronic funds transfer, travelers cheques, foreign currency exchange, NRI bank accounts, distribution channels like branches and ATMs, and demat account operations.
This document discusses the capital market and secondary market in India. It defines the key terms like money market, capital market, primary market and secondary market. The secondary market refers to the market where securities are traded after the initial public offering. The document also describes the role of brokers and sub-brokers in trading, the trading process, settlement process, brokerage and other charges involved in trading. It provides details on various concepts related to stock exchanges like corporatization, demutualization and obligations of brokers.
Factoring and forfeiting are mechanisms for financing exports. Factoring involves purchasing a company's accounts receivables to provide working capital, while forfeiting involves discounting export bills or promissory notes without recourse to the exporter. There are benefits to both exporters and importers such as improved cash flow, risk mitigation, and access to longer term financing. The key differences are that factoring is for ongoing domestic or export sales while forfeiting is for single export transactions backed by letters of credit or guarantees.
One of the oldest forms of business financing, factoring is the cash-management tool of choice for many companies. Factoring is very common in certain industries, such as the clothing industry, where long receivables are part of the business cycle.
Brief information about merchant banking institutions in india, meaning,
Origin, capital adequacy requirement, category of merchant banks, merchant bank services etc...
Merchant banking provides non-fund based financial services like advising on mergers and acquisitions, underwriting securities issuances, and portfolio management. It originated in Italy and England in the 12th-18th centuries and was formally introduced to India in 1967. Merchant banking plays an important role in the growing Indian economy by facilitating corporate fundraising and restructuring, project financing, and connecting companies to capital markets.
Merchant banking refers to a wide range of financial services including underwriting shares, portfolio management, project counseling, and insurance provided by both commercial and investment banks for a fee. Merchant bankers act as intermediaries between companies raising funds and investors by advising on issues like corporate mergers and underwriting corporate securities. They provide services like promotional activities, issue management, credit syndication, project counseling, portfolio management, and working capital finance to help businesses obtain financing.
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.
Merchant banking provides capital to companies through equity investment rather than loans. It offers advisory services on corporate matters and investment banking services like mergers and acquisitions. Merchant banking started in Italy and France in the 17th-18th centuries and modern merchant banking began in London by financing foreign trade through bill acceptance. In India, merchant banking was introduced by Grindlays Bank in 1967 and other Indian and foreign banks subsequently established merchant banking divisions. Merchant banks invest their own capital and provide services primarily to large corporations and high-net-worth individuals rather than retail banking.
1. Merchant banking provides a wide range of financial services including underwriting shares, portfolio management, project counseling, and insurance for a fee.
2. Some key functions of merchant banking include project counseling, loan syndication, issue management, portfolio management, capital restructuring services, and arranging working capital finance.
3. Merchant bankers are also involved in public issues, lease financing, venture capital funding, and helping companies raise public deposits.
Development of financial institutions in NepalPawan Kawan
Financial institutions play a key role in the economy by facilitating transactions and the flow of money. In Nepal, there are various types of financial institutions that serve different functions:
- Commercial banks accept deposits and provide business loans and basic investment services. Nepal's first commercial bank was Nepal Bank Ltd.
- Development banks like the Nepal Development Bank Limited provide medium and long-term financing to support sectors like industry and agriculture.
- Other financial institutions in Nepal include finance companies, microcredit banks, cooperatives, and non-governmental organizations. As of 2012 there were over 300 registered financial institutions operating in Nepal.
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.
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.
Merchant banking refers to a range of financial services including underwriting shares, portfolio management, project counseling, and insurance provided by both commercial and investment banks for a fee. Merchant bankers play an important role as intermediaries between companies raising funds and investors. They perform various functions such as promotional activities, issue management, credit syndication, project counseling, portfolio management, and mergers and acquisitions. Merchant banking activities in India are regulated by the Securities and Exchange Board of India (SEBI). Other key players in the capital markets include underwriters, bankers to an issue, brokers to an issue, and registrars and share transfer agents.
A merchant bank provides capital to companies through equity ownership rather than loans. It advises companies on corporate matters and helps with promotional activities like project conception, feasibility studies, and government approvals. Historically, merchant banks managed public stock offerings and provided other services like underwriting, credit syndication, leasing and portfolio management. Today, merchant banks continue to offer advisory services and assist with issuing and servicing debt and equity securities.
A merchant bank provides a wide range of financial services such as underwriting shares, portfolio management, project counseling, credit syndication, and insurance. They facilitate international transactions for multinational corporations. For example, a US company wanting to acquire a German company would hire a merchant bank to advise on structuring the transaction and assist with financing. Merchant banks must be authorized by the Securities and Exchange Board of India (SEBI) and meet capital adequacy requirements to operate in India.
Merchant banking involves a wide range of financial services including underwriting shares, portfolio management, project counseling, and insurance. Merchant banks facilitate production, trade, and financing by raising capital from investors for companies. They advise companies on fundraising and corporate mergers/acquisitions. To act as a merchant banker, one must be registered with the Securities and Exchange Board of India and meet certain capital adequacy and operations requirements. Merchant bankers help companies with various financial functions like project promotion, issuing securities, credit syndication, and portfolio management. They are regulated to protect investors and maintain high standards of conduct.
Merchant banking refers to a range of financial services including underwriting shares, portfolio management, project counseling, and insurance provided by commercial and investment banks for a fee. Merchant banks act as intermediaries between companies raising funds and investors. They advise on corporate mergers and underwritings, help structure securities issues, and arrange financing from financial institutions and capital markets. To operate as a merchant banker in India, one must register with the Securities and Exchange Board of India and meet certain capital adequacy and operational capability requirements.
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.
Financial services refer to services provided by banks and other financial institutions, including mobilizing and allocating savings, providing loans, insurance, investment products, and more. Some key types of financial institutions discussed are commercial banks, cooperative banks, and non-banking financial institutions. Financial markets allow for short-term lending and capital raising. Financial instruments can be primary, secondary, short-term, long-term or medium-term. Financial services are classified as fund-based, involving direct investment of funds, or fee-based, where institutions earn fees through specialized services.
Merchant banks provide a wide range of financial services including underwriting shares, portfolio management, project counseling, and insurance. They act as intermediaries between companies raising funds and investors. Some key functions of merchant banks include promotional activities, issue management, credit syndication, project counseling, portfolio management, and mergers and acquisitions advisory. Merchant banks must be registered with the Securities and Exchange Board of India and comply with regulations regarding capital adequacy, code of conduct, and other responsibilities.
this is a presentation on an introduction to investment banking highlighting the key functions of an investment bank, comparing commercial bank and Investment Bank, highlighting the organizational structure of Investment banks, and Investment banking scenario in india.
Zodiac Signs and Food Preferences_ What Your Sign Says About Your Tastemy Pandit
Know what your zodiac sign says about your taste in food! Explore how the 12 zodiac signs influence your culinary preferences with insights from MyPandit. Dive into astrology and flavors!
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Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
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2. What is a ‘Merchant Bank’?
As Investopedia defines it, a Merchant Bank is a
company that deals mostly in international finance,
business loans for companies and underwriting. These
banks are experts in international trade, which makes
them specialists in dealing with multinational
corporations.
However, it does not provide regular banking services
to the general public.
3. • Perform underwriting, loan services, financial advising and
fund raising services
• Serve large corporations (operating in more than one
country) and high net worth individuals
• These do not provide regular banking services, such as
offering checking accounts to the general public. In fact,
merchant banks don’t take deposits.
• A vast majority of activity involves international
transactions
4. Merchant Banks
* Merchant Banks are financial
institutions that provide specialised
services in corporate finance,
portfolio management, issue
management and banking services.
* A merchant bank typically works
with companies that may not be large
enough to raise funds through an
IPO; help corporations issue
securities through private
placements, which require less
regulatory disclosure and are sold
to sophisticated investors.
Investment Banks
* Investment Banks are specialised
intermediaries which provide
services in marketing of securities
for companies, and channelize savings
into profitable investments for
individuals.
* Investment banks, on the other
hand, underwrite and sell securities
to the general public through IPOs.
The bank’s clients are large
corporations
5. Merchant Banks
Commercial Banks
*Merchant banks are in the
business of helping corporations
to get the required funds. It offers
a range of services from corporate
financing to loan arranging.
*Perform security-related
activities
*Governed by Merchant Bankers
Rules and Regulations issued by
Ministry of Finance and SEBI
*Commercial banks take deposits
from customers, which may be
individuals or corporate, and
provide payment transmission
services, savings and loan facilities.
*Perform deposit and lending
activities
*Governed by the Banking
Regulation Act, 1949 and RBI
directives.
6. Development Banks and
Merchant Banking
Development banks are the specialized financial
institutions because they provide not only finances
but also help in promotion of new enterprises.
7. • Promote the development of industry or agriculture.
• Provide medium and long term loans.
• Offering concessional loans for setting up industrial
units in backward areas.
• Evaluating investment proposals.
• Identifying possibilities for economies of scale in
production.
Role of Development
Banks
8. Evolution of Merchant Banking
• It was in 1813, when merchants came from European
countries to trade with India.
• Agency houses were set up by merchant bankers based
at London.
Raise deposits at cheaper rate
Made advances at higher rate
• During 19th century, foreign merchant bankers operated in
India “East India House”.
9. • Managing Agency House- 600 industrial
establishments managed by managing agency
system in 1951.
E.g.: Tata's, Birla's, etc.
• Functions performed by managing agency houses
are;-
Investing Funds
Assist the enterprise in procuring
finance
Raising Public Deposits
10. • In 1948, Industrial Finance Corporation of India (IFCI) was
set up to provide long and medium term finance to
industrial enterprise.
• In 1955, The Industrial Credit and Investment Corporation
of India (ICICI) was set up provide developmental finance
to industrial concerns.
11. Functions of Merchant
Banking
• 1. Corporate Counseling
Free of charge service to a corporate units
Render advise
Help to improve performance and build better
image among investors.
Counseling is provided in the form of opinions,
suggestions.
12. • Areas of counseling includes-
It guides the corporate units as to area of
diversification.
Detailed market analysis.
Help in reviving the old line projects.
It offers help to the sick units in the
following ways-
i. Conducts detailed studies.
ii. Make an assessment of the revival prospects.
13. iii. Providing help in raising loans.
iv. Help in getting approval of financial
institutions or banks for schemes of
rehabilitation.
v. Monitors rehabilitation schemes
vi. Finds out possibility of takeover of sick
units
14. Project Counselling broadly covers the study of the
project and providing advisory services on the
project viability and procedural steps to be
followed for its implementation.
2.PROJECT
COUNSELLING
15. Project Counselling covers the following aspects-
• Development and or review of an project
idea/project profile
• Preparation of project report
• Estimation of cost of project
• Deciding means of financing the project
• Studying the procedural aspects of project
implementation
• Provide assistance in obtaining Government
consent.
16. • Amalgamations , mergers and takeovers
• Profitability study of the project
• Guiding young entrepreneurs as to investment
opportunities in India.
• Shaping the pattern of financing,etc.
Other Services In The Field
Of Project Counselling
• Capital structuring
18. Capital Restructuring
Services may include the
following services-
• Examination of the corporate’s capital structure to
decide the extent of capitalization
• Render advise on mergers, takeovers and
amalgamations
• Identify areas of diversification of existing
production systems .
19. CASE
• Bonus Issue
Companies governed by
FERA
Sick Units
SERVICE RENDERED BY
MERCHANT BANK
• Help client in preparing
Memorandum for Controller of
Capital Issue (CCI) .
Suggest an alternative capital
structure which is in conformity
with legal requirements
Also advises company on
disinvestment issues to their
maximum advantage
• Suggest appropriate capital
structure helpful in revival
• Also advise on means of bringing
fresh capital into business.
20. 4. PORTFOLIO
MANAGEMENT
Merchant banks provide services to the investor of
advising on the optimum investment mix taking into
consideration the following factors-
I. Objectives of investment
II. Tax bracket applicable to the investor
III. Need for maximising return
IV. Capital appreciation,etc.
21. Sale and purchase of securities
investing and purchase of securities
Investing and managing fixed deposits
Safe custody of securities in India and overseas ,
etc.
Portfolio Management
Services
A. To Indian Nationals-
22. B. To Non-Resident Indians-
Advice on selection of investment
Critical evaluation of investment
portfolio
Hold securities in safe custody
Providing tax counseling and filing tax
returns , etc.
23. 5. Issue Management
Besides being a sponsor of issues , merchant banks now
provide the following services to ensure success in
marketing of securities-
Preparation of prospectus
Preparation of a budget
Preparation of (Controller of Capital Issues)CCI
application
Selection of issue house
Appointment of registrar, broker and bankers to issue
Advertising and arranging publicity agency for post and
pre-issue.
Selection of institutional and broker underwriters .
Compliance of listing requirements of stock exchange
etc.
24. 6.Loan/Credit Syndication
Credit Syndication involve following services-
Estimation of total cost on project
Preparation of financial plan to meet total cost of project
Assistance of clients in preparation of loan application
Making selection of institutions
Follow up of the term loan application with financial institutions.
Helping in expediting legal documentation formalities
Help in estimating working capital requirements
Arrange bridge finance.
25. 7. Arranging Working
Capital Finance
• Earlier working capital finance – not merchant bank
activity rather commercial bank’s activity.
• Merchant Banks which started this activity : -
Canara Bank
- Grindlays Bank -
Central Bank of India
• Finance for working capital is provided usually
through issue of debentures.
26. Canara Bank-advisory
services-related to working
capital finance.
• Estimation of working capital requirements
• Assistance in preparing the application for credit
facilities for submission to the bankers and RBI.
27. • Assistance in negotiations for sanction of appropriate credit facilities.
• Helps in expediting documentation and other
formalities for disbursements.
• Advises the client for issue of debentures for
meeting the increased long term working capital
requirements of the client company.
28. 8. Lease Finance
• Leasing is the arrangement that provides a firm with
the use and control over assets without buying and
owning the same.
• Parties - Lessor (owner of the asset)
- Lessee (user of the asset)
• Assist their clients by providing finance for the
acquisition of the asset taken on lease.
29. 9. Venture Capital
• Maintain - Venture Capital fund to assist the
entrepreneurs who lack capital to be risked.
• Capital funds may be provided for: -
unproven ideas
-start-up funds
30. 10. Specialised Services
• In addition to the basic activities involving
marketing of securities , merchant banks also
provide corporate advisory services on issues like
merges and amalgamation ,takeover etc.
31. Specialised services
provided by:
• Grind lays Bank:
• -advise & assistance in negotiating terms and
conditions of mergers &acquisitions
• advise on valuation of amount of purchase
consideration
• Expediting legal documentation process &
obtaining official approval
• Carry out management audit to identify areas of
strength & weakness of a corporate unit.
32. Canara Bank: Services
related to amalgamation &
merger
• Determining the strength and weakness
• Deciding suitable form of organisation
• Helps in preparing legal documentation
• Helps in obtaining approval from various authorities
• Co-ordinating the activities of professionals involved
in merger & amalgamation
33. 11. Public Deposits
• Merchant bankers also help companies in raising
finance by way of public deposit.
35. • Financial & investment expert – working capital
requirement , financial requirement etc
• Rehabilitator – at the time of merger , acquisition
etc
36. Recent
developments in
merchant banking
1.Setting up of bank subsidiaries
2.Reorganisation of private firms
3.Establishment of sua
4.Securities and exchange board of india
5.Discount and finance housr of india
6.CRISIL
7.SHCIL
37. Merchant banking
in india
1. At present merchant banking services in india are
provided by commercial banks,ICICI,IFCI etc.
2. Merchant banking can be categorised into four
broad sections
3. A.providing long term sources of funds
4. B.project counselling
5. C.Capital structuring
6. D.Portfolio management
38. ROLE OF MERCHANT
BANKERS IN ISSUE
MANAGEMENT
The management of public issue of
securities is core of merchant banking
i. Pre-issue activities
ii. Post-issue activities
iii. Issue marketing
39. PRE-ISSUE ACTIVITIES
1. Documents to be submitted:
MOU
Due diligence certificate
List of promoters
Draft prospectus in computer floppy
Ten copies of draft offer
40. 2. Appointment of Intermediaries:
Intermediaries such as advisor, bankers to
the issue, registrar, underwriters are
appointed in consultation with lead
merchant banker.
3. Underwriting:
Lead merchant banker shall undertake
minimum of 5% or 25lacs whichever is low.
41. 4. Offer documents to be made public:
Draft offer document shall be made public
for a period of 21 days from date of filling
the offer document with the Board.
5. Appointment of compliance officer:
Compliance officer have liaison with Board
with regard to various laws, rules,
regulations and other directions issued by
Board.
42. 6. Mandatory collection centres:
Minimum number of collection centres for
issue of capital shall be
- 4 metropolitan cities
-All centres of stock exchange where
registered office of company is situated.
7. Final offer document:
Furnish a new due diligence certificate, final
prospectus copy, offer document.
43. 8. Application forms:
Application form must be accompanied by
abridged prospectus. Disclaimer clause of
SEBI should be printed in bold. Application
form for new issue is made
9. Minimum application amount:
It shall not be less than 25% of issue price
and total amount payable is not less than
Rs.2000
44. 10. Listing of securities:
11. Period of subscription:
Subscription shall be kept open for atleast
3 working days and not more than 10
working days.
12. Oversubscription:
46. 1. Redressal of investor grievances:
2. Co-ordination with intermediaries:
Maintaining close co-ordination with
registrars to the issue and to depute its
officers to various intermediaries.
3. Stock Invest:
Ensure compliance with instructions issued
by the RBI.
47. 4. Underwriters
a. Issue is closed at earliest date then issue
shall b fully subscribed before closure.
b. No definite figure of subscription, the issue
should be kept open.
c. In devolvement of underwriters,
underwriters shall honour commitment
within 60 days.
d. In undersubscribed issues, lead merchant
banker furnish information who failed to
meet their underwriting de-volvements.
48. 5. Bankers to an issue
Maintain a separate bank (Bankers to an
issue) as per provisions of section73(3) of the
Companies Act 1956
6. Post issue advertisements
All issues and details are released within 10
days from completion of activities.
49. 7. Basis of allotment
In oversubscription allotments are to be
made in the prescribed manner.
8. Compliance with guidelines on
advertisement:
The lead merchant banker shall ensure
compliance with guidelines on
advertisemnet by issuer company.
51. The merchant banker has to undertake the
marketing of issues.
The ultimate aim of issue marketing is to
persuade the investors to subscribe the issue
made by the company.
Merchant banker advises client to go for:
a) fresh issue b) bonus issue
c) additional issue d) right issue
52. MERCHANT
BANKING SCENARIO
In 1996-97 the number of merchant bankers
went down to 65 from 234.
In 1997-98 structural changes have been
brought in merchant banking activities.
Segregation has been brought up in the
activities and merchant bankers have been
prohibited from carrying fund based activity.