SlideShare a Scribd company logo
APPA
Institute Of Engineering And
Technology
Dept : MBA
: Regulations Of Merchant banking
Presentation on:
Submitted By:
Mahesh.patil
Submitted To:
prof. Shashikant.k
Introduction :
“ A merchant bank is a financial institution providing
capital to companies in the form of share ownership
instead of loans. A merchant bank also provides
advisory on corporate matters to the firms which they
invest.
Regulations Of Merchant banking :
A merchant banker will require authorization by SEBI to
carry out the business.
SEBI has classified the merchant bankers into four
categories based on the nature and range of the
activities and responsibilities.
Category 1 :
It consists of merchant bankers who
carry on the business of issue management which
consists of preparation of issue management which
consists of preparations of prospectus, determining
the financial structure , tie-up of the financiers.
Minimum networth required is Rs. 1 crore.
Category : 2
It consists of those authorized to act in the capacity of
co-manager.
The Minimum networth required is Rs. 50 Lakhs
Category : 3
it
consists of those authorized to act as underwriter, advisor or consultant
to an issue.
The Minimum networth required is Rs. 20 Lakhs.
Category : 4
it consists of Merchant banker who act as
advisor or consultant to an issue.
There is no Minimum networth required.
SEBI GUIDELINES FOR MERCHANT
BANKERS
SEBI’s authorization is a must to act as merchant
bankers, includes:
 Professional qualification in finance, law or business management
 Infrastructure like office space, equipment and man power
 Capital adequacy
 Past track of record, experience, general reputation and fairness in all
transactions
 Every merchant banker should maintain copies of balance sheet, Profit
and loss account, statement of financial position
Cont….
 Half-yearly audited result should be submitted to
SEBI
 Merchant bankers are prohibited from buying
securities based on the unpublished price sensitive
information of their clients
 SEBI has been vested with the power to suspend or
cancel the authorization in case of violation of the
guidelines
 SEBI has the right to send inspecting authority to inspect
books of accounts, records etc… of merchant bankers
Conclusion :
merchant banking is difficult to define. The function
of merchant bankers varies from country to country. Merchant
banks are known as “Accepting and issuing houses” in UK and as
“investment banks” in USA
In India merchant bankers are allowed to undertake
only those activities which are related to securities market
including issue management activities and are prohibited
from carrying on fund based activities other than those
related exclusively to the capital market. This reduces the
scope of merchant banking in India.
Thank you

More Related Content

What's hot

Sebi
SebiSebi
Sebi guidelines
Sebi guidelinesSebi guidelines
Sebi guidelines
Shalini Tripathi
 
New Issue Market
New Issue MarketNew Issue Market
New Issue Market
Cma Agarwal
 
Indian capital market
Indian capital marketIndian capital market
Indian capital market
Jothi Ram
 
PRIMARY MARKET PPT
PRIMARY MARKET PPTPRIMARY MARKET PPT
PRIMARY MARKET PPT
Kishan Panchal
 
Role and functions of sebi
Role and functions of sebiRole and functions of sebi
Role and functions of sebi
Ankur Yadav
 
Financial Systems and Markets; Concept, Nature and Scope of Financial Service...
Financial Systems and Markets; Concept, Nature and Scope of Financial Service...Financial Systems and Markets; Concept, Nature and Scope of Financial Service...
Financial Systems and Markets; Concept, Nature and Scope of Financial Service...
Ashish Hande
 
Government securities
Government securitiesGovernment securities
Government securities
Shubham Agrawal
 
Securitization
Securitization Securitization
Securitization
Rohit Kumar
 
Debt securitisation
Debt securitisationDebt securitisation
Debt securitisation
Bibin Pv
 
New issue market
New issue marketNew issue market
New issue market
Ankit Porwal
 
Factoring
FactoringFactoring
Factoring
kushal walia
 
IFCI
IFCIIFCI
IFCI
naveen99
 
Primary market
Primary marketPrimary market
Primary market
Chhitiz Shrestha
 
Portfolio selection, markowitz model
Portfolio selection, markowitz modelPortfolio selection, markowitz model
Portfolio selection, markowitz model
aarthi ramakrishnan
 
Factoring
FactoringFactoring
Sebi guidelines for merchant bankers
Sebi guidelines for merchant bankersSebi guidelines for merchant bankers
Sebi guidelines for merchant bankers
SHAMEEM ET
 
UNIT TRUST OF INDIA
UNIT TRUST OF INDIAUNIT TRUST OF INDIA
UNIT TRUST OF INDIA
Amith Kumar
 
Underwriting
Underwriting Underwriting
Underwriting
ashvi1011
 

What's hot (20)

Sebi
SebiSebi
Sebi
 
Sebi guidelines
Sebi guidelinesSebi guidelines
Sebi guidelines
 
New Issue Market
New Issue MarketNew Issue Market
New Issue Market
 
Indian capital market
Indian capital marketIndian capital market
Indian capital market
 
PRIMARY MARKET PPT
PRIMARY MARKET PPTPRIMARY MARKET PPT
PRIMARY MARKET PPT
 
Role and functions of sebi
Role and functions of sebiRole and functions of sebi
Role and functions of sebi
 
Financial Systems and Markets; Concept, Nature and Scope of Financial Service...
Financial Systems and Markets; Concept, Nature and Scope of Financial Service...Financial Systems and Markets; Concept, Nature and Scope of Financial Service...
Financial Systems and Markets; Concept, Nature and Scope of Financial Service...
 
Government securities
Government securitiesGovernment securities
Government securities
 
New issue Market
New issue MarketNew issue Market
New issue Market
 
Securitization
Securitization Securitization
Securitization
 
Debt securitisation
Debt securitisationDebt securitisation
Debt securitisation
 
New issue market
New issue marketNew issue market
New issue market
 
Factoring
FactoringFactoring
Factoring
 
IFCI
IFCIIFCI
IFCI
 
Primary market
Primary marketPrimary market
Primary market
 
Portfolio selection, markowitz model
Portfolio selection, markowitz modelPortfolio selection, markowitz model
Portfolio selection, markowitz model
 
Factoring
FactoringFactoring
Factoring
 
Sebi guidelines for merchant bankers
Sebi guidelines for merchant bankersSebi guidelines for merchant bankers
Sebi guidelines for merchant bankers
 
UNIT TRUST OF INDIA
UNIT TRUST OF INDIAUNIT TRUST OF INDIA
UNIT TRUST OF INDIA
 
Underwriting
Underwriting Underwriting
Underwriting
 

Similar to Regulation of Merchant banking

Merchant banking
Merchant bankingMerchant banking
Merchant banking
bhanu vashishtha
 
Merchant Banking [2020]
Merchant Banking [2020]Merchant Banking [2020]
Merchant Banking [2020]
RazakKuruvambalam
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
Vivek Prajapati
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
Ujjwal 'Shanu'
 
Merchant Banking
Merchant BankingMerchant Banking
Merchant Banking
priyaposy
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
pavanfalak
 
1447.ppt
1447.ppt1447.ppt
1447.ppt
RAJI585568
 
Merchant Banking in India give opportunity to invest
Merchant Banking in India give opportunity to investMerchant Banking in India give opportunity to invest
Merchant Banking in India give opportunity to invest
DrBabarAliKhan
 
1447.ppt
1447.ppt1447.ppt
1447.ppt
SachinKhare21
 
Ppt merchant bank
Ppt merchant bankPpt merchant bank
Ppt merchant bank
AHURMAZDA
 
Portfolio manager and merchant banker
Portfolio manager and merchant bankerPortfolio manager and merchant banker
Portfolio manager and merchant banker
Tushar Sachdeva
 
Merchant banking guidelines
Merchant banking guidelinesMerchant banking guidelines
Merchant banking guidelines
Taher Ahmed
 
17159027 Merchant Banking Basics By Saylee
17159027 Merchant Banking Basics By Saylee17159027 Merchant Banking Basics By Saylee
17159027 Merchant Banking Basics By Saylee
gimmba
 
Presentation (VAIBA)
Presentation (VAIBA)Presentation (VAIBA)
Presentation (VAIBA)
Rafiqul Islam
 
Presentation (VAIBA)
Presentation (VAIBA)Presentation (VAIBA)
Presentation (VAIBA)
Rafiqul Islam
 
Merchant bankers
Merchant bankersMerchant bankers
Merchant banking
Merchant bankingMerchant banking
Merchant banking
Dr. Jamal uddeen
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
Dr. Jamal uddeen
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
BHARATH C
 
Accounts
AccountsAccounts
Accounts
GurjotKaur33
 

Similar to Regulation of Merchant banking (20)

Merchant banking
Merchant bankingMerchant banking
Merchant banking
 
Merchant Banking [2020]
Merchant Banking [2020]Merchant Banking [2020]
Merchant Banking [2020]
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
 
Merchant Banking
Merchant BankingMerchant Banking
Merchant Banking
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
 
1447.ppt
1447.ppt1447.ppt
1447.ppt
 
Merchant Banking in India give opportunity to invest
Merchant Banking in India give opportunity to investMerchant Banking in India give opportunity to invest
Merchant Banking in India give opportunity to invest
 
1447.ppt
1447.ppt1447.ppt
1447.ppt
 
Ppt merchant bank
Ppt merchant bankPpt merchant bank
Ppt merchant bank
 
Portfolio manager and merchant banker
Portfolio manager and merchant bankerPortfolio manager and merchant banker
Portfolio manager and merchant banker
 
Merchant banking guidelines
Merchant banking guidelinesMerchant banking guidelines
Merchant banking guidelines
 
17159027 Merchant Banking Basics By Saylee
17159027 Merchant Banking Basics By Saylee17159027 Merchant Banking Basics By Saylee
17159027 Merchant Banking Basics By Saylee
 
Presentation (VAIBA)
Presentation (VAIBA)Presentation (VAIBA)
Presentation (VAIBA)
 
Presentation (VAIBA)
Presentation (VAIBA)Presentation (VAIBA)
Presentation (VAIBA)
 
Merchant bankers
Merchant bankersMerchant bankers
Merchant bankers
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
 
Merchant banking
Merchant bankingMerchant banking
Merchant banking
 
Accounts
AccountsAccounts
Accounts
 

More from mahesh patil

state bank of india home loan
state bank of india home loanstate bank of india home loan
state bank of india home loan
mahesh patil
 
Types of cost
Types of costTypes of cost
Types of cost
mahesh patil
 
MARKET BASED AND COMPETITOR BASEDB PRICING
MARKET BASED AND COMPETITOR BASEDB PRICINGMARKET BASED AND COMPETITOR BASEDB PRICING
MARKET BASED AND COMPETITOR BASEDB PRICING
mahesh patil
 
Presentation skills
Presentation skillsPresentation skills
Presentation skills
mahesh patil
 
Ksrtc profile and services
Ksrtc profile and services Ksrtc profile and services
Ksrtc profile and services
mahesh patil
 
Channel design
Channel designChannel design
Channel design
mahesh patil
 
Home banking final
Home banking finalHome banking final
Home banking final
mahesh patil
 

More from mahesh patil (7)

state bank of india home loan
state bank of india home loanstate bank of india home loan
state bank of india home loan
 
Types of cost
Types of costTypes of cost
Types of cost
 
MARKET BASED AND COMPETITOR BASEDB PRICING
MARKET BASED AND COMPETITOR BASEDB PRICINGMARKET BASED AND COMPETITOR BASEDB PRICING
MARKET BASED AND COMPETITOR BASEDB PRICING
 
Presentation skills
Presentation skillsPresentation skills
Presentation skills
 
Ksrtc profile and services
Ksrtc profile and services Ksrtc profile and services
Ksrtc profile and services
 
Channel design
Channel designChannel design
Channel design
 
Home banking final
Home banking finalHome banking final
Home banking final
 

Recently uploaded

How to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete GuideHow to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete Guide
Daniel
 
Seeman_Fiintouch_LLP_Newsletter_Jun_2024.pdf
Seeman_Fiintouch_LLP_Newsletter_Jun_2024.pdfSeeman_Fiintouch_LLP_Newsletter_Jun_2024.pdf
Seeman_Fiintouch_LLP_Newsletter_Jun_2024.pdf
Ashis Kumar Dey
 
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
vpqasyb
 
真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样
真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样
真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样
28xo7hf
 
Enhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impactEnhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impact
Alexander Belyaev
 
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDADCONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
godiperoficial
 
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
234knry
 
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptxBudgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Godwin Emmanuel Oyedokun MBA MSc PhD FCA FCTI FCNA CFE FFAR
 
What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?
Newman Leech
 
Singapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdfSingapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdf
International Federation of Accountants
 
The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...
Yashwanth Rm
 
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and NordhausChapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
iraangeles4
 
TechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdfTechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdf
richardwellington119
 
Dr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment LeaderDr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment Leader
msthrill
 
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdfMacroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
olaola5673
 
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
Neil Day
 
13 Jun 24 ILC Retirement Income Summit - slides.pptx
13 Jun 24 ILC Retirement Income Summit - slides.pptx13 Jun 24 ILC Retirement Income Summit - slides.pptx
13 Jun 24 ILC Retirement Income Summit - slides.pptx
ILC- UK
 
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
28xo7hf
 
Singapore Event 2024 State of Play Slides
Singapore Event 2024 State of Play SlidesSingapore Event 2024 State of Play Slides
Singapore Event 2024 State of Play Slides
International Federation of Accountants
 
Fabular Frames and the Four Ratio Problem
Fabular Frames and the Four Ratio ProblemFabular Frames and the Four Ratio Problem
Fabular Frames and the Four Ratio Problem
Majid Iqbal
 

Recently uploaded (20)

How to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete GuideHow to Invest in Cryptocurrency for Beginners: A Complete Guide
How to Invest in Cryptocurrency for Beginners: A Complete Guide
 
Seeman_Fiintouch_LLP_Newsletter_Jun_2024.pdf
Seeman_Fiintouch_LLP_Newsletter_Jun_2024.pdfSeeman_Fiintouch_LLP_Newsletter_Jun_2024.pdf
Seeman_Fiintouch_LLP_Newsletter_Jun_2024.pdf
 
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
一比一原版宾夕法尼亚大学毕业证(UPenn毕业证书)学历如何办理
 
真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样
真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样
真实可查(nwu毕业证书)美国西北大学毕业证学位证书范本原版一模一样
 
Enhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impactEnhanced metrics to measure the Regulatory impact
Enhanced metrics to measure the Regulatory impact
 
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDADCONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
CONTABILIDAD FINANCIERA / ENSAYO DE CONTABILIDAD
 
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
高仿英国伦敦艺术大学毕业证(ual毕业证书)文凭证书原版一模一样
 
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptxBudgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
Budgeting as a Control Tool in Govt Accounting in Nigeria Prof Oyedokun.pptx
 
What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?What Lessons Can New Investors Learn from Newman Leech’s Success?
What Lessons Can New Investors Learn from Newman Leech’s Success?
 
Singapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdfSingapore 2024 Sustainability Slides.pdf
Singapore 2024 Sustainability Slides.pdf
 
The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...The various stages, after the initial invitation has been made to the public ...
The various stages, after the initial invitation has been made to the public ...
 
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and NordhausChapter 25: Economic Growth Summary from Samuelson and Nordhaus
Chapter 25: Economic Growth Summary from Samuelson and Nordhaus
 
TechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdfTechnoXander Confirmation of Payee Product Pack 1.pdf
TechnoXander Confirmation of Payee Product Pack 1.pdf
 
Dr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment LeaderDr. Alyce Su Cover Story - China's Investment Leader
Dr. Alyce Su Cover Story - China's Investment Leader
 
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdfMacroeconomic-digest-of-Ukraine-0624-Eng.pdf
Macroeconomic-digest-of-Ukraine-0624-Eng.pdf
 
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
BIHC Briefing June 2024 from Bank+Insurance Hybrid Capital in association wit...
 
13 Jun 24 ILC Retirement Income Summit - slides.pptx
13 Jun 24 ILC Retirement Income Summit - slides.pptx13 Jun 24 ILC Retirement Income Summit - slides.pptx
13 Jun 24 ILC Retirement Income Summit - slides.pptx
 
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
1比1复刻(ksu毕业证书)美国堪萨斯州立大学毕业证本科文凭证书原版一模一样
 
Singapore Event 2024 State of Play Slides
Singapore Event 2024 State of Play SlidesSingapore Event 2024 State of Play Slides
Singapore Event 2024 State of Play Slides
 
Fabular Frames and the Four Ratio Problem
Fabular Frames and the Four Ratio ProblemFabular Frames and the Four Ratio Problem
Fabular Frames and the Four Ratio Problem
 

Regulation of Merchant banking

  • 1. APPA Institute Of Engineering And Technology Dept : MBA : Regulations Of Merchant banking Presentation on: Submitted By: Mahesh.patil Submitted To: prof. Shashikant.k
  • 2. Introduction : “ A merchant bank is a financial institution providing capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters to the firms which they invest.
  • 3. Regulations Of Merchant banking : A merchant banker will require authorization by SEBI to carry out the business. SEBI has classified the merchant bankers into four categories based on the nature and range of the activities and responsibilities.
  • 4. Category 1 : It consists of merchant bankers who carry on the business of issue management which consists of preparation of issue management which consists of preparations of prospectus, determining the financial structure , tie-up of the financiers. Minimum networth required is Rs. 1 crore.
  • 5. Category : 2 It consists of those authorized to act in the capacity of co-manager. The Minimum networth required is Rs. 50 Lakhs Category : 3 it consists of those authorized to act as underwriter, advisor or consultant to an issue. The Minimum networth required is Rs. 20 Lakhs.
  • 6. Category : 4 it consists of Merchant banker who act as advisor or consultant to an issue. There is no Minimum networth required.
  • 7. SEBI GUIDELINES FOR MERCHANT BANKERS SEBI’s authorization is a must to act as merchant bankers, includes:  Professional qualification in finance, law or business management  Infrastructure like office space, equipment and man power  Capital adequacy  Past track of record, experience, general reputation and fairness in all transactions  Every merchant banker should maintain copies of balance sheet, Profit and loss account, statement of financial position
  • 8. Cont….  Half-yearly audited result should be submitted to SEBI  Merchant bankers are prohibited from buying securities based on the unpublished price sensitive information of their clients  SEBI has been vested with the power to suspend or cancel the authorization in case of violation of the guidelines  SEBI has the right to send inspecting authority to inspect books of accounts, records etc… of merchant bankers
  • 9. Conclusion : merchant banking is difficult to define. The function of merchant bankers varies from country to country. Merchant banks are known as “Accepting and issuing houses” in UK and as “investment banks” in USA In India merchant bankers are allowed to undertake only those activities which are related to securities market including issue management activities and are prohibited from carrying on fund based activities other than those related exclusively to the capital market. This reduces the scope of merchant banking in India.