A merchant bank provides capital to companies through equity ownership rather than loans. They also provide advisory services on corporate matters. In the UK, merchant bank refers to an investment bank. According to the FDIC, merchant banking involves negotiated private equity investments by financial institutions in unregistered securities of private or public companies. Merchant banking activities include management of public issues like IPOs, payment of dividends, underwriting, and acting as a monitoring agency.

1. MERCHANT
BANKING

2. A MERCHANT BANK IS A FINANCIAL
INSTITUTION WHICH PROVIDE CAPITAL
TO COMPANIES IN THE FORM OF
SHARE OWNERSHIP INSTEAD OF
LOANS. A MERCHANT BANK ALSO
PROVIDE ADVISORY ON CORPORATE
MATTERS TO THE FIRMS THEY LEND
TO. IN THE UNITED KINGDOM ,THE
TERM “MERCHANT BANK” REFERS TO
AN INVESTMENT BANKS

3. ACCORDING TO THE U.S. FEDERAL
DEPOSIT INSURANCE CORPORATION
(FDIC), “THE TERM MERCHANT
BANKING IS GENERALLY UNDERSTOOD
TO MEAN NEGOTIATED PRIVATE
EQUITY INVESTMENT BY FINANCIAL
INSTITUTIONS IN THE UNREGISTERD
SECURITIES OF EITHER PRIVATELY OR
PUBLICALLY HELD COMPANIES.

4. MERCHANT BANKING
ACTIVITIES
ISSUE MANAGEMENT – MANAGEMENT OF
PUBLIC ISSUE i.e. IPOs , FPOs , RIGHT ISSUE
etc.
BANKERS TO THE ISSUE
PAYMENT OF DIVIVEND
DEBENTURES TRUSTEE
UNDERWRITING
MONITERING AGENCY

5. THANK YOU