Prahladrai Dalmia Lions College of Commerce & Economics: Course: F.Y.B.B.I (Bachelor of Banking & Insurance) Topic

Prahladrai Dalmia Lions College Of
Commerce & Economics
COURSE :
F.Y.B.B.I (Bachelor Of Banking & Insurance)
TOPIC :
Environmental Management Of Financial Services
Presented by:NAME
no
PAVITRA ACHARYA
roll
01
JOHANNA FRANCIS
07
RAHULMEHTA
27
RITIKA PANDEY
32
NIKI SANGOI
44
AAKASH HINGOO
DIMPLE SOLANK
71
62
Merchant banking in India
Introduction
Merchant banking involves financial advice and services.

The person who performs merchant banking services are called as Merchant
Banker.
They act as the intermediaries.
The term Merchant Banking is originated from London.
In India, NATIONAL GRINDLAYS BANK initiated this service in 1969.
CITIBANK followed it in 1970.
SBI is the first Indian commercial bank to set up separate Merchant Banking
Division in 1973.
It was followed by ICICI in 1974.
Features
1) Raising Finance for Clients : Merchant Banking helps its clients to raise finance
through issue of shares, debentures, bank loans, etc. It helps its clients to raise
finance from the domestic and international market. This finance is used for
starting a new business or project or for modernization or expansion of the business.
2) Broker in Stock Exchange: Merchant bankers act as brokers in the stock
exchange.
They buy and sell shares on behalf of their clients. They
conduct research on equity shares. They also advise their9
clients about which shares to buy, when to buy, how much to
buy and when to sell.
3) Advice on Expansion and Modernization: Merchant bankers give advice for
expansion and modernization of
the business units. They give expert advice on mergers and
amalgamations, acquisition and
takeovers, diversification of business, foreign collaborations and joint-ventures,
technology up-gradation, etc.
4) Portfolio Management : A merchant bank manages the portfolios (investments) of
its clients. This makes investments safe, liquid and profitable for the client. It offers
expert guidance to its clients for taking investment decisions.
What is merchant bank ?

A merchant bank is a financial institution that engages in underwriting and business
loans, catering primarily to the needs of large enterprises and high net worth
individuals. In the British market, the term merchant bank refers to an investment
bank .
How it works/Example :
Like investment banks, merchant banks are not depository/retail lender institutions.
Rather, merchant banks are intermediaries that provide brokerage, fund-raising, and
financial advisory services on a large scale to businesses and a smaller scale to
wealthy individuals. For this reason, they often assist in international transactions
involving entities such as multinational corporations.
Why it Matters
Merchant banks play a similar role to that of investment banks, but perform on the
international level.
Consequently, while they assist in raising funds for large companies, they also assist
in transactions across national borders.
Merchant Banker
A merchant banker is any person who is engaged in the business if issue
management either by making arrangements regarding selling/buying or subscribing
to securities acting as management consultant or adviser in rendering corporate
advisory services in relation to issue management. Merchant bankers require
compulsory registration with the SEBI, to carry out their activities. There is a code of
conduct for Merchant bankers. Every merchant banker has to enter into an
agreement with the issuing companies, setting out their mutual rights, liabilities and
obligations relating to issue disclosures and allotment and refunds.
Public Sector MERCHANT BANKERS

SBI Capital Market Ltd.
Punjab National Bank.
Bank of Maharashtra.
IFCI Financial Services Ltd.
PRIVATE SECTOR MERCHANT BANKER

ICICI Securities Ltd.
Axis Bank
Bajaj Capital Ltd.
Reliance Securities Ltd.
Tata Capital Markets Ltd.
Advantages
Merchant banks perform functions that cannot be carried out by businesses on their
own.
Merchant banks have access to traders, financial institutions, and markets that
companies or individuals could not possibly reach.
By using their skills and contacts, merchant banks can get the best possible deals for
their clients.
Disadvantages
Merchant banks are really only for large corporate customers, or extremely wealthy
smaller businesses owned by individual clients.
Not all deals carried out by merchant banks meet with unqualified success.
There is always risk attached to the kinds of deal that merchant banks undertake.
Importance
The very existence of merchant banking shows the need for specialized investment
information. This is merchant bakings main role. While many commercial banks may
be satisfied with standard business plans and market research, the merchant bank is
an active player in the field itself. The seasoned merchant banker knows precisely
where strategic assets are located, and which firms and strategies to avoid. With a
merchant banker, a small business person is hiring an expert partner with a long-term
interest in the field. The real significance here is that using a merchant bank reduces
risks for a new firm.

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Prahladrai Dalmia Lions College Of

Commerce & Economics

Merchant banking in India

Merchant banking involves financial advice and services.

What is merchant bank ?

Public Sector MERCHANT BANKERS

PRIVATE SECTOR MERCHANT BANKER

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