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Merchant Banking

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Page 1: Merchant Banking
Page 2: Merchant Banking
Page 3: Merchant Banking

Merchant banks are : . private financial institution

primary sources of income is : . international trade

secondary sources of income are : , Consulting Mergers & Acquisitions

help and .financial market speculation

they take far greater risks .than traditional banks

They do not take money from the public,

They are international , in scope So …

[ [ Anyone considering dealing with any merchant bank should investigate the Anyone considering dealing with any merchant bank should investigate the

.bank and its managers before seeking their help .bank and its managers before seeking their help ] ]

FACTS ABOUT Merchant banks..

Page 4: Merchant Banking

Merchant banks in India . . .

Started in 1967 by Grindlays Bank. after that other foreign banks like Citibank and

Chartered Bank started these services in India . In mid 1970 there was a boom in the capital market

with the introduction of Foreign exchange regulation Act (FERA 1973 ) which created an awareness in the investing public about the capital market .

Also encouraged a few commercial banks and financial institution to set up a merchant banking division .

Page 5: Merchant Banking

FOREIGN FOREIGN BANKSBANKS

INDIAN INDIAN BANKSBANKS

MERCHANT BANKING DIVISIONSMERCHANT BANKING DIVISIONS

FINANCIAL FINANCIAL INSTITUTIONSINSTITUTIONS

PRIVATE PRIVATE MERCHANT MERCHANT

BANKERSBANKERS

Page 6: Merchant Banking

FOREIGN BANKS:

GRINDLAYS BANK, CITIBANK , CHARTERED BANK AND HONK KONG BANK.

INDIAN BANK :

STATE BANK OF INDIA FIRST, THEN BANK OF INDIA, CENTRAL BANK OF INDIA ,

BANK OF BARODA , PUNJAB NATIONAL BANK , UCO BANK ,CANARA BANK .

PRIVATE MERCHANT BANKERS :

J.M.FINANCIAL CONSULTANTS, CHAMPAKLAL INVESTMENTS AND FINANCIAL

CONSULTANCY,V.B. DESAI CONSULTANTS ETC.

FINANCIAL INSTITUTION:

ICICI, IRCI WHOSE MAIN CONCENTRATION AND ATTENTION IS ON

MERGERS, AMALGAMATION AND TAKEOVERS.

Page 7: Merchant Banking

Services of Merchant Banks

o CORPORATE COUNSELLING

o PROJECT COUNSELLING

o LOAN SYNDICATION

o ISSUE MANAGEMENT

o UNDERWRITING OF PUBLIC ISSUE

o PORTFOLIO MANAGEMENT

o ADVISORY SERVICE RELATING TO MERGERS AND

TAKEOVERS

o OFF SHORE FINANCE

o NON-RESIDENT INVESTMENT

Page 8: Merchant Banking

OBJECTIVES OF A MERCHANT BANKSOBJECTIVES OF A MERCHANT BANKS

Project formation

Diversification

Modernization

Raising Working Capital

Guidance

Implementation

Mobilizing resources

OOBBJJEECCTTIIVVEESS

Page 9: Merchant Banking

FUNCTIONS OFFUNCTIONS OF MERCHANT BANKING MERCHANT BANKING

PROJECT PROJECT COUNSELLING COUNSELLING

CREDIT CREDIT SYNDICATION SYNDICATION

MANAGEMENT &MANAGEMENT &PUBLIC ISSUES PUBLIC ISSUES

CONSULTANCY TO CONSULTANCY TO SICK UNITSSICK UNITS

RESOURCE RESOURCE MOBILIZATIONMOBILIZATION

PORTFOLIO PORTFOLIO MANAGEMENT MANAGEMENT

Page 10: Merchant Banking

GUIDELINES

IT IS A STATUTORILY BROGHT WITHIN THE FRAMEWORK OF SEBI.

1.ALL MERCHANT BANKERS WILL REQUIRE AUTHORISATION BY SEBI TO CARRY OUT BUSINESS.

2. SEBI CLASSIFY MERCHANT BANKERS IN 4 CATEGORY CATEGORY 1 CATEGORY-2 CATEGORY-3 CATEGORY-4

Page 11: Merchant Banking

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