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A Study On Awareness of Merchant Banking
A Study On Awareness of Merchant Banking
INTRODUCTION
1.1 INTRODUCTION
MERCHANT BANKING
The term Merchant Banking has its origin in the trading methods of countries in the
late eighteenth and early nineteenth century when trade-taking place was financed by
bill of exchange drawn by merchanting houses. At that time the merchants were
merely financing their own activities. As international trade grew and other lesser
known names wanted to import goods from abroad, the established merchants ‘lent
their names’ to the newcomers by agreeing to accept bills of exchange on their behalf.
The acceptance houses would charge a commission for this service and thus there
grew up the business of accepting bills of finance trade not merely of themselves, but
of others. Acceptance business thus became and to a degree always has been hallmark
of true Merchant Banks. The second historical of Merchant Banks was the raising of
capital for foreign Government. In many cases, the Merchant Banks have been trading
in the countries concerned and gained the confidence of Governments and other
authorities in those countries. Thus the second principal ingredient of Merchant
Banking became and still is raising of capital through the issue of stocks and bonds.
Therefore, Merchant Banks can be accepting houses or issuing houses or both.
Merchant Banking started in the beginning of 20th century in UK and USA. More
recently, the services offered by Merchant Banks have entered into the other areas of
operations. Their role is wide ranging and they can now provide most of the financial
services required by a company, touching almost all aspects of establishing and
running of industrial units on sound financial footing.
Dictionary meaning of ‘merchant bank’ refers to an organization that underwrites
corporate securities and advises such clients on issues like corporate mergers, etc.
involved in the ownership of commercial ventures. This organization may be a bank,
corporate body, firm or proprietary concern.
1
HISTORY OF MERCHANT BANKING
During the seventeenth and most of the eighteenth century international finance was
centred on Amsterdam. Consequently Amsterdam merchants became the first masters
of the various financial techniques and developments which, in the course of time,
became identified with the emergent profession of ‘Merchant Bankers’.
Commercial Banking and Investment Banking are often confused with Merchant
Banking. In many ways, there may be similarities in their functions. However, in
certain ways, Merchant Banking is distinctly different from commercial Banking and
Investment Banking.
The primary function of a commercial bank is to receive deposits from the public and
lend the same to others. Commercial Banks can undertake some of the merchant
banking activities like Issue Management whereas Merchant Banking Units can not
undertake commercial banking activities. However, the functions of Merchant
Banking may not widely vary from Investment Banking. The Merchant Banker
mainly deals with Issue Management, post issue services, corporate adviser services
etc. the Investment Banker undertaken trading in securities, Investment advisers and
Bought out deals which are not the main activities of Merchant Bankers.
2
issues, capital reconstructions, mergers and acquisitions;
(2) The taking of deposits and currency, money market operations including foreign
exchange dealing;
(3) Medium-term lending and syndication of loans;
(4) Acceptance credits and all forms of export finance;
(5) The holding and dealing in quoted and unquoted investment; and
(6) Fund management on behalf of clients, most typically pension funds, unit trust,
investment trusts and wealthy individuals.
The first authoritative definition for the term ‘Merchant Banker’ has been given in the
Rule 2 (e) of SEBI (Merchant Bankers) Rules, 1922. Accordingly, “A Merchant
Banker means any person who is engaged in the business of Issue Management either
by making arrangements regarding selling, buying or subscribing to Securities as
Manager, Consultant, Adviser of rendering Corporate Advisory Service in relation to
such Issue Management”.
India has entered the 21st century as one of the Asia’s most dynamic economies. This
is the part of the assessment made by International Financial and Capital Market
Institutions based on India’s economic and financial reforms initiated in 1991 and
brought to fruition in various budget.
The progress of any economy mainly depends on the efficient financial system of the
country. Indian economy is no exception financial system of the country. The
importance of the financial sector reforms affirms an effective means for solving the
problems of economic, financial and social in India and elsewhere in the developing
nations of the world. The progress of the Securities Industry of any country depends
mainly on the flow of funds. In fact, capital generation is the lifeblood of the capital
market without which the health and soundness of the financial system cannot be
3
geared and for which well-developed capital market as well as money market is
essential.
India’s capital market is among the largest in the developing world. The market is
comprised of 24 stock exchanges transacting long-term debt; debentures and equity
shares both electronic and physical forms. Derivatives financial instruments are also
be added to the market shortly. The number of firms listed on the Indian Stock
Exchange is more than the USA. Market Capitalization of listed firms is 1980s was
similar to Brazil, Malaysia, Singapore and Denmark.
The capital market of the country, however, underwent dramatic changes since the
beginning of 1980s basically because of a progressive realization that the command
economy on which the emphasis was placed could not lead to higher levels of
economic development and that a slant towards a market-oriented economy is
necessary. It is in the context of fast expanding economy and a liberalized and
deregulated atmosphere that the growth of the Indian Stock Market activities has to be
viewed. No wonder that the markets have registered a quantum jump judge by any
standards.
In India prior to the enactment of Indian Companies Act, 1956,managing agents acted
as issue houses for securities, evaluated project reports, planned capital structure and
to some extent provided venture capital for new firms. Few share broking firms also
functioned as merchant bankers.
The need for specialized merchant banking services was felt in India with the rapid
growth in the number and size of the issues made in the primary market. The
merchant banking services were started by foreign banks, namely the National
Grindlays Bank in 1967 and the City Bank in 1970. The Banking Commission in its
report in 1972 recommended the setting up of merchant banking institutions. This
marked the beginning of specialized merchant banking in India.
To begin with, merchant banking services were offered along with other traditional
banking services. In the mid-Eighties, the Banking Regulation Act was amended
4
permitting commercial banks to offer a wide range of financial services through the
subsidy rule. The State Bank of India was the first India Bank to set up merchant
Banking division in 1972. Later ICICI set up its Merchant Banking division followed
by Bank of India, Bank of Baroda, Canada Bank, Punjab National Bank and UCO
Bank. The merchant banking gained prominence during 1983-84 due to new issue
boom.
Many banks entered merchant banking in the 1960s to take advantage of the
economies of scope produced when private equity investing is added to other bank
services, particularly commercial lending. As lenders to small and medium-sized
companies, banks become knowledgeable about individual firms’ products and
prospects and consequently are natural providers of direct private equity investment to
these firms. As mentioned above, commercial banks were the largest providers of
venture capital in the 1960s. In the middle to late 1980s, the decision to enter
merchant banking was thrust on other banks and bank holding companies by
unforeseen events. In those years, as a result of the LDC (less-developed-country)
debt crisis, many banks received private equity from developing nations in return for
their defaulted loans. At that time, many of these banks set up merchant banking
subsidiaries to try to get some value from this private equity.
Also at about that time, most commercial banks began refocusing their private equity
investments to middle-market and public companies (often low-tech, already
profitable companies) and, rather than providing seed capital, financed expansion or
changes in capital structure and ownership. Most particularly, they took equity
positions in LBOs, takeovers, or recapitalizations or provided subordinated debt in the
form of bridge loans to facilitate the transaction. Often they did both. Commercial
banks financed much of the LBO activity of the 1980s.Then, in the mid-1990s; major
commercial banks began once again focusing on venture capital, where they had
substantial expertise from their previous exposure to this kind of investment. Some of
these recent venture-capital investments have been spectacularly successful. For
example, the Internet search engine Lycos was a 1998 investment of Chase
5
Manhattan’s venture-capital arm. Commercial banks are permitted to report either
realized or unrealized gains on their merchant-banking portfolios, as long as they are
consistent in the reporting. This option makes it difficult for one to compare different
entities’ financial results and could lead to an overly liberal reporting of profits.
NEED AND IMPORTANCE OF MERCHANT BANKING IN INDIA
6
capital appreciation in such investment to motivate them to invest their
savings in securities.
Merchant banker has to think and devise new instruments of financing industrial
projects. He has to assume wider responsibilities of saving industrial units from
going sick and guiding industries to be set up industrially backward areas to
eliminate regional imbalances in industrial development of the country. He has to
guide the wider section of the community possessing surplus money to invest in
corporate securities and other productive investment channels. He has to help the
industry in different forms to ensure that it runs risk free and devoid of
uncertainty by assisting the has to watch the interest and win over the confidence
of the Government, its agencies, along with the entrepreneurs, the investors and
the whole community. He must bridge the communication gap between different
7
sections and resolve the problem being faced in different areas concerned with
the business world.
In the days ahead, merchant bankers have very significant role to play tuning
their activities to the requirements of the growth pattern of corporate sector, the
industry and the economy as a whole, which is, in it, a challenging task and to
meet these challenges merchant bankers will have to be more vigorous and
strategic in playing their role. They will have also to adopt new ways and means
in discharging their role.
8
2.Preference
share/debentures
(a) Upto Rs. 5 lakh 2.50 1.50
(b) Excess of Rs. 5 2.00 1.00
lakh
9
of consultants and share brokers who entered into this fields vigorously to reap
the advantages of the expanding capital markets.
10
• CURRENT SCENARIO
Merchant banking is an area that we need to build and grow in the years to
come. As India forms part of the global village, it becomes increasingly
necessary for us to look at this business in a more holistic manner.
The red hot economy is the obvious starting point. India is likely to end the
year with GDP growth in excess of 7 percent. Companies and private equity
investors are sitting on large piles of cash. In 2006 deal activity was largely
restricted to the IT and Telecom sectors.
Merchant Banking activity was formally initiated into the Indian capital
markets when Grindlays Bank received the license from Reserve Bank in
1967. Grindlays which started with management of capital issues, recognized
the needs of emerging class of entrepreneurs for diverse financial services
ranging from production planning and system design to market research.
Apart from meeting specially, the needs of small-scale units it provided
management constancy services to large and medium sized
companies. Following Grindlays Bank, Citi Bank set-up its Merchant Banking
division in 1970. The division took up the task of assisting new entrepreneur
and existing units in the evaluation of new projects and raising funds through
borrowing and issue of equity. Management consultant services were also
offered. Consequent to the recommendations of Banking Commission in1972,
11
that Indian bank should start Merchant Banking Division in 1972. In the initial
years the SBI’s objective was to render corporate advice and assistance to
small and medium entrepreneurs.
The economic reforms initiated by the Government since July 1991 in the files
of industry, trade and financial sector have paved the way for rapid
development of the economy. Several projects have been conceived since then
and almost all the major groups in the country that have announced their
intentions to set-up mega projects in infrastructure sector envisaging
investment of thousands of crores. With several large projects been set-up and
many more on the drawing board, the demand for a complete range of
Merchant Banking services encompassing project advisory services, issue
management and financial advisory services for corporate sector has increased
considerably. This has led to a sharp growth in the Merchant Banking business
in the last 2 years.
Merchant bankers are individual experts who organize and manage the
merchant banks. The operations of merchant banks are, therefore, influenced
by the personality trait of these individuals. For the success of merchant
bank’s operations, the qualities which merchant bankers should have are
discussed below:-
➢
LEADERSHIP:– merchant banker should possess all relevant skills, update
knowledge to interact with the clients and effectively communicate.
Leadership is synonymous with followers who follow the one who leads.
➢
AGGRESSIVE ACTION:- aggressiveness is a personality trait of a good
leader but in merchant banking it has a wider connotation. Aggressive
merchant bankers are always looking for new business. Once a business
12
opportunity has been located, the merchant banker has got to obtain the
mandate for the merchant banking assignment from the clients at once which
will depend upon his own communication skills, persuasiveness and the
background of the organization to which he belongs. A good merchant banker
is one who does not allow his client to think anything outside except what has
been advised.
➢
CONTACTS :– success of merchant banker depends upon his sociable nature
and the richness of wider contacts. A merchant banker is supposed to be
acquainted deeply with all the constituents of merchant banking. The scope of
contact encompasses intimate contiguity and acquaintances within his own
organization, Central and State Government Offices where compliances under
various relevant enactments are to be reported, Indian and foreign banks,
financial institutions at Central and State levels, promoters/directors/owners
and chief executives of the private and public enterprises which would be
prospective beneficiaries of merchant banking services, printers, advertising
agencies, brokers and stock exchange dealers, advocates and solicitors and
13
members of the press whose services are availed of in executing merchant
banking assignments. Merchant bankers should widen contacts and references
and continue to maintain them with goodness, honour and humour by meeting
people.
➢
ATTITUDE TOWARDS PROBLEM SOLVING:– The most important
personality trait of a merchant banker is his attitude towards problem solving.
Even client coming to him has got to return fully satisfied having consulted a
merchant banker. Positive approach to understand the view points of others,
their difficulties and their adverse circumstances is possible only when a
person is skilled in human relations particularly the inter-personal and intra-
personal behavior. Effective communication and proper feedback are the pre-
requisite for creating a positive attitude towards problem solving
Many persons are effective in this trait without any training for reasons of
cultivating a habit from environment in which they have been brought up at home, in
school, college and office. This is so important that it must be treated as a separate
objective quality of a good merchant banker.
➢
INQUISITINESS FOR ACQUIRING NEW SKILLS, INFORMATION
AND KNOLEDGE: – merchant bankers lice on their wits they earn by giving
information to needy clients. Therefore, they should keep abreast with latest
information in the area of the service product, they market. This is possible if
merchant bankers possess the quality of inquisitiveness.
The above qualities of a merchant banker are only illustrative. All good
qualities in merchant bankers are difficult to be defined so elaborately.
Nevertheless, merchant banker should possess super business acumen,
managerial abilities, administrative capacities and salesmanship so as to
understand the problems and sell the service product to the needy clients.
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REGISTRATION OF MERCHANT BANKER
The term ‘Merchant Banking’ originated in the 18t h and early 19t h centuries
in the United Kingdom when trade between countries was financed by bills
of exchange drawn on the principal merchant houses. With the increase in
international trade, the established merchants started the practice of lending
their names to the new comers and accepting the bills of exchange on their
behalf. They would charge a commission for the purpose and thus acceptance
business became the hallmark of Merchant Bankers. Once these banks had
gained the confidence of the government, they also entrusted with the job of
issuing bonds in the London market.
Although Merchant Banking activity ushered in two decades ago, it was only
in 1992, in India, after the formation of SEBI that is defined and a set of rules
and regulations governing it are in place. In fact, the origin of Merchant
Banking is to be traced to Italy in late medieval times and France during the
seventeenth and eighteenth centuries. Merchant Banker invested accumulated
profits in all kinds of promising activities. Since they added banking business
into the profession of Merchant activities and became a Merchant Banker. A
distinction was existed in banking systems between moneychanger and
exchanger. Moneychangers concentrate on the mutual exchange of different
currencies, operated locally and later accepted deposits for security reasons.
Passage of time money changers evolved into public or deposit banks whereas
exchangers, who operated internationally, engaged in bill-broking that raising
foreign exchange and provision of long-term capital for public borrowers. The
exchanges were remitters and Merchant Bankers. In the seventeenth century,
a Merchant Banker was a dealer in bills of exchange who operated with
correspondents abroad and speculated on the rate of exchange. Initially,
Merchant Bankers were not banks at all and a distinction was drawn between
banks, Merchant Banks and other Financial Institutions. Among all these,
Institutions it was only banks that accepted deposits from public.
15
1.2 HYPOTHESIS
H0: Investors does not Uses Merchant Banking Facility provided by Financial
Institutions
H1: Investors does Uses Merchant Banking Facility provided by Financial Institutions
16
1.3 OBJECTIVES
17
1.4 RESEARCH METHODOLOGY
RESEARCH DESIGN
DATA COLLECTION
Direct personal interview method with structured questionnaire was adopted for
the collection of primary data.
Secondary data was been collected through internet sites.
SOURCES OF DATA
SECONDARY DATA:
18
• Through internet
PRIMARY DATA:
Questionnaires are used to collect primary data from respondents. The questionnaire
was structured type and contains questions relating to customer satisfaction.
19
1.5. SCOPE OF STUDY
• They would help us to draw comparison between public and private sector
companies engaged in Merchant banking activities
• Based upon the comparison, it would help us to determine which sector has
more growth potential & where should one invest his or her fund to maximise
the return at minimum risk
20
1.6 LIMITATION OF STUDY
4) Sample size to be taken may not be the true representative of the population
8) the sample size of only 50 was taken from the limited population for the
purpose of the study, so there can be differences between results of sample
from total population.
10) The customers may not feel the need to answer certain questions as per their
convenience.
21
CHAPTER 2:
REVIEW OF LITERATURE
22
2. REVIEW OF LITERATURE
2.1 Introduction :
Most often associated with academic-oriented literature, such reviews are found
in academic journals, and are not to be confused with book reviews that may also
appear in the same publication. Literature reviews are a basis for research in nearly
every academic field.[1] A narrow-scope literature review may be included as part of
a peer-reviewed journal article presenting new research.
A literature review surveys books, scholarly articles, and any other sources relevant to
a particular issue, area of research, or theory, and by so doing, provides a description,
summary, and critical evaluation of these works in relation to the research problem
being investigated.
2.2 REVIEW
There are no. of study have been done on Merchant Banking. A few of literature are
form of banking where the bank arranges credit financing, but does not hold the loans
in its investment portfolio to maturity. A merchant bank invests its own capital in
leverage buyouts, corporate acquisitions, and other structured finance transactions.
Following are the Review of literature:
23
2) Bruce W. Barren (The EMCO/ Hanover Group)(2006) in their study
merchant banker acted as a capital sources whose primary activity was
involved in the buying, selling and shipping of goods. The role of the
merchant banker, who had the expertise to understand a particular transaction,
was to arrange the necessary capital and ensure that the transaction would
ultimately produce “collectable profits”. Often, the merchant banker also
became in the actual negotiations between a buyer and seller in a transaction.
4) Sankar De & Sushil Khanna (1994) This study examines the economic and
financial implications of some of the regulations introduced by the new
Securities Board of India (SEBI) through the guidelines it has periodically
issued. The regulations apply to investment or merchant banking services
required for corporate issues of long-term securities in India. The authors find
that some implications of the guidelines may be in conflict with the professed
objective of the current economic policy.
24
CHAPTER 3
25
3. PROFILE OF STUDY
The present study was conducted in Andheri (E). Population for the present study
comprised of customers of State Bank of India, Bank of Baroda, ICICI Bank and
various other banks of the area.
3.2 Age :
In today’s scenario everyone wants to invest their money in some or any aspects for
better return or safety in future. I have tried to focus on which age group people focus
on saving or invest where I observe that above 30 years age group choose option of
saving or investment.
3.3 Gender:
3.4 Occupation :
Out of 30 samples collected, everyone is from a different profession. Some were
House-wife, Students, some were working in Corporates, a few were Teachers,
Proprietors, Service etc.
26
CHAPTER 4
ANALYSIS
27
4. DATA ANALYSIS
4.1 INTRODUCTION
This project deals with the description of the sample of 30 interviewer focused on
demographic factors (gender, age, occupation) data analysis and its interpretation. The
thesis is mainly focused on the people or DeMat Account holder that investors choose
which saving options. The project is to focus upon whether investors take an expert
advise to invest in such Investment to minimise the risk and increase the profit margin
in a short period of time. The Questions are Asked in an descriptive manner to a
multiple option type questions for eased responses. The collected data is analysed
using Pie Diagram And Bar Graph.
28
4.2 DATA ANALYSIS
1) AGE
AGE
18-30 YEAR 31-50 YEAR 50 & ABOVE
50 &…
18-30 YEAR
43%
31-50 YEAR
50%
INTERPRETATION- People under age of the 31-50 years believe in savings more
than compare to 18-30years and 50&above years.
29
2) OCCUPATION
OCCUPATION
BUSINESS SERVICE OTHER
17%
50%
33%
30
3) GENDER
GENDER
MALE FEMALE
40%
60%
31
4) WHAT IS YOUR ANNUAL INCOME?
ANNUAL INCOME
1.5 LAKHS - 3 LAKHS 3 LAKHS - 5 LAKHS 5 LAKHS & ABOVE
17%
40%
43%
32
5) DO YOU LIKE TO SAVE YOUR MONEY FOR PASSIVE INCOME ?
YES 86.67% 26
NO 6.67% 2
MAYBE 6.67% 2
TOTAL 100% 30
CHOICES
YES NO MAY BE
7%
6%
87%
INTERPRETATION - As above diagram says that 87% of bread earner likes to save
their money as a passive income for future benefits or for higher returns.
33
6) WHAT PERCENTAGE OF YOUR ANNUAL INCOME DO YOU
SAVED TO INVEST ?
PERCENTAGE
5% - 10% 10% - 20% 20% & ABOVE0
13%
47%
40%
34
7) WHAT ARE THE FACTORS TO WHICH YOU GIVE PRIORITY
WHEN YOU INVEST ?
Chart Title
14 13
12
10
10
6 5
2
2
0
COUNT
35
8) IF YES; THEN WHERE WOULD YOU LIKE TO INVEST FOR
BETTER RETURN ?
18
16
16
14
12
10
6 5
4
4
2 2
2
0
CHOICES
INTERPRETATION – As we can see that people select fixed deposit for the
purpose of safety rather than higher return.
36
9) DO YOU TAKE ANY ADVICE OR CONSULTANCY WHILE
INVESTING IN SECURITIES OR MUTUAL FUND ? (ANSWER
ONLY IF YOU CHOOSE SECURITIES AND MUTUAL FUND)
MAY BE NO YES
CHOICES 8
17
0 5 10 15 20
37
10) DO YOU TRUST UPON KNOWLEDGE OF CONSULTANT IN
FINANCE MARKET ?
MAY BE NO YES
CHOICE 3
18
0 5 10 15 20
INTERPRETATION – As above graph says that 60% of the sample size trust
upon knowledge of consultant and only 10% of sample size don’t trust on
knowledge of consultant.
38
11) ARE YOU AWARE ABOUT MERCHANT BANKING, A TYPE OF
FINANCIAL SERVICE WHO ADVISORY SERVICE FOR
INVESTMENT ?
AWARE OR NOT
YES NO
12%
88%
39
12) ARE YOU SATISFIED WITH THE SERVICES PROVIDED BY
YOUR BANK ?
SATISFACTION
30
24
25
20
15
10
6
5
0
SATISFACTION
YES NO
INTERPRETATION – As the study says that 80% of the investors are satisfies by the
services provided by the merchant banker.
40
13) NON-FINANCIAL INSTITUTION DEPENDS ON MERCHANT
BANKING ?
YES 46.67% 14
NO 20% 6
TOTAL 100% 30
16
14
14
12
10
10
8
6
6
4
2
0
CHOICES
YES NO DON’T KN OW
41
14) SUGGESTION TO AWARE PEOPLE ABOUT THE MERCHANT
BANKING ?
ANS- 90% of the respondent answer this questions by saying that financial institution
should show more and more advertisement about the services of merchant banking to
make general public aware about the Merchant banking.
42
CHAPTER 5
43
CHAPTER 5
5.1 FINDINGS
Findings means purpose of research done for. Merchant banking helps me to find the
corporate profile of the investor. The findings of the research are as follow:
➢ In most of the cases, the issuer 225 companies appointed their own subsidiary
company/sister concern to advice on their equity issue
➢ Companies making large size issues of equity shares relied more on foreign
merchant banker than on Indian merchant banker because of their vast
international network.
➢ Respondents are interesting in saving their annual income for the passive
income which they will use it in the future in their retirement for the
independence on the others.
➢ Respondents founds that fixed deposits type of savings is better than mutual
fund because mutual fund is more risky as compare to fixed deposit
➢ Respondents wants to invest in the fixed deposits because it is more safer than
mutual fund
➢ Respondents observe that fixed consume time than mutual fund for the better
return
44
5.2 CONCLUSION
Conclusion is the chance to have the last word on the subject. The conclusion
allows you to have the final say on the issues you have raised in your paper, to
synthesize your thoughts, to demonstrate the importance of your ideas, and to
propel your reader to new view of the subject. It is also your opportunity to
make a good final impression and to end on a positive note.
After testing the hypothesis I found that people like to invest in fixed
deposits than in mutual fund or shares and securities as it more safer than it.
The investors who are investing in the mutual fund or shares and securities
takes the advice from the Merchant Banker.
They trust the merchant banker’s knowledge in the financial market.
The person who are investing in the fixed deposits or any other saving options
for safe return and less risk does not have any idea about the facility provided
by the merchant banker.
The investors who use the merchant banking facility are satisfied by
the services provided by the merchant banker. And only limited people are not
satisfied by the services provided by the merchant banker.
As looking forward for the growing demand of merchant banking it a
roadmap the unemployed population for put their step in it. As merchant
banker can becomes a career option for the students.
45
CHAPTER 6
SUGGESTIONS
INDEX
46
CHAPTER 6
SUGGESTION
1. Merchant banker should provide services like merger and acquisitions advise.
5. They should also provide technical, financial & managerial services & help
the company to set up a track record
6. The assistance should be provided for the equity support through loan support
to supplement this may be extended
47
CHAPTER 7
INDEX
48
CHAPTER 7
SCOPE OF FURTHER STUDY
7.1 INTRODUCTION
7.2 SCOPE
49
though capital market, ate capital market and dreamt capital market. It needed
an extraordinary effort and skill the drive the small investor away! High
premiums, false premiums and gray market operations. The professed
protector of his interests first laid down the dictum of proportionate allotment,
then of minimum subscription, all working against his interests. This would
make an observant student of the stock market infer that there is some game
plan afoot to dethrone the small investor from his prominent; he was believed
to be the king. With the coming to SEBI, an organisation that was ostensibly
brought into existence to guard the interest of the small investor, hopes ran
high that the small investor would now have a safe playing field. But these
hopes were soon belied. Far from guarding the interests of the investing
public, SEBI embarked on a course of action, which has positively hurt them.
The latest fiat of EBI bans corporate advertising after the receipt of
acknowledgement card by a company wanting to go public. SEBI’s this action
has caused the closure of an information window. Now 50 million potential
investors are deprived of official and authentic information given by the
Issuer. It is hard to understand reasons for this drastic and totally uncalled for
action. While there has been no official explanation for this fiat, there is
reason to believe that it may be based on a wrong perception of the role for
corporate advertising.
All this has been done perhaps because the corporate and intermediaries is to
follow the practices of Western capital markets here, oblivious of the fact that
our capital markets are altogether different in structure, in systems and in the
number of participants Freedom of commercial expression could be exploited
by some to serve their own ends, just a s freedom of speech and expression
could be abused but this has not led our Government to put arbitrary
restrictions on our freedom.
50
BIBLIOBRAGAPHY
BOOKS
1. Merchant Banking and Financial Services – Madhu Vij & Swati Dhawan
2. Merchant Banker – H.R. SUNEJA
3. Merchant Banking Principles & Practices- H.R.MACHIRAJU
WEBSITES
www.google.co.in
www.jmmorgansranley.com
www.economictimes.com
https://s3.amazonaws.com/ppt-download/merchantbankproject-150109041034-
conversion-gate02.pdf?response-content-
disposition=attachment&Signature=UqldsmmHzlPgg8fV28pOc0LTvkI%3D&Expire
s=1553596694&AWSAccessKeyId=AKIAIA5TS2BVP74IAVEQ
51
ANNEXURE
1) Age
• 18-30year
• 31 – 50 year
• 50& above year
2) Occupation
• Business
• Service
• Others
3) Gender
• Male
• Female
• Yes
• No
• Maybe
• 5%- 10%
• 10% - 20%
• 20% & above
52
7) What are the factors to which you give priority when you invest ?
• Safety
• High return
• Liquidity
• Less risk
8) If yes; then where would you like to invest for better return ?
• Fixed deposit
• Share and securities
• Mutual fund
• Insurance
• Others
9) Do you take any advice or consultancy while investing in securities or mutual fund
• Yes
• No
• Maybe
• yes
• no
• maybe
11) Are you Aware about Merchant Banking, a type of Financial services who
advisory services for investment ?
• yes
• no
12) Are you satisfied with the services provided by your bank ?
• yes
• no
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13) Non-financial institution depends on Merchant banking ?
• yes
• no
• Don’t Know
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