MERCHANT

BANKING
WHAT IS MERCHANT BANKING?

• Any institution that renders the following activities:

1. Dealing in shares
2. Portfolio management
3. Project counselling
4. Insurance services
MERCHANT BANKER

• Critical link between a company raising funds and the investor

• Underwrites corporate securities
• Can be in the form of a bank, a company or an individual
 COMMERCIAL BANKS MERCHANT BANKS
• Catering to the needs of common man
• Anyone can open an account
• Dealing in secondary markets
• Asset oriented
• Plays the role of financers
• Regulated by baking regulation act, 1949
• Catering to the needs of corporate firms
• Not everyone can open an account
• Dealing in primary markets
• Management oriented
• Plays different roles – underwriting and
portfolio etc
• Rules and regulations designed by SEBI
ADVANTAGES DISADVANTAGES

• Performs activities that cannot be performed • Only for large companies with plenty of
by a business alone financial turnover
• Access to parties that a business cannot reach • High risk and deals may not always be
alone successful
SERVICES PROVIDED

• Corporate counselling
• Project counselling
• Working capital finance
• Portfolio management
• Restructuring strategies
• Credit syndication
• Lease financing
• Some other services