Role of Merchant Bankers in Issue Management

& Challenges of Merchant Banking in India

DIBESH PADIA
Introduction
ISSUE MANAGEMENT

 Issue management is the management process whose goal is to preserve markets,

reduce risks, create opportunities and manage corporate reputation as an
organizational asset for the benefit of both the organization and its primary
stakeholders.

 Two main activities in issue management:

(1)Pre issue activities
(2)Post issue activities
 Mechanism for New Issues

New issues can be made in any one of the following ways:

 Public issue through prospectus
 Through offer for sale/bought-out deals
 Private placement and stock exchange placing
 Rights issue
 Book-building
 Employee Stock option
 Role of Merchant Bankers In Issue
Management

The management of public issue of securities is core of

merchant banking

I. Pre-issue activities.
II. Post-issue activities.
Pre-Issue Activities
 Pre-Issue Activities
1. Documents to be submitted
2. Appointment of intermediaries
3. Underwriting
4. Offer documents to be made public
5. Appointment of compliance officer
6. Mandatory collection centres
7. Final offer document
8. Application forms
9. Minimum application amount
10. Period of Subscription
Post-Issue Activities
 Post-Issue Activities
1. Co-ordination with intermediaries
2. Redressal of investor grievances
3. Underwriters
4. Bankers to an issue
5. Post issue Advertisements
6. Basis of allotment
7. Compliance with guidelines on advertisement
Challenges of Merchant
Banking in India
Challenges of Merchant Banking in India
 Restricts their scope of activities.
 Creates trouble for bankers.
 Need to develop adequate expertise.
 High capital adequacy norms by SEBI.
 Non-cooperation of issuing company.
 High minimum authorization amount by SEBI.
 Restriction of merchant banking activities.
CONCLUSION
Thank You
And Have A Nice Day