Presentation of Merchant Banker
-
Upload
jatin-kambli -
Category
Documents
-
view
221 -
download
0
Transcript of Presentation of Merchant Banker
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 1/20
PRESENTED TO PROF VIDYASHEELA BANERJEE
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 2/20
Name Roll No.
Robin Awathare M1001
Jatin Kambli M1016
Mahesh Patade M1034
Rakesh Patil M1036
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 3/20
Introduction History
Merchant banking in India
Role of merchant bank Setting up a merchant banking outfit
Objectives
Obligations and Responsibilities
Code of Conduct
Guidelines of SEBI
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 4/20
Merchant bankers assist corporate in raising capital.They assist in issue of Shares, syndicating loans,public issue of debentures.
They also actively arrange working capital, appraisalProjects scrutinize & persuade merger proposals.
In BRITAIN merchant bankers & investment bankersare synonymous.
In the U.S., Merchant bank means as investment bankwhich is well-equipped to handle multinationalcorporations.
Merchant banks in India are not allowed to conductany business other than that related to securitiesmarket.
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 5/20
ORIGIN Merchant Banking in India – Historical Perspective
1. JAGAT SHETH (1720-1773AD, BENGAL)
2. HABIB & SONS which is now HABIB BANK
Merchant Banking in India – Post Independence
1. In 1967, RBI issued its first merchant bankinglicense to grind lays
2. State bank of India started the merchant bankingdivision in 1972
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 6/20
Stock underwriting Project counselling
Loan syndication
Issue management Portfolio management
Nri investment :
Advisory service relating to mergers and
takeovers
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 7/20
Formation of the Business Organization Adoption of a viable business plan
Registration of Merchant Bankers1. Application for grant of certificate
2. Application to conform to the requirements
3. Furnishing of information, clarification andpersonal representation
4. Consideration of application
5. Procedure for Registration
6. Payment of fees and the consequences of failure topay fees
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 8/20
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 9/20
Industry compartmentalizationo Expertise in underwriting, hire purchase, leasing,
and portfolio management, money-lending, etc.
oRBI does not permit merchant banking firms to get
into these activitiesopromoters have to setup different companies for
different purposes
oManagement cost increases and expertise pooling
i.e. multiple use of same talent is not possible
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 10/20
Malafide practiceso Corporate have excessively friendly
approach
o Favored allotment of shares, tamperingwith project appraisal report to bankers iscommon
o Corporate like to use merchant bankers for
malafide intentions
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 11/20
Regulations
oMuch better and scope for further improvement
oMore accountable and responsible
o Professional qualification focused on merchant
banking is not available
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 12/20
Size and dynamics of the market
o Indian market is growing. In fact India is one of the
largest emerging markets. Obviously, public issues,
FDI, debt raising are on rise. Lots of new projects
are happening. Merchant bankers have lots space to
contribute.
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 13/20
Banking policies
o RBI prefers that commercial banks do not indulge in
merchant banking business directly.
o They should setup a subsidiary for the purpose. This
limits scope of commercial banks and gives space to
merchant bankers.
o Some countries allow commercial bankers to get
involved in IPO’s, placement of debentures, etc.
o Indian scenario is favorable to merchant bankers.
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 14/20
Corporate culture
o corporate can do project appraisal, strategic
restructuring in house as well.
o If the corporate prefer third-party independent
assessment, then only they will engage merchant
bankers. Otherwise merchant banker’s role is only
statutory as in issue management.
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 15/20
Corporate dynamics
oMore happening in business gives more
opportunities to merchant bankers.
oMergers, takeover acquisition, new projects, fund
raising for government institutions, active money
market are all providing better business prospectus
to merchant bankers.
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 16/20
Upto 1970, there were only two foreign banks
SBI was the first Indian commercial bank andICICI the first financial institution to take up
the activities in 1972 and 1973 respectively In 1980’s some commercial banks set – up
their subsidiaries
Large stock broking firms and financial
consultants Growth after the process of economic reforms
and deregulation of Indian economy in 1991
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 17/20
The number of merchant banks increased to115 by the end of 1992-93, 300 by the endof 1993-94 and 501 by the end of August,1994
A large number of reputed internationalMerchant Bankers like Merrill Lynch, MorganStanley, Goldman Sachs, etc.
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 18/20
Leading Merchant Bankers in India, offeringspecialized services to Banks, PSUs, State ownedCorporations, Local Statutory bodies and
corporate sector
Serviceso Merchant Bankingo
Commercial Bankingo Investmentso Underwritingo Loan Syndication
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 19/20
Other Serviceso Equity Issue (Public/Rights) ManagementoDebt Issue Managemento Private Placementso
Project AppraisalsoMonitoring Agency Assignmentso IPO FundingoAgriculture Consultancy ServicesoCorporate Advisory ServicesoMergers and Acquisitionso Buy Back Assignmentso Share Valuations
8/3/2019 Presentation of Merchant Banker
http://slidepdf.com/reader/full/presentation-of-merchant-banker 20/20
Issue management serviceso Project Appraisalo Capital structuringo Preparation of offer documento Tie Ups (placement)o Formalities with SEBI / Stock Exchange / ROC etc.,o Underwritingo Promotion /Marketing of Issueso Collecting Banker / Banker to an issueo Post Issue Managemento Refund Bankerso Handling of Dividend Warrant/Interest Warrant Paymentso Debenture Trusteeship