Ppt merchant bank

B.R.C.M. COLLEGE OF BUSINESS ADMINISTRATION

2014

STOCK EXCHANGE AND PORTFOLIO MANAGEMENT

Avaan Jungalwala

T.Y. B.B.A. (Finance)

Roll no. 31

Submitted To : Mrunal Sir

Submitted on: 29/9/14

MERCHANT BANKING

INTRODUCTION TO MERCHANT BANKING

Historically, merchant banks' original purpose was to facilitate and/or finance production and trade of commodities, hence the name "merchant".

A “Merchant Banker ” could be defined as “An organization that acts as an intermediary between the issuers and the ultimate purchasers of security in the primary security market” .

Merchant banker has been defined under SEBI , merchant bankers rule, 1992 as “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 , advisor or rendering corporate advisory service in relation to such issue management”.

Merchant Banking came into existence in 17th & 18th century in Italy & France. Merchant banking in the modern era started from London; Merchants started to finance the foreign trade through acceptance of bill.Merchant Banking officially came to India through Grind lays Bank in 1969. Recognized the requirements of Entrepreneurs for diverse financial services.As of today there are 135 Merchant bankers who are registered with SEBI, India . This includes Private, Public & Foreign players.

SERVICES OF MERCHANT BANKING

THE SERVICES PROVIDED BY MERCHANT BANKS :

Project counseling Feasibility studies Project reports Design of capital structure Underwriting Loan syndication Mobilization of funds

Mergers Amalgamation Take over and many more.

Merchant Banking is a skill based activity and involves serving financial needs of every client . Merchant bankers can turn to any of the activities depending upon resources, such as capital , foreign tie-ups for overseas activities and skills.

FUNCTION OF MERCHANT BANKING

Raising Finance For Clients Broker In Stock Exchange Project Management Advice On Expansion And Modernization Managing Public Issue Of Companies Handling Government Consent For Industrial ProjectsSpecial Assistance To Small Companies And EntrepreneursServices To Public Sector Units Rival Of Sick Industry Units Portfolio Management

Corporate RestructuringMoney Market OperationLeasing Services Management Of Interest Dividend

Registration With SEBI As Merchant Banker

Categories For Registration:

There basically four categories for which registration may be granted:

CATEGORIES FOR REGISTRATION

ACTIVITIES CARRIED OUT BY

MERCHANT BANKS

CAPITAL REQUIREMENT FOR

REGISTRATION

Category IIssue Management , Adviser, Consultant ,

Manager , Underwriter , Portfolio Manager

Rs. 5 crores

Category IIAdviser, Consultant ,

Co-Manager , Underwriter , Portfolio

Manager

Rs. 50 lakhs

Category III Adviser, Consultant , Underwriter

Rs. 20 lakhs

Category VI Adviser, Consultant nil

Every merchant banker should maintain copies of balance sheet , Profit and loss account statement of financial position.

Half-yearly unaudited result should be submitted to SEBI.

SEBI has been vested with the power to suspend or cancel the authorization in case of violation of the guidelines.

Every merchant banker shall appoint a ‘Compliance Officer‘ to monitor compliance of the Act.

SEBI has the right to send inspecting authority to inspect books of accounts , records etc… of merchant bankers.

Inspections will be conducted by SEBI to ensure that provisions of the regulations are properly complied.

An initial authorization fee , an annual fee and renewal fee may be collected by SEBI.

A lead manager holding a certificate under category I shall accept a minimum underwriting obligation of 5% of size of issue or Rs.25 lakhs whichever is less

PROCEDURE OF GETTING REGISTRATION

Firstly , the bank have to submit an application to SEBI in Form A of the SEBI (Merchant Bankers Regulation 1992) . If the application satisfies all the requirements than the SEBI will issue a certificate of registration in Form B of the SEBI (Merchant Bankers Regulation 1992) . And secondly the bank have to pay registration fee to SEBI i.e. Rs. 5 lakhs within 15 days after receiving grant from SEBI. This certificate is valid upto 3 years and after that it have to be renewed by paying Rs. 2.5 lakhs.

Banker Name City / State

Axis Bank Limited (Formerly UTI Bank Limited) Ahmedabad / Gujarat

Bajaj Capital Limited New Delhi / Delhi

Bank of America, N.A Mumbai / Maharashtra

Bank of Maharashtra Mumbai / Maharashtra

Barclays Bank Plc Mumbai / Maharashtra

Barclays Securities (India) Private Limited Mumbai / Maharashtra

SOME OF THE MERCHANT BANKS

BNP Paribas Mumbai / Maharashtra

BOB Capital Markets Limited Mumbai / Maharashtra

Brescon Corporate Advisors Limited Mumbai / Maharashtra

Brics Securities Limited Mumbai / Maharashtra

Calyon Bank (Formerly Credit Agricole Indosuez) Mumbai / Maharashtra

Canara Bank Banglore / Karnataka

CD Equisearch Private Limited Kolkata / West Bengal

Centbank Financial Services Ltd. Mumbai / Maharastra

Central Bank of India Mumbai / Maharashtra

Centrum Capital Limited (Formerly Centrum Finance Limited)

Mumbai / Maharashtra

Chartered Capital & Investment Ltd. Ahmedabad / Gujarat

Thank You