2. Who are Merchant Bankers?
A merchant banker means any person who is engaged
in the business of issue management either by making
arrangement regarding selling buying or subscribing to
securities or acting as manager / consultant /advisors or
rendering corporate advisory service in relation to such
issue management.
Issues means an offer for sale / purchase of securities
by any body corporate / other person or group of person
on their behalf to or from the public or from the holders
of their securities through a merchant banker.
Merchant bankers or lead mangers are very important in
the process of capital issues and in the case of right
issues not exceeding Rs 50 lakh.
3. Scope Merchant banking in India
1. Growth of new issue market.
2. Entry of foreign investors.
3. Changing policy of financial institutions.
4. Development of debt market.
5. Innovations in financial investments.
6. Corporate restructuring.
7. Disinvestment.
4. Roles of merchant banker
• No M.B shall agreed to manage or to be
associated with any issue unless his
responsibility relating to the issue discloses
allotment and refund are clearly defined.
• Management of public issue of securities
• Provide advisory service to projects
• Also acts as the underwriter with regards to
public issue management business
5. Function of merchant banker
• Marketing of corporate and other
securities.
• Project promotion services
• Project finance
• Underwriting of new issues
• Corporate advisory service
• Syndication of service
• Providing venture capital
6. Responsibility of M.B of pre issue of
securities
• Submitting of document
• Submitting an undertaking
• Submitting list of promoter group
• Appointment of intermediaries
• Appointment of underwriter
• Making the offer document public
• Filling a no complain certificate
• Appointing a price collection agents
• Entering into agreements with the depository
7. Responsibility of M.B of post
issue of securities
• Submitting post issue monitoring reports
• Redressal of investors grievances
• Maintaining a close coordination with
intermediaries
• Ensuring full subscription of the issue
• Verifying post issue advertisement details
• Financials bases of allotment & allotment
procesures.
8. SEBI GUIDELINES
IPO & Primary Market
Company
Merchant bankers
Underwriters
Stock Broker & Sub-broker to the issue
Banker to the issue
Registrar to the issue & Share transfer agent
Investors protection & Education
Venture Capital
Foreign Institutional Investors (FII)
