ppt merchant bank
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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
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