Seller BANKINGSERVICES – some thoughts

Merchant banking origin

  Merchant banks, now the fact that in The original "banks". These are by the medieval Italian grain merchant Was invented. Lombardy Lombardy merchants and bankers, the key Plain on the back of growing cereal crops in Spain Many Jews were exiled away from persecution in 613 entered the trade. They deal with crop growing in the middle of normal, Bring the ancient practices and the Far East, along the Silk Road, long distance Jews for the financial products trades.The land in Italy Could not hold, so they deal with the great Squares and halls of Lombardy, enter the local merchants, and crops Trading on the bench to set their own. They are one of the locals Has a big advantage over. Christians strictly Ring Payment of the crime was forbidden. Jewish immigrants on the other hand, farmers Field by the Church considering the rates of usury, in what High risk loans for crops, but can borrow Jews were not binding. They can be safe In this way, selling rights for the final harvest crops. Then They shipped the grain to the port for the delivery of long march began. In both cases, the discount against the current in their own interests The price of creating the future. This takes a lot of time trading with both hands was Soon there were grains of merchants trading grain debt instead of class I got you.

In the above line of corporate securities in the stock market Pub is looking for a resource. Merchant Bank as an intermediary The ultimate purchase of the issued capital investment of these securities.Merchant Behavior of bank capital and the capital needs of these entities and Matching is a financial intermediary. This lack of capital in the market Is the ability to easily.  

Merchant Banking Activities to help:

1. Finance productive public investment on roads In canalizing surplus
2. To adjust the registrar, bankers, advertising Agencies, such as a printer sharing problem, the activities of multiple agents, Underwriters, brokers, etc.
3. To ensure compliance with rules and regulations With the government securities market

Key features of merchant banks Covers the following:

1. The main function of the seller to manage Bank - this form of debt and equity offering. He is on the market Raising funds to support the company. Key areas of work such Terms include: instrument design problems of a document that provides Registration, support, purchase price, and the issue, allocation and refund of the marketing, Stock exchange list
2. Deployment and distribution - Merchant banker The equity shares, debt securities, such as distributing a variety of instruments to help, Mutual fund products, fixed deposits, insurance products, and commercial paper to name a few To specify. Merchant bankers of the distribution network is divided into Institutional and retail is a natural. Agency network, with a mutual fund Composition, foreign institutional investors, private equity funds, pension funds, financial institutions Represents the size of the network, such as merchant banks Wholesale reach. Retail investors in the networking and the different networks.
3. Corporate Advisory Services - provide their merchant bank Customized solutions for customers' financial problems. Here's what they There are two main areas to seek advice.
4. Finance Right debt structure – to determine the capital adequacy ratio to the client The gearing ratio, including the appropriate capital structure theory is also framed. Merchants Bank also explore the client and the funding of alternative tuning Resources are undervalued. Another area of advice, rehabilitation and treatment Management. The case of sick units, the merchant banker, a revival in the control You can design a package from and merchant bankers seeking to Risk management advice to banks and financial institutions areas. Ttoitda. He advises clients on the other to stop and offer appropriate strategies Strategy.
5. Business Advisory Services - Merchant charge Banks in various stages of the project to help their customers Clients. They are in the early stages of a project idea In concept they can help. The formation of an idea, They examine the viability of the proposed project feasibility study Will be held. They also detailed reports of the project, such as Assist clients in preparing other documents.
6. Loans Syndicated – their merchant bank to arrange financing to bind Customers. It consists of a series of steps. First They can be defined in terms of a debt-based clients You can analyze the pattern of cash flows. The merchant bank Many banks and financial institutions and their circulation in the syndicate Invited to participate in preparing a detailed memorandum of the loan. Banks Once the negotiations on the final allocation of which the loan conditions.
7. Banks to provide venture capital and mezzanine finance - Franchise companies to help finance their new and innovative strategies to To obtain financing for the venture capitalists.

Registration of Merchant Banks

Registration of the Merchant Bank of India, SEBI and Obligation is to accomplish a task. Applicants must comply with the following: Code:

1. The applicant must be a body corporate
2. Applicants Any business other than that associated with the securities market, if you like Would not have
3. The applicant office space, equipment, personnel, etc., such as You must have the necessary infrastructure
4. The applicant previously Experienced two or more employees must have a merchant banking
5. Relates to the company, group companies, subsidiaries, or between Merchant banker registered with the applicant company should not have been
6. Applicant should not have been involved in any securities fraud or Convicted for a crime
7. The minimum net worth Rs.5 applicant should crores

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