“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 services in relation to such issue management” - SEBI Merchant Bankers rules 1992
A merchant bank is a monetary organization that basically manages commercial banking needs of worldwide money, long haul credit for organizations, gives counseling services and endorsing of stock. It additionally goes about as a middle person between the issuers and definitive buyers of the securities in the essential market.
Despite the fact that the State Bank of India is the primary establishment to set up a different division for merchant Banking administrations in 1972, its services were begun in 1967 by National Grind lays Bank subsequently followed by CITI Bank in 1970.
The fundamental contrast between merchant banking and business banking is, business banking includes accepting deposits and giving credits and advances though merchant banking includes delivering of the services for a charge.
1.Helps Clients In Fundraising:
Assistance is rendered to raise loans for projects after determining the promoter’s contribution. They also help companies in raising finance by way of public deposits. Credit Syndication alludes to getting advances from a development finance institution or an organization or consortium. Merchant Banks assist corporate customers with raising syndicated loans from commercials bank.
2. Going about as the Stock Exchange broker purchasing and selling securities for their clients goes under their obligations. They perform total point by point stock market research on the various securities on the lookout and aides their customers wherein to contribute for better development and benefit.
3. Helps In the Management of the Project
It incorporates preparation of Project Reports, it decides Upon the Financing Pattern, Appraising the Project regarding Its Technical Commercial and Financial Viability and It Includes Filling from Application Forms for Obtaining Funds from the institution.
4. Taking care of Companies Public Issues:
The board of issues includes the advertising of corporate securities, Value shares, preference offers and debentures by offering them to the public.
5. Helps In Managing the Portfolio of Its Clients:
The merchant banker aides the investor in issues relating to investment choices. The viable administration of Securities Tax assessment and inflation are considered while prompting on investment in different securities. Investments are done in a way that ensures maximum returns and minimum risk.
6. Advisory Services:
Merchant banker goes about as mediators among offer or and offer, arranges method of installment. The merger is a blend of at least two organizations into one organization where one endures and the other loses its identity. Takeover is the buy by one organization procuring controlling revenue in the share capital of another organization.
The role of merchant banker is quite vast. Where commercial bank offers general banking facilities like opening a bank account, lending money to people, merchant banking, however, offers a wide spectrum of financial services to multinational corporations and high net worth clients.
Also, merchant bank provides financial services like fundraising for SMEs to scale their business to an upper level. The availability of merchant banks in India is less than commercial banks, despite they are in equal demand as commercial banks.
Swastika Investmart Ltd. Group : Registered with
SEBI Reg. No. : NSE/BSE/MSEI/MCX/NCDEX: INZ000192732
Merchant Banking : INM000012102
Investment Adviser: INA000009843
CDSL/NSDL : IN-DP-115-2015
RBI Reg. No. : B-03-00174
IRDA Reg. No. : 713
NCDEX : 00844
Online Dispute Resolution : ODR
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.......... Issued in the interest of Investors"
Note: Standard warning- “Investment in securities market are subject to market risks, read all the related documents carefully before investing"
RISK DISCLOSURES ON DERIVATIVES.
Source: SEBI study dated January 25, 2023 on “Analysis of Profit and Loss of Individual Traders dealing in equity Futures and Options (F&O) Segment”, wherein Aggregate Level findings are based on annual Profit/Loss incurred by individual traders in equity F&O during FY 2021-22.
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