The nine regulations would promote a primary market which is fair, efficient, flexible and inspire confidence. Maintenance of Book of Accounts, Records, etc 3. Risk capital scheme of I F C I venture capital fund of I D F I etc. Any change in flow of funds and the demand of them, is clearly reflected in — a. They additionally conduct researches on equity shares, advise the clients on the share to be purchased, the time of purchase, quantity of such purchase and the time for selling these shares.
Maintenance of Book of Accounts, Records, etc. In case of fixed price issue, the company itself fixes the price of the shares in consultation with the merchant banker. In India Merchant banking along with management of public issues and loan syndication covering activities like1. Who carry on any activity of issue management a. We further confirm that the agreement entered into between the bankers to the issue and the issuer specifically contains this condition. Restriction on Appointment of Lead Managers: The number of lead merchant bankers may not, exceed in case of any issue of; Obligation 8.
Expansion of existing units 3. Lower cost of borrowing 3. Machiraju, Merchant Banking- Principles and Practices, 2003, p. The merchant banker shall allow the inspecting authority to have reasonable access to the premises occupied by such merchant banker or by any other person on his behalf and also extend reasonable facility for examining any books, records, documents and computer data in the possession of the merchant banker or any such other person and also provide copies of documents or other materials which, in the opinion of the inspecting authority are relevant for the purposes of the inspection. This fee is to be shared by all lead managers, advisers etc. All of the above 8.
Merchant banks also performs the function of taking a decision as to the size and timing of the public issue in the light of prevailing market conditions, press coverage, underwriting support from brokers institutional underwriters etc. Based on their studies, merchant banker advises on the restructuring or reorganisation of capital base. In simple terms, the management of issues for raising funds through various types of instruments by companies is known as: a. All of the above 2. Thus, merchant bankers not only act as experts of the type, timing and terms of issues of corporate securities and make them acceptable for the investors on the one hand and also provide flexibility and freedom to the issuing companies. There is a fee charged by the lessor charges which is referred to asthe rentals. Merchant banker has to pay authorization fee, annual fee and renewal fee.
Some of these bankers are operating mutual funds as well as offshore funds. In addition, merchant bankers undertake underwriting services for an issue, including registration of the offer document, handling marketing and publicity for the issue, providing underwriting support and l isting on the stock exchanges. The merchant banks do not act as repositories for savings of the individuals. The valuation is arrived at on the basis of certain qualitative and quantitative factors that include earning per share, price earnings ratio, return on net worth, net asset value, comparison of accounting ratios with listed industry peers, etc. Other factors relevant to the selection of the merchant banker is the bank's track record, reputation and most importantly the relationship with institutional investors.
While filing the copy of the red-herring prospectus, prospectus or letter of offer , as the case may be , with the board, can also file the copy of red herring prospectus , prospectus with the stock exchange. Merchant bank is an organization thata. A merchant banker is able to raise capital from the investing public and provide the same to the companies which are in need of them. Dispatch of share certificates iii. Advise on modernisation and expansion Merchant bankers advise on amalgamations, mergers, acquisitions, takeovers, foreign collaborations, diversification of business, technology up-gradation, joint-ventures, etc.
Code of conduct for merchant bankers Since merchant banking is a profession, like all other professionals, merchant bankers must abide by a specific and strict code of conduct. They perform a combination of consultancy and banking services. Merchant banker, lead manager b. Organizing long term resources for working capital purposes a. None of the above 5. Indian Bank Merchant Banking Services Ltd.
In India, merchant Banks operate in the form of divisions of India and foreign banks and financial institution, Subsidiary companies established by1. However, the role of a merchant banker goes beyond the mere wordings of the regulations. Securities Exchange Board of India Act, 1992, § 30. Considering how much the merchant are professionally competent. Management of dividend and interest Merchant banks help the clients in the management of the interest on the debentures or loans, as well as the dividend on the shares. Securities Exchange Board of India Merchant Bankers Regulations, 1992, Regulation 8A 4.