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What is the scope of merchant banking?

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What is the scope of merchant banking?

Merchant banks act as an intermediary/ middleman between business corporates and investors. In other words, merchant banking is financial intermediation between the business entities which require funds and the investors who possess ready capital and seeking an opportunity for investment so that they can make a return.

What is the scope of merchant banking in India?

The main functions of merchant banks are issue management, portfolio management and corporate counselling, whereas an investment bank is a banking institution that deals with established firms and helps them gain their long-term capital requirement, by acting as an intermediary between the company and investors.

What are the services of merchant banking?

Following are the services provided by the merchant bankers:

  • Corporate Counseling.
  • Project Counseling.
  • Loan Syndication.
  • Management of Capital Issues.
  • Corporate Advisory Services.
  • Portfolio Management.
  • Advisory Services to Mergers and Takeovers.
  • Consultancy to Sick Industrial Units.

What is the need of Merchant Bank?

Need for merchant banking is felt in the wake of huge public saving lying untapped. Merchant banker can play highly significant role in mobilizing funds of savers to invisible channels assuring promising returns on investment and thus can assist in meeting the widening demand for invisible funds for economic activity.

What are the qualities of merchant banker?

Characteristics of Merchant Banking:

  • The high proportion of decision-makers as a percentage of total staff.
  • Quick decision process.
  • Also, The high density of information.
  • Intense contact with the environment.
  • Loose organizational structure.
  • A concentration of short and medium-term engagements.

How do I become a merchant banker?

For registration as a Merchant Banker, an applicant is required to pay a non- refundable application fee of Rs. 50,000/- by way of demand draft drawn in favour of ‘Securities and Exchange Board of India’, payable at Mumbai. Securities and Exchange Board of India, SEBI Bhavan, Plot No.

What challenges do merchant bankers face?

1 crore may have to close down their business. The entry is denied to young, specialized professionals into merchant banking business. 3. Non co-operation of the issuing companies in timely allotment of securities and refund of application money is another problem of merchant bankers.

What is underwriting in merchant banking?

The dictionary meaning of underwriting is — ‘to agree to sell bonds etc., to the public, or to furnish the necessary money for such securities and to buy those which cannot be sold. It is similar to insurance business and involves risk evaluation.

What is the structure of Merchant Bank?

(a) A merchant bank may be organized as a corporation, limited liability company, limited partnership, or limited liability partnership.

Who are the clients of Merchant Bank?

Merchant Banks vs. The bank’s clients are large corporations that are willing to invest the time and money necessary to register securities for sale to the public. Investment banks also provide advisory services to companies about mergers and acquisitions (M&A) and provide investment research to clients.

What are the types of Merchant Bank?

All Merchant Banks In Nigeria

  • Coronation Merchant Bank.
  • FBN Quest Merchant Bank.
  • DSH Merchant Bank.
  • NOVA Merchant Bank.
  • Rand Merchant Bank.
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