COMMERCE FORUM – MILENIO EMPRESA
MERCHANT BANKING IN
Merchant Banks
To meet the Long-term requirement of funds, the corporate sector enterprises issue shares and debentures. To raise money from capital market, promoters bank upon merchant bankers.
A merchant bank may be defined as corporate bodies which provides services such as project counseling, corporate counseling in areas of capital restructuring, amalgamations, mergers, takeover etc., discounting and rediscounting of short-term paper in money markets, managing, underwriting and supporting public issues in new issue market and acting as brokers and advisers on portfolio management in stock exchange. Merchant banking activities have impact on growth, stability and liquidity of money markets.
Merchant Banking in
The need for specialized merchant banking service was felt in
The State Bank of
Qualities Required of Merchant Bankers
Merchant bankers play a significant role as a catalyst to transform the project ideas into industrial ventures. To perform these services effectively the merchant bankers are expected to possess:
1. Ability to analyse various aspects such as technical, financial and economic aspects concerning the formation of an industrial project.
2. Knowledge about the various aspects of capital markets, trends in stock exchange, psychology of investing public, change in the economic and technological environment in the country.
3. Ability to build up the bank-client relationship.
4. Innovative approach in developing capital market instruments to satisfy the ever changing needs of investing public.
5. Integrity and maintenance of high professional standards.
Inspite of global competition for Indian Merchant bankers, the present day capital market scenario provides a vast scope for merchant bankers to expand their operations both in domestic and international market if they develop adequate infrastructure including expertise.