Merchant Bankers in India: Categories, Services, and Leading Players
Explore the world of merchant bankers in India, including the categories of merchant bankers, key players in the industry, and the services they offer. Learn about public, private, and foreign merchant bankers, as well as their roles in major IPOs such as IRCTC and SBI Cards. Discover the minimum net worth requirements and activities associated with different categories of merchant bankers.
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Presentation Transcript
Topics covered: Merchant Bankers in India Categories of Merchant Bankers Lead Managers Restriction on number of Lead Managers B.Com(Hons) IV By: Rajni Bhowmik
Merchant Bankers in India Merchant Banking Services in India started in 1967 by National Grindlays Bank followed by Citi Bank in 1970. The State Bank of India was the first Indian commercial Bank to set up a separate merchant banking division in 1972.
In India, there are Public Sector, private sector as well as foreign merchant bankers in the Merchant Banking industry. PublicSector Merchant Bankers SBI Capital Markets Punjab National Bank IFCI Financial Services Bank of Maharashtra Karur Vysya Bank Ltd
Private Sector Merchant Bankers ICICI Securities YES Securities(India) Axis Bank Tata Capital markets Reliance Securities
Foreign merchant Bankers Goldman Sachs(India) Securities Morgan Stanley India Barclays Securities(India) DSP Merrill Lynch Citigroup Global Markets India
Categories of Merchant Bankers MinimumNet Worth Category Activities 1. Merchant Bankers can act as > Issue Managers > Advisor > Consultant > Underwriter > Portfolio manager. They carry out the activity of > issue management, >preparation of Prospectus, > determining financial structure Category I Rs 5 Crores 2.
Categories of Merchant Bankers Cont. Such Merchant Bankers can act as an Underwriter, advisor, consultant and portfolio manager. Category II Rs 50Lakhs They are allowed to act as underwriter, advisor and consultant only. Category III Rs 20 Lakhs They can merely act as consultant or advisor only Category IV Nil Capital
Lead Manager/Book Running Lead Manager Lead Managers are independent financial institution appointed by the company going public Companies appoint more than one lead manager to manage big IPOs. They are known as Book Running Lead Manager and Co-Book Running Lead Manager.
Lead Mangers activities Pre issue activities include Drafting and design of offer document, prospectus, statutory advertisement and memorandum. Also they draw up various marketing strategies for the issue. Post issue activities include Intimation of allocation and dispatch of refunds to bidders Management of escrow account etc
Restriction on appointment of Lead Managers - Sec. 19, SEBI(Merchant Bankers) Regulations, 1992 No. of lead merchant bankers Size of issue Less than Rs 50 crores Rs 50 crores but less Rs 100 cores Rs 100 crores but less than Rs 200 cores Rs 200 crores but less than 400 crores More than Rs 400 crores Two Three Four Five Five or more
