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What are the functions of Merchant Bankers

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 ROSHNI asked about 3 years ago

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Open uri20170510 32134 1c996lj?1494421732 Anil answered almost 3 years ago

The functions of merchant banking are listed as follows: 1.Raising Finance for Clients : Merchant Banking helps its clients to raise finance through issue of shares, debentures, bank loans, etc. It helps its clients to raise finance from the domestic and international market. This finance is used for starting a new business or project or for modernization or expansion of the business. 2.Broker in Stock Exchange : Merchant bankers act as brokers in the stock exchange. They buy and sell shares on behalf of their clients. They conduct research on equity shares. They also advise their clients about which shares to buy, when to buy, how much to buy and when to sell. Large brokers, Mutual Funds, Venture capital companies and Investment Banks offer merchant banking services. 3.Project Management : Merchant bankers help their clients in the many ways. For e.g. Advising about location of a project, preparing a project report, conducting feasibility studies, making a plan for financing the project, finding out sources of finance, advising about concessions and incentives from the government. 4.Advice on Expansion and Modernization : Merchant bankers give advice for expansion and modernization of the business units. They give expert advice on mergers and amalgamations, acquisition and takeovers, diversification of business, foreign collaborations and joint-ventures, technology up-gradation, etc. 5.Handling Government Consent for Industrial Projects : A businessman has to get government permission for starting of the project. Similarly, a company requires permission for expansion or modernization activities. For this, many formalities have to be completed. Merchant banks do all this work for their clients. 6.Special Assistance to Small Companies and Entrepreneurs : Merchant banks advise small companies about business opportunities, government policies, incentives and concessions available. It also helps them to take advantage of these opportunities, concessions, etc.

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Open uri20170510 32134 tcchcu?1494421832 Jitendra Suthar answered about 3 years ago

Hiiii friend,,,,,, The functions of merchant banking are listed as follows: 1. Raising Finance for Clients : Merchant Banking helps its clients to raise finance through issue of shares, debentures, bank loans, etc. It helps its clients to raise finance from the domestic and international market. This finance is used for starting a new business or project or for modernization or expansion of the business. 2. Broker in Stock Exchange : Merchant bankers act as brokers in the stock exchange. They buy and sell shares on behalf of their clients. They conduct research on equity shares. They also advise their clients about which shares to buy, when to buy, how much to buy and when to sell. Large brokers, Mutual Funds, Venture capital companies and Investment Banks offer merchant banking services. 3. Project Management : Merchant bankers help their clients in the many ways. For e.g. Advising about location of a project, preparing a project report, conducting feasibility studies, making a plan for financing the project, finding out sources of finance, advising about concessions and incentives from the government. 4. Advice on Expansion and Modernization : Merchant bankers give advice for expansion and modernization of the business units. They give expert advice on mergers and amalgamations, acquisition and takeovers, diversification of business, foreign collaborations and joint-ventures, technology up-gradation, etc. 5. Handling Government Consent for Industrial Projects : A businessman has to get government permission for starting of the project. Similarly, a company requires permission for expansion or modernization activities. For this, many formalities have to be completed. Merchant banks do all this work for their clients. 6. Special Assistance to Small Companies and Entrepreneurs : Merchant banks advise small companies about business opportunities, government policies, incentives and concessions available. It also helps them to take advantage of these opportunities, concessions, etc. 7. Services to Public Sector Units : Merchant banks offer many services to public sector units and public utilities. They help in raising long-term capital, marketing of securities, foreign collaborations and arranging long-term finance from term lending institutions. 8. Corporate Restructuring : It includes mergers or acquisitions of existing business units, sale of existing unit or disinvestment. This requires proper negotiations, preparation of documents and completion of legal formalities. Merchant bankers offer all these services to their clients. 9. Money Market Operation : Merchant bankers deal with and underwrite short-term money market instruments, such as: Government Bonds. Certificate of deposit issued by banks and financial institutions. Commercial paper issued by large corporate firms. Treasury bills issued by the Government (Here in India by RBI). These are some of the features of Merchant Bankers. Thanks & Regards,

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Data?1494421636 Deep answered about 3 years ago

A merchant bank differs from a regular investment bank as it generally deals in the commercial banking requirements of international finance as well as stock underwriting and long-term corporate loans. A merchant bank is known as a wholesale bank and isn't used by the general public. Most merchant banks deal with large corporations as well as with other merchant banks, large financial institutions and, sometimes, various governments around the world. There are several major functions that a merchant bank carries out. **Stock Underwriting** This is one of the most common functions of a merchant bank. When owners of a large company want to raise capital through investors on the stock market, they can acquire the services of a merchant bank to take care of the job. The bank will determine the amount of stocks that are to be issued as well as their price, and when to issue the new stock. The merchant bank will file all of the necessary paperwork with the proper market division and may also market the stock. If there's a large stock offering, a few merchant banks might work on the project together. However, one of the banks will typically act as the head underwriter on the job. **Issue Management** In the function of issue management, a merchant Bank will help the capital market to increase the supply of securities. The bank will help a private limited company convert into a public limited company. The bank will do this by dealing with the proper authorities and by preparing a prospectus for the public issue of debentures and shares. The bank will help collect the application money, scrutinize the applications, as well as arrange for the allotment of the debentures and shares. **Portfolio Services** Another important function of a merchant bank is to supply a variety of portfolio management services to their customers. Most merchant banks can also provide various other services to their clients. These often include actions such as project counselling, mergers and acquisitions, and pre-investment studies. Some of the other functions may be asset securitization, factoring, and capital restructuring.

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Picsjoin 2017224123730582 Archana answered about 3 years ago

Hie Roshni, **Following are the functions of Merchant Bankers :-** The basic function of merchant banker or investment banker is marketing of corporate and other securities. In the process, he performs a number of services concerning various aspects of marketing, viz., origination, underwriting, and distribution, of securities. During the regime of erstwhile Controller of Capital Issues in India, when new issues were priced at a significant discount to their market prices, the merchant banker’s job was limited to ensuring press coverage and dispatching subscripttion forms to every corner of the country. Now, merchant bankers are designing innovative instruments and perform a number of other services both for the issuing companies as well as the investors. The activities or services performed by merchant bankers, in India, today include: 1. Project promotion services. 2. Project finance. 3. Management and marketing of new issues. 4. Underwriting of new issues. 5. Syndication of credit. 6. Leasing services. 7. Corporate advisory services. 8. Providing venture capital. 9. Operating mutual funds and off shore funds. 10. Investment management or portfolio management services. 11. Bought out deals. 12. Providing assistance for technical and financial collaborations and joint ventures. 13. Management of and dealing in commercial paper. 14. Investment services for non-resident Indians

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