Professional Documents
Culture Documents
e. Assisting in the(TechnicalselectionConsultancyOrganizations)of
forTCOspreparing project reports
h. Capital structuring
a. Issue through prospectus, offer for sale and private placement. b. Marketing and
underwriting
c. pricing of issues
Merchant banker first makes an appraisal of the project to satisfy that it is viable b.
He ensures that the project adheres to the guidelines for financing industrial projects.
c. It helps in designing capital structure, determining the promoters amount of term
loan to be raised. d. After verifications of the project, the Merchant Banker arranges
for a preliminary meeting with financial institution. e. If the financial institution
agrees to consider the proposal, the application is filled and submitted along with
other documents.
(vii) Working Capital: The Companies are given Working Capital finance,
depending upon their earning capacities in relation to the interest rate prevailing in
the market.
(viii)Venture Capital: Venture Capital is a kind of capital requirement which
carries more risks and hence only few institutions come forward to finance. The
merchant banker looks in to the technical competency of the entrepreneur for venture
capital finance.
(ix). Fixed Deposit: Merchant bankers assist the companies to raise finance by way
of fixed deposits from the public. However such companies should fulfill credit
rating requirements.
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 theres 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.
(x)Other Functions
Small Scale industry counseling- counseling SSI units on marketing and finance
Assistance to NRI investors - the NRI investors are brought to the notice of the
various investment opportunities in the country.
Foreign Collaboration: Foreign collaboration arrangements are made by the
Merchant bankers.