19-01-2013, 01:26 PM
Merchant Banking
Merchant.ppt (Size: 153.5 KB / Downloads: 22)
Origin of Merchant Banking
13th Century merchant bankers were traders of commodities and acted as bankers to the kings of European states.
They Financed the continental wars and coastal trades.
They lent their names to lesser known traders by accepting bills through which they guaranteed that the holder of the bill would receive full payment.
Managers to the issue or Merchant Bankers(roles)
Advise on the capital structure, instrument of issue.
Pricing
Assessing and appraisal of project report.
Appointment of bankers, underwriters, brokers, registrars, printers and advertisement agents.
Holding brokers-Underwriters,
Press and investor conferences.
Deciding the pattern of advertisement.
Deciding the collection branches where application can be received or collected.
Deciding on the dates of opening and closing of the subscription list.
Obtain daily report of the applications and amounts collected at branches.
Factors to select a MB
Ethics and integrity.
Reputation.
Trained & committed manpower.
Concern & interest of clients.
Liaison and networking.
Relationship & Contacts.
Infrastructure.
Past performance.
Factors to select a client.
Track record of the company.
Track record of the promoters.
Professional management.
Financial strength of the promoters and the company.
Economic viability of the project.
Prime Objectives of MB
Providing long term funds to the projects or companies.
Project counseling- loan syndication, project appraisal and arrangement of Working capital.
Deciding the capital structure.
Portfolio Management
Underwriting
Corporate advisory & issue mgmt.