Services Provided by Merchant Banks 🛠️

Merchant bankers are the "Jack of all trades" for the corporate world.

1. Issue Management (IPO) 📢

• The Core Function.
• Helping companies raise funds from public (IPO/FPO).
• Tasks:
  • Drafting Prospectus.
  • Appointing Registrars, Bankers, Advertising Agency.
  • Deciding Price of share.
  • Listing on Stock Exchange.

2. Project Counseling 🏗️

• Advising companies on new projects.
• Feasibility Study: Is the project profitable?
• Project Report: Preparing detailed report for banks.
• Location: Where to set up the factory?

3. Loan Syndication 🤝

• When a company needs a huge loan (e.g., ₹5000 Crore), one bank cannot give it.
• Merchant Banker forms a Syndicate (Group) of banks to share the loan.
• Role: Arranging the loan from multiple lenders.

4. Underwriting 🛡️

• Guarantee given by Merchant Banker to subscribe to the unsold portion of shares in an IPO.
• Benefit: Ensures the issue does not fail (Minimum Subscription).
• Fee: Underwriting Commission.

5. Portfolio Management 💼

• Managing investments of High Net Worth Individuals (HNIs) and Institutions.
• Buying/selling shares on their behalf to maximize returns.

6. Corporate Counseling 🗣️

• Advising on:
  • Mergers & Acquisitions (M&A).
  • Capital Restructuring (Debt vs Equity mix).
  • Revival of Sick Units.

Quiz Time! 🎯

💡 Final Wisdom: "From birth (Project Counseling) to marriage (Mergers) to daily life (Portfolio Management), Merchant Bankers are the corporate doctors!" 👨‍⚕️💼

Next up: Merchant Banking in India - Problems & Scope! 🇮🇳