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MERCHANT BANKING
SUBMITTED BY
CLIFFTON KINNY, T.Y.B.B.I
ROLL NO: 8251
2014-2015
DECLARATION
I, Vijay khimji mahida, Roll No. 90. student of The Sydenham College
of Commerce and Economic, churchgate Mumbai-20, in the Master of c
Commerce part-1. in Banking and Finance (Semester 1) , hereby declare
that I have completed
Stamp of College
Signature of student,
(CLIFFTON KINNY)
(St. Andrews College of Arts,
Commerce, Science and
Management)
Signature of
External Examiner
Signature of Coordinator
CERTIFICATE
Stamp of college
Signature of Professor
ACKNOWLEDGEMENT
It gives me immense pleasure in acknowledging the valuable & cooperative assistance extended to me by the various individuals who have helped
me successfully in completing this project.
First of all I would like to show my gratitude to my guide and coordinator
Professor SHIRLEY PILLAI for their assistance, encouragement and support on
the topic MERCHANT BANKING.
I would also like to express my gratitude to the employees working in various
banks for helping me in my survey to complete my project.
I would like to thank my parents, friends & colleagues who have supported me
during the making of this research report. The information provided by them has
helped me gain practical understanding of the subject.
I would like to thank the Mumbai University for giving me the opportunity to carry
out the research.
It is the encouragement of all these people that has helped me proceed towards
achieving my goals.
INDEX
SR.N
O
1
TOPIC
EXECUTIVE SUMMARY
PG.N
O
7
RESEARCH METHODOLOGY
INTRODUCTION
11
13
17
10
25
11
37
12
CODE OF CONDUCT
38
14
39
15
CURRENT AFFAIRS
41
16
DIFFERENCE BETWEEN
45
17
CASE STUDIES
49
19
24
17.1
50
17.2
57
17.3
61
17.3
63
17.4
KOTAK MAHINDRA
65
17.5
IDBI BANK
68
18
74
19
CONCLUSION
85
18
BIBLIOGRAPHY
86
EXECUTIVE SUMMARY
Although merchant banking activity was ushered in two decades ago, it was only
in 1992 after the formation of Securities and Exchange Board of India that it is
defined and a set of rules and regulations governing it are in place. It is to be
emphasized that mere rules and regulations are not enough to evolve and nurture
sound traditions and practices in merchant banking and to build a vibrant capital
market. The quality of the projects that are proposed to be financed by capital
issues should be impeccable because it is the primary market that holds the key to
rapid capital formation, growth in industrial production and exports. The securities
sold to the public should represent genuine claims on future cash flows and viable
assets. Merchant bankers in India have a social responsibility to help build an
industrial structure, technologically second to none in the world and financially
viable.
Amidst the swift changes sweeping the financial world, Merchant Banking has
emerged as an indispensable financial advisory package. Merchant banking is a
service-oriented function that transfers capital from those who own to those who
can use it. They try to identify the needs of the investors and corporate sector and
advice entrepreneurs what to do to be successful. New players are entering in this
field day by day. Merchant Banking in India has a great demand over the globe. So
many companies in India are trying their hands in this field. Some companies have
built their strong image and some are still in process to leave their mark in the
international market.
RESEARCH METHODOLOGY
OBJECTIVES:
To develop the ability to study the functioning of Merchant Banking in
India & learn & apply multidisciplinary concepts, tools & techniques to
solve vital problems.
To familiarize with the various services provided by Merchant Bankers.
To compare the public & private sector company engaged in providing
merchant banking services on various grounds.
To find out the growth potential of the Merchant Banking public &
private sector companies.
To understand the rights & duties of a merchant banker and his
contributions to the overall banking system.
HYPOTHESIS
It would help us to develop the ability to study the functioning of Merchant
Banking in India & learn & apply multidisciplinary concepts, tools &
techniques to solve vital problems.
It familiarizes with the various services provided by Merchant Bankers.
They would help us to draw comparison between public & private sector
companies engaged in Merchant Banking activities.
Based upon the comparison, it would help us to determine which sector has
more growth potential & where should one invest his/her funds to maximize
the return at minimum risk.
RESEARCH DESIGN
A research design is an arrangement of conditions for collection and
analysis of data in a manner that aims to combine relevance to the research
purpose with economy ion procedure.
A sample design is a definite plan for obtaining a sample from a given
population.
For carrying out my research work I would follow Exploratory cum
Descriptive research design.
Universe and Survey Population Sampling
All the items under consideration in any field of inquiry constitute a
universe or population.
Here in this study universe and survey population sampling would be all the
public & private sector companies of India engaged in Merchant Banking
operations.
Sample Size
Sample size would be 7-8 public & private sector merchant banking companies.
Primary Data usually consists of the data that are collected afresh for the
first time and thus is original in character. Primary Data that used in the
study
Information gathered from various banks
Questionnaire
In my Questionnaire, there are 10 Questions
Newspapers
Websites
Books
Analysis Pattern
Statistical Tools- graphs & charts
Cross Tabulation Of Data
INTRODUCTION
Financial services are an important component of financial system. The smooth
functioning of financial system depends upon the range of financial services
extended by the providers. Financial services in India have witnessed remarkable
changes in the recent past after the implementation of Liberalization,
privatization and globalization.
Funds are tapped from the capital market to finance various mega industrial
projects. In attracting public savings, merchant bankers play a vital role as
specialized agencies. The resources raising functions remains to be the primary
business of a merchant banker. The primary market holds the key to rapid capital
formation, growth in industrial productions and exports. There has to be
accountability to the end use of funds raised from the market. The increase in the
number of issues and amount raised the number of merchant bankers. Therefore,
the field became highly competitive market where it requires a specialized skill in
handling the situation. The merchant bankers have a social responsibility to in
building an industrial structure in India.
Merchant bankers assist corporate in raising capital. They assist in issue of Shares,
syndicating loans, public issue of debentures. They do not provide funds. They
only assist. They also actively arrange working capital, appraisal, Projects
scrutinize & persuade merger proposals.
The merchant banking has been defined as to what a merchant banker does. A
merchant Banker has been defined by Securities Exchange Board Of India
(Merchant Banker) rules, 1992, as Any person who is engaged in the business of
issue management either by making arrangements regarding selling, buying or
subscribing to securities or acting as manager, consultant, advisor or rendering
corporate advisory services in relation to such issue management
HISTORY
In late 17th and early 18th century Europe, the largest companies of the world was
merchant adventurers. Supported by wealthy groups of people and a network of
overseas trading posts, the collected large amounts of money to finance trade
across parts of the world. For example, The East India Trading Company secured a
Royal Warrant from England, providing the firm with official rights to lucrative
trading activities in India. This company was the forerunner in developing the
crown jewel of the English Empire. The English colony was started by what we
would today call merchant bankers, because of the firm's involvement in financing,
negotiating, and implementing trade transactions. The colonies of other European
countries were started in the same manner. For example, the Dutch merchant
adventurers were active in what are now Indonesia; the French and Portuguese
acted similarly in their respective colonies. The American colonies also represent
the product of merchant banking, as evidenced by the activities of the famous
Hudson Bay Company. One does not typically look at these countries' economic
development as having been fueled by merchant bank adventurers. However, the
colonies and their progress stem from the business of merchant banks, according to
today's accepted sense of the word. Merchant banks, now so called, are in fact the
original "banks". These were invented in the middle Ages by Italian grain
merchants. As the Lombardy merchants and bankers grew in stature on the back of
the Lombard plains cereal crops many of the displaced Jews who had fled
persecution after 613 entered the trade. They brought with them to the grain trade
ancient practices that had grown to normalcy in the middle and Far East, along the
Silk Road, for the finance of long distance goods trades.
Christians were strictly forbidden the sin of usury. The Jewish newcomers, on the
other hand, could lend to farmers against crops in the field, a high-risk loan at what
would have been considered usurious rates by the Church, but did not bind the
Jews. In this way they could secure the grain sale rights against the eventual
harvest. They then began to advance against the delivery of grain shipped to distant
ports. In both cases they made their profit from the present discount against the
future price. This two-handed trade was time consuming and soon there arose a
class of merchants, who were trading grain debt instead of grain.
In the recent past there has been an inflow of qualified and professionally skilled
brokers in various stock exchanges of India. These brokers undertake merchant
banking related operations also like providing investment and portfolio
management services.
(D) Private Base
These merchant banking firms are originated in private sector. These organizations
are the outcome of opportunities and scope in merchant banking business and they
are providing skill-oriented specialized services to their clients. Some foreign
merchant bankers are also entering either independently or through some
collaboration with their Indian counterparts. Private sector merchant banking firms
have come up either as the sole proprietorship or public limited companies. Many
of these firms were in existence for quite some times before they added a new
activity in the form of merchant banking services by opening new divisions on the
lines of commercial banks and All India Financial Institutions.
Sole proprietorship
b.
Partnership firm
c.
d.
Corporate Enterprises
e.
Co-operative Society
Generally it is preferred that the Merchant Banking outfit be a registered company.
Merchant Banks are generally setup as subsidiary companies of banks (Public or
Private). For example, SBI caps, ICICI Securities etc.
2. Adoption of a viable business plan
All the basic tests required to find out whether the business to be undertaken is
viable or not are also applicable to a Merchant Banking setup. Capital adequacy,
profitability, growth opportunities and current market size are some of the factors
which need to be looked into.
Category I, that is
(i) To carry on any activity of the issue management, which will inter-alia consist
of preparation of prospectus and other information relating to the issue,
determining financial structure, tie-up of financiers and final allotment and refund
of the subscription; and
(ii) To act as adviser, consultant, manager, underwriter, portfolio manager.
Category II, that is, to act as adviser, consultant, co- manager, underwriter,
portfolio manager;
the applicant shall be a body corporate other than a non- banking financial
company
the merchant banker who has been granted registration by the Reserve Bank
of India to act as a Primary or Satellite dealer may carry on such activity subject to
the condition that it shall not accept or hold public deposit
the applicant has the necessary infrastructure like adequate office space,
equipments, and manpower to effectively discharge his activities
the applicant has in his employment minimum of two persons who have the
experience to conduct the business of the merchant banker
a person directly or indirectly connected with the applicant has not been
granted registration by the Board;
Category
Minimum Amount
Category I
Category II
Category III
Category IV
Nil
The applicant, his partner, director or principal officer is not involved in any
litigation connected with the securities market which has an adverse bearing on the
business of the applicant and have not at any time been convicted for any offence
involving moral turpitude or has been found guilty of any economic offence
II.
The main object of merchant banker is to create secondary market for bills
and discount or re-discount bills and acts as an acceptance house.
III.
Merchant bankers another objective is to set up and provide services for the
venture capital technology funds.
IV.
They also provide services to the finance housing schemes for the
construction of houses and buying of land.
V.
They render the services like foreign exchange dealer, money exchange, and
authorized dealer and to buy and sell foreign exchange in all lawful ways in
compliance with the relevant laws of India.
VI.
They will invest in buying and selling of transfers, hypothecate and deal
with dispose of shares, stocks, debentures, securities and properties of any
other company.
Equity raising:
8) Assistance in ADR/GDR
Debt raising:
Preparation
of
bankable
Strategic advice:
12)
Advice
on
mergers
and
acquisitions
13) Corporate structuring advice
The development activity through the country had exerted excess demand on the
sources of funds by the ever expanding industry and trade which could not be met
by the All India Financial Institutions. In these circumstances, the corporate sector
enterprises had the only alternative to avail themselves of the capital market
services for meeting the long-term fund requirements through capital issues of
equity and debentures. The growing demand for funds from capital market has
enthused many organizations to enter into the field of merchant banking for
managing the public issues.
The need of merchant banker is also felt in the wake of huge untapped public
savings as merchant bankers can play a highly significant role in mobilizing funds
4. Issue Management
5. Underwriting
6. Bankers
7. Portfolio Management
8. Venture Capital Financing
9. Leasing
10. Non-Resident Investment Counseling And Management
11. Acceptance Credit And Bill Discounting
12. Advising On Mergers, Amalgamations And Take-Over
13. Arranging Offshore Finance
14. Fixed Deposit Broking
15. Relief To Sick Industries
It covers the entire field of merchant banking activities i.e., project counseling,
capital restructuring, portfolio management and the full range of financial
engineering including venture capital, public issue management, loan syndication,
working capital, fixed deposits, lease financing, acceptance credit, etc. However,
the scope of corporate counseling is limited to suggestions and opinions leaving to
the client to take corrective actions for solving its corporate problems.
A merchant banker finds out the problems of enterprise, which shall include
organizational goals for the enterprise, size of the organization and operational
scales, choice of a product, pricing, etc, and suggests ways and means to solve
those problems.
Project Counseling
Project counseling is an important merchant banking service which includes
preparation of project reports, deciding upon the financing pattern to finance the
cost of the project, appraising the project report with the financial
institutions/banks.
Project reports are prepared to obtain government approval of the project, for
procuring financial assistance from financial institutions and banks, for ensuring
market for the proposed product, for planning public issues, etc.
Financing the project cost is an important aspect of project counseling. The two
sources of funds available to finance the project cost are internal sources of funds
(or owners' funds) which includes promoter's contribution and retained earnings;
and external sources of funds which refers to the borrowed funds in the form of
loans from banks, private investors and financial institutions and in the form of
debentures from the public.
Merchant banker has to decide the financing mix of the internal and external
sources of funds keeping in view the rules, regulations and norms prescribed by the
government or followed by the term lending financial institutions.
While rendering project counseling services, the merchant banker has to ensure
that the application forms for obtaining the funds from financial institutions are
filled in with relevant and appropriate information and before submitting the
application, the merchant banker has to appraise the project considering the various
aspects as to the type of the project, location, technical, commercial and financial
viability of the project.
Credit Syndication
Once the client company has decided about the project proposed to be undertaken,
the next step is looking for the sources wherefrom the funds could be procured to
implement the project.
Merchant banker has to locate the sources of funds and comply the formalities
required to procure the funds. This service rendered by the merchant banker in
arranging and procuring credit from financial institutions, banks and other lending
and investment organizations for financing the clients' project cost or meeting
working capital requirement is referred to as loan syndication or credit syndication.
Credit syndication in case of domestic borrowings is with the institutional lenders
and banks. Long and medium term funds are obtained from the All India Financial
Institutions like IFCI, IDBI etc., state level financial bodies like SFC, SIDC etc.,
commercial banks, mutual funds etc. Short-term funds are also required by the firm
for purchase of raw materials, payment of wages, salaries etc. Sources of financing
these short term requirements or working capital needs can be from internal
sources like internal accruals from working or operations and short term loans
from friends and relatives; or from external sources like short term borrowings
from banks etc.
Issue Management and Underwriting
Management of capital issues is a professional service rendered by the skilled and
experienced merchant bankers. Previously, the managing agents for a particular
corporate used to manage public issues. The abolition of the managing agency
system, the growth in the public limited companies in number and size, the
imposition of new rules and regulations regarding the public issue of securities
made it necessary for merchant bankers to play a definite role in the management
of public issues.
Public issue management involves marketing of corporate securities by offering the
securities to the public, procuring private subscription to the securities and offering
securities to existing shareholders of the company.
As a manager to the public issue, the merchant banker, before the public issue has
to obtain the consent of the stock exchanges to the memorandum and articles of
association, appoint other managers, bankers, underwriters, brokers etc. ,advice the
company to appoint auditors, solicitors and board of directors, draft the prospectus
and obtain consent from the companies legal advisors, board of directors and other
concerned parties, file the prospectus with registrar, make an application for
enlistment with stock exchanges and finally advertise for the issue.
A merchant bankers post issue activities include final allotment and/or refund of
subscription amount, calculation of underwriters liability in case of under
The function of a banker to the issue is to accept application forms from the
public together with subscription money and transfer them to the account of the
controlling branch.
Portfolio Management
Portfolio refers to investment in different types of marketable securities or
investment papers like shared, debentures and debenture stocks, bonds etc. from
different companies or institutions held by individuals firm or corporate units.
Portfolio management refers to managing efficiently the investment in the
securities held by professionals to others.
Merchant bankers take up management of a portfolio of securities on behalf of
their clients, providing special services with a view to ensure maximum return by
such investments with a minimum risk of loss of return on the money invested in
securities.
A merchant banker while performing the services of portfolio management has to
enquire of the investment needs of the client, the tax bracket, ability to bare risk,
liquidity requirements, etc. they should study the economic environment affecting
the capital market, study the securities market and identify blue chip companies in
which money can be invested. They should keep record of latest amendment in
government guidelines, stock exchange regulations, RBI regulations, etc.
Though merchant bankers world over specialize in acceptance credit and bill
discounting, these services are not currently provided by merchant bankers in India
the principal reasoning being the lack of an active market for commercial bills.
Arranging Offshore Finance
The merchant bankers also help their clients in the following areas involving
foreign currency financing:
1.
2.
3.
4.
2.
3.
4.
5.
2.
3.
Merchant bankers should not enter into any transactions on the basis of
unpublished information available to them in the course of their professional
assignment.
4.
Every merchant banker must submit himself to the inspection by SEBI when
required for and submit all the records.
5.
6.
All merchant bankers must abide by the code of conduct prescribed for
them.
7.
Every merchant banker who acts as lead manager must enter into an
agreement with the issuer setting out mutual rights, liabilities, obligations, relating
to such issues with particular reference to disclosures allotment, refund etc.
CODE OF CONDUCT
The merchant banker must observe high integrity and fairness in all his
dealings.
b)
He shall render at all times high standard of services, exercise due diligence,
exercise independent professional judgment.
c)
d)
e)
f)
He should always Endeavour to give the best possible advise and prompt
efficient and cost effective service.
g)
h)
CURRENT AFFAIRS
RBI allows cash withdrawal from merchant banker terminals
Besides ATMs, customers can now also withdraw cash up to Rs1000 from
terminals at different merchant establishments, the Reserve Bank. As a further step
towards enhancing the customer convenience in using the plastic money, it has
been decided to permit cash withdrawals at POS (point of sale) terminals. To start
with, this facility will be available for all debit cards issued in India, up to Rs1000
per day," RBI said in a statement issued here.
The use of debit cards at POS terminals at different merchant establishments has
been steadily increasing, it said. This facility is available only against debit cards
issued in India.
At present cash withdrawal facility using plastic cards is available only at
Automatic Teller Machines (ATMs) with the number of ATMs in the country at
44,857. There are 4,70, 237 POS terminals in the country.
This facility may be made available at any merchant establishment designated by
the bank and would be available whether the card holder makes a purchase or not.
Morgan Stanley makes i-banking comeback
The joint venture between JM Financial and Morgan Stanley was inked in 1997
and formalized in 1999. The JV had investment banking operations other than
equity broking, research, wealth management and advisory and securities
distribution operations. Post the split, JM Financial acquired the investment
banking company together with its subsidiaries, which were engaged in fixed
income, equity broking, wealth management, advisory and distribution businesses
of $ 20 million. The Indian partner sold its 49% holding in JM Morgan Stanley
Securities (JMSPL), the institutional equity broking company to Morgan Stanley
for $ 445 million.
Bulge bracket investment banking major, Morgan Stanley has re-entered
investment banking business on its own, after parting ways with JM Financial
its former Indian partner.
PNB aims profit of 7,500crore by 2013
The country's second largest public sector lender Punjab National Bank aims to
double
its
profit
to
Rs7,500
crore
in
the
next
four
years.
"The bank has set a target to expand total business to Rs10crore and earn net profit
of Rs7,500 crore by 2013," said PNB Chairman and Managing Director K C
Chakrabarty, who is charge of Deputy Governor of RBI.
The growth driver would be better asset liability management, thrust on recovery,
focus on customers and financial inclusion, he had said. Besides, the bank plans to
open new line of businesses in the current fiscal including merchant banking
subsidiary.
PNB Investment Services aims to provide investment consultancy and merchant
banking services
control.
This arrangement replaces the earlier practice of both I-Sec and ICICI Bank
working together on M&A deals. Since a predominant number of people, who
wish to be advised on M&A, also look for acquisition finance, it was decided that
the business should be housed in the bank, I-Sec MD Madhabi Puri Buch told ET.
Now, if a corporate is seeking a sell mandate or a buy mandate, where the transfer
of controlling interest takes place, the deal will be done by ICICI Bank.
ICICI Bank had initially entered the investment banking space in 2006. Over the
past couple of years, both the bank and its subsidiary have been vying for deals.
The new deal has taken into effect between both the entities from April 1.
Birla Capital and Financial Services gets SEBI merchant banking
license
Birla Capital & Financial Services Ltd has been granted a merchant-banking
license by the Securities and Exchange Board of India. The license will enable the
Nomura Financial Advisory and Securities (India) Private limited ('Nomura India'),
a wholly-owned subsidiary of Nomura Holdings, Inc. ('Nomura'), has launched its
equity sales and trading and investment banking operations in India.
In October 2008, Nomura, a global investment bank, acquired the majority of
Lehman Brothers' employees in India, including the equities sales and trading,
equity research, fixed income liquid markets sales and trading, and investment
banking teams.
By integrating the former Lehman Brothers India franchise and obtaining its
merchant banking licence and stock exchange memberships, Nomura India said in
a statement it has significantly expanded its capabilities in India through a wide
range of onshore financial solutions spanning securities brokerage
, securities
banks did
not
deal
with
the
general
public.
in
projects
involving
trade
of
one
form
or
another.
The current offering of investment banks and merchant banks varies by the
institution offering the services, but there are a few characteristics that
most companies that offer both investment and merchant banking share.
As a general rule, investment banks focus on initial public offerings (IPOs) and
large public and private share offerings. Merchant banks tend to operate on smallscale companies and offer creative equity financing, bridge financing, mezzanine
financing and a number of corporate credit products. While investment banks tend
to focus on larger companies, merchant banks offer their services to companies that
are too big for venture capital firms to serve properly, but are still too small to
make a compelling public share offering on a large exchange. In order to bridge the
gap between venture capital and a public offering, larger merchant banks tend to
privately place equity with other financial institutions, often taking on large
portions of ownership in companies that are believed to have strong growth
potential.
Merchant banks still offer trade financing products to their clients. Investment
banks rarely offer trade financing because most investment banking clients have
already outgrown the need for trade financing and the various credit products
linked to it.
Merchant banks
Commercial banks
5) Being advisors, they are closer to the Being lenders, they are more
customers and get to know risks of the cautions, assess risks in lending
transaction s properly. They work on risks proposal and cannot afford to be
shields i.e. mitigation measures
banks
majority
CASE STUDIES
Our Mission - To provide Credible, Professional and Customer Focused worldclass investment banking services.
SBI Group:
Subsidiary:
Associates Bank:-
State Bank of
Bikaner &
Jaipur
State Bank of
Saurashtra
SBI Factors
& Comm.
Services Ltd.
SBI
(California)
State Bank of
Hyderabad
State Bank of
Travancore
SBI Funds
Management
(P) Ltd.
SBI
International
(Mauritius)
Ltd.
State Bank of
Indore
SBI Capital
Markets Ltd.
SBI DFHI
Ltd.
IndoNigerian
Merchant
Bank
State Bank of
Mysore
SBICI Bank
Ltd.
SBI Life
Nepal SBI
Insurance Co. Bank Limited
Ltd
Commercial
Bank of India
LLC
Committee of
Directors
Audit
Committee
Management Team
Shri O. P. Bhatt
(Chairman)
Shri R. Sridharan
(Chairman)
Dr. R. H. Patil
Dr. R. H. Patil
Shri D.
Sundaram
(Chairman)
Shri R.
Sridharan
Shri S.
Vishvanathan
(MD & CEO )
Shri M. K. Nag
(Executive Vice
President)
Shri R. Sridharan
Shri S. Vishvanathan
(MD & CEO)
Dr R. H. Patil
Promoters Share: -
Performance:-
Awards: Asia Pacific Bank of the Year Award 2009 for Leadership in Project Finance
by Thomson Reuters (PFI)
India Loan House 2009 for Leadership in Loan Syndication by Thomson
Reuters (IFR Asia)
Asia Pacific Oil and Gas Deal of the Year 2009 for Cairn India by Thomson
Reuters (PFI)
African Power Deal of the Year 2009 for Morupule B by Thomson Reuters
(PFI)
Indian Power Deal of the Year 2009 for Sasan by Euromoney
Indian Upstream Oil & Gas Deal of the Year 2009 for Cairn India by
Euromoney
Indian Road Deal of the year 2009 for Yamuna expressway by Euromoney
Indian Telecom Deal of the Year 2009 for Aircel by Euromoney
SAFA Best Presented Accounts Award 2008
Award for Excellence in Financial Reporting
SERVICES:-
Project Appraisal
Structured Finance and Syndication
Infrastructure Project Advisory
Securitization
Debt & Equity Syndication
Capital Markets
Capital Markets Group handles transactions in the capital markets space across
multiple instrument structures.
Employees:41,871
Employee growth: 37.2%
You see, ICICI Bank is India's #2 bank (after State Bank of India), with more than
600 branches and 2,200 ATMs nationwide. ICICI's retail banking group offers
lending and deposit services to small businesses and individuals. Larger businesses
are served by the corporate banking group, which offers finance services and
treasury products. ICICI's rural and government banking unit offers micro-loans
and agricultural banking. Foreign operations, as well as services related to
international trade finance and expatriate Indians, fall under the international
banking group. Other ICICI offerings include online banking, asset management,
and insurance.
Key numbers for fiscal year ending March, 2008:
Sale: $5,796.3M
One year growth: 99.1%
ICICI Securities Ltd is the largest equity house in the country providing end-to-end
solutions (including web-based services) through the largest non-banking
distribution channel so as to fulfil all the diverse needs of retail and corporate
customers. ICICI Securities (I-Sec) has a dominant position in its core segments of
its operations - Corporate Finance including Equity Capital Markets Advisory
Services, Institutional Equities, Retail and Financial Product Distribution.
ICICI Securities Inc., the step-down wholly owned US subsidiary of the company
is a member of the National Association of Securities Dealers, Inc. (NASD). As a
result of this membership, ICICI Securities Inc. can engage in permitted activities
in the U.S. securities markets. These activities include Dealing in Securities and
Corporate Advisory Services in the United States and providing research and
investment advice to US investors.
is a SEBI Registered CAT-1 Merchant banker. ICICI Securities Inc. is also
registered with the Financial Services Authority, UK (FSA) and the Monetary
Authority of Singapore (MAS).
Board of Directors:-
Mr. A Murugappan
Mr. A Murugappan
Institutional
ICICI Securities is awarded as the Best Investment Bank 2008 by Global
Finance Magazine
The Corporate Finance group also was awarded a runner-up Best Merchant
Banker by Outlook Money in 2007.
ICICI Securities (I-Sec) topped the Prime Database League Tables 2007 for
money raised through IPOs/FPOs.
The equities team was adjudged the 'Best Indian Brokerage House-2003' by
Asiamoney.
Retail
ICICIdirect wins the prestigious Outlook Money - India's Best e-Brokerage
House for 2009.
ICICIdirect, the neighborhood financial superstore won the prestigious
Franchise India `Service Retailer of the Year 2008 award.
ICICIdirect wins the prestigious Outlook Money - India's Best e-Brokerage
House for 2008.
ICICIdirect been winning the prestigious Outlook Money - India's Best eBrokerage House for 2003-2004, 2004-2005, 2006-2007 and 2007-2008.
ICICIdirect has also won the CNBC AWAAZ Consumer Award for the Most
Preferred Brand of Financial Advisory Services.
Best Broker - Web 18 Genius of the Web Awards 2007
Franchisor of the year award 2009
Retail concept of the year awards 2009
Technology
IDG India's CIO magazine has recognized ICICI Securities as a recipient of
2009 CIO 100 award
Indian Bank's Association Business Technology Awards for Best Online
Trading Platform in 2006 and 2007
Punjab National Bank (PNB) is one of India's largest nationalized banks with some
4,500 branches or service counters. The financial institution offers services in
personal and corporate banking, including industrial, agricultural, and export
finance, as well as international banking. Its personal lending services include
loans for housing, autos, and education. PNB's diverse client list includes Indian
conglomerates, small and mid-sized businesses, non-resident Indians, and
multinational companies. The bank was established in Lahore in 1895 -- before the
country was partitioned into India and Pakistan in 1947.
Key numbers for fiscal year ending 2008:
Sale: $2,315.0M
Net income: $322.1M
PNB's Financial Numbers
Sales $2.32 bil
Union Bank of India has been around for more than 88 years. The bank has earned
a reputation for being techno-savvy--more than 600 branches of Bank are
networked and powered with a centralized technology platform, the bank also
manages close to 395 networked ATMs.
Union Bank is a Public Sector Unit with 55.43% Share Capital held by the
Government of India. The Bank came out with its Initial Public Offer (IPO) in
August 20, 2002 and Follow on Public Offer in February 2006. Presently 44.57 %
of Share Capital is presently held by Institutions, Individuals and Others.
Financial performance (as on 31st March 10)
The Banks Net Worth increased by 25.76% and stood at Rs. 8758 crore as
on 31st March 10 as compared to Rs.6964 crore in the previous year.
Net Profit Increased by 27.47% and stood at 594 crore as on 31st March 10
as compared to
466 crore crore in the previous year.
Gross NPA level increased to Rs.2671 crore as on 31st March10 from
Rs.1923 crore as on 31stMarch09.
Board of Directors
Personal Banking (Accounts & Deposits, Retail Loans, Cards, Insurance &
Investment, Demat )
NRI Banking(Remittance, Savings & Deposits, Loan & Services,
Payments)
Corporate Banking(CMS, E-Tax, Insurance, Trade Finance, loans
Syndication, MSME Banking)
Internet Banking(Account Information, Transfer of
Funds/Bills/Limits/Currency. Financial & Non Financial enquiries)
Awards:
The Bank was awarded the Gold Trophy and a certificate in the Elite Class
for Excellence in Marketing & Brand Communication by Association of
Business Communicators of India (ABCI) in March 2010. The award was
given away by the Honble Governor of Maharastra, Shri K.Sankaranarayan.
The Bank was awarded the prestigious Skoch Challenger Award 2009 for
excellence in capacity building through innovative concept of Village
Knowledge Centre as part of financial inclusion initiatives. The award was
given away by Dr. C Rangarajan, Economic advisor to the Prime Minister
As part of its global expansion initiatives, the Bank opened its 5th overseas
representative office in London, U.K. in April 2010. The Bank already has 4
representative Offices in Shanghai, Beijing in PRC, Abu Dhabi in UAE and
Sydney, Australia. Besides the Bank has a full fledged overseas branch in
Hong Kong. The Bank is the process of setting up a Rep Office in Toronto,
Canada.
Senior Management:
Mr. Shivaji Dam (managing director of Kotak Mahindra Old Mutual Life
Insurance Limited)
Mr. C. Jayaram ( Executive Director)
Mr. Dipak Gupta ( Executive Director)
Mr. Cyril Shroff (managing partner of the law firm)
Kotak Securities
Kotak Securities Ltd. 100 % subsidiary of Kotak Mahindra Bank is one of the
oldest and largest broking firms in the Industry. A subsidiary of Kotak Mahindra
bank. Reconstruction from a private company to a public limited company
effective from June 13, 2003. Act as a lead manager to several (IPOs) & help in
Client in accessing the public & private equity market.
It is also a depository participant with National Securities Depository Limited
(NSDL) and Central Depository Services Limited (CDSL).
Kotak Securities Limited has Rs. 2300 crore of Assets Under Management (AUM)
as of 31st March, 2010.
Large Presence: At present Kotak in 331 cities with 843 offices all over the
country.
Services :
Accolades:
IDBI Capital Market Services Ltd., (IDBI Capital) is a wholly owned subsidiary of
IDBI Bank Ltd and is a leading Investment Banking & Securities Company.
IDBI Capital offers a full suite of products and services to Corporates, Institutional
and Individual clients. The range of services include :-
Investment Banking
Capital Market Products
Private Equity
Corporate Advisory Services
Mergers & Acquisitions
Project Appraisals & Debt Syndication
Stock Broking - Institutional & Retail
Distribution of Financial Products
Debt Placement and Underwriting
Fund Management (Managing Clients' Assets-Pension/PF Fund Managers)
Research Group
IDBI Capital is highly regarded for safety and trust and enjoys a credit rating of
AAA by CARE for its medium-term borrowings and P1+ by ICRA for its shortterm borrowing
Milestones
1995 March
1995 July
1996
December
1996
1998 April
1999
February
1999
November
2002 March
2000 June
2004 June
2006
September
2006
September
2007 March
2007 May
2008 January IDBI Capital bags CNBC TV18's prestigious National Financial
Advisor Award
2008 March
Fund Management
IDBI Capital Market Services Ltd. (ICMS) is a leading Fund Manager in the
country for Provident, Pension and Retirement Benefit Funds. The Company is a
SEBI registered Portfolio Manager and manage its Clients assets under both
discretionary and non-discretionary mandates. These services are provided to
various public and private sector undertakings and their provident, pension,
retirement benefit and surplus funds. The Companys client base includes leading
pension and provident funds in the country.
IDBI capital has been advising institutions, banks and corporates for their
investment in Debt, Mutual Funds and Equities over several years. Its services
include managing Client Assets--Pension & Provident Funds, Surplus fund
Management, Equity Portfolio Management and Mutual Fund Advisory.
The funds have continuously yielded superior returns, which are significantly
higher than the benchmark.
Regulatory Approval
IDBI Capital is a registered Portfolio Manager with Securities and Exchange Board
of India (SEBI) since 1998 and is authorised to undertake Funds Management
activities (Debt & Equity) for clients. These activities would be governed by
Securities and Exchange Board of India (Portfolio Managers) Rules and
Regulations, 1993. SEBI Regisration No. of IDBI Capital is INP000000209, valid
till the year 2010.
Services:
Take Financial
Service
Nos.
Percentage
Yes
12
40
No
18
60
Total
30
100
GRAPH
No
40%
60%
Interpretation
Out of total respondents, 40% respondents have taken Financial Service and rest
60% respondents have not taken the Financial Services.
Know about
Merchant
Nos.
Percentage
Yes
10
33.33
No
20
66.67
Total
30
100
No
33%
67%
Interpretation:
Out of total respondents, 33% respondents Know about merchant banking and rest
67% respondents dont know about merchant banking.
Satisfied
Nos.
Percentage
Yes
13
43.75
No
17
56.25
Total
30
100
Interpretation:
Out of total respondents, 43.75% respondents are satisfied and rest 60%
respondents are not satisfied.
Sr. No
Bank
Percentage
ICICI
20
SBI
35
PNB
20
BOI
15
Other
10
Interpretation:
Large number prefers services from SBI.
Sr. No.
Position
Percentage
Good
50
Normal
35
Bad
15
Total
100
Interpretation:
Out of total respondents, 50% respondents Say Good, 35% Say Normal and rest
15% respondents say Bad.
Q 6 What is the position of Merchant Banking in Public Sector?
Sr. No.
Position
Percentage
Good
40
Normal
55
Bad
Total
100
Interpretation:
Out of total respondents, 40% respondents Say Good, 55% Say Normal and rest
5% respondents say bad.
Q7 What type of security have you deposited/you will deposit with the banks?
Sr. No.
Type of Security
Nos.
Percentage
1.
22.5
2.
Gold
3.
Land Papers
19
62.5
4.
15
Total:
30
100
50
45
40
35
30
25
bank sec.
gold
land paper
third person
20
15
10
5
0
bank sec.
gold
land paper
third person
Interpretation:
Out of total respondents, a large number have deposited/will deposit land papers.
Sr. No.
Percentage
Margin
1.
Yes
24
80
2.
No
20
Total:
30
100
70
60
50
40
Yes
No
30
20
10
0
Yes
No
Interpret
ation
Out of total respondents, 80% respondents are satisfied and rest 20% respondents
are not satisfied.
Sr.
No.
Depends on M.B
Nos.
Percentage
Yes
21
75
No
25
Total
30
100
Depends on M.B
75
1 Yes
2 No
1 Yes
25
2 No
Nos.
Interpretation
Out of total respondents, 75% respondents Say that they are timely heard and rest
25% say that they are not timely served by merchant banking.
Sr.
No.
Difference
Nos.
Percentage
Yes
23
75
No
25
Total
30
100
100 Y
e
50 s
0 N
Yes
No
o
Interpretation
Out of total respondents, 75% respondents think that it differs and rest 25%
respondents dont think so.
COMPARISION BETWEEN
Public sector merchant banking companies facing stiff competition from the
private sector companies.
Market Share
Public Sector= 66%
Private Sector= 34%
70%
60%
50%
40%
30%
20%
10%
0%
Series1
CONCLUSION
The merchant banker plays a vital role in channelizing the financial surplus of the
society into productive investment avenues. Hence before selecting a merchant
banker, one must decide, the services for which he is being approached. Selecting
the right intermediary who has the necessary skills to meet the requirements of the
client will ensure success.
It can be said that this project helped me to understand every details about
Merchant Banking and in future how its going to get emerged in the Indian
economy. Hence, Merchant Banking can be considered as essential financial body
in Indian financial system.
Market development is predicted on a sound, fair and transparent regulatory
framework. To sustain the growth of the market and crystallize the growing
awareness and interest into a committed, discerning and growing awareness and
interest into an essential to remove the trading malpractice and structural
inadequacies prevailing in the market, and provide the investors an organized, well
regulated market.
BIBLIOGRAPHY
Reference Material
Financial Institutions & Market By Shashi K. Gupta, Nisha Aggarwal
Merchant Banking H.R. Machiraju
The Rise of Merchant Banking Stanley Chapman
Questionnaire
Respondents Profile
Name
: _______________
Age
: _______________
Gender
: _______________
Occupation : _______________
1. Do you take any financial services from bank?
(a) Yes
(b) No
(b) No
( )
(a) Yes
(b) No
(a) ICICI
(c) PNB
(b) SBI
(d) BOI
( )
(e) OTHER
(specify)
(c) Bad
(b) Normal
( )
(c) Bad
(b) Normal
( )
7. What type of security have you deposited/you will deposit with the banks
(a)Bank security
( )
(b) Gold
( )
(a) Yes
(b) No
( )
(a) Yes
( )
(b) No
( )
(b) No
APPENDIX
List of All Merchant Bankers Registered with SEBI
ANDHRA BANK
ANTIQUE CAPITAL MARKETS PVT. LTD.
ARIHANT CAPITAL MARKETS LTD
ARYAMAN FINANCIAL SERVICES LIMITED
ASHIKA CAPITAL LTD
ASIT C. MEHTA INVESTMENT INTERRMEDIATES LTD
ATHERSTONE CAPITAL MARKETS LTD
AVENDUS CAPITAL PVT. LTD.
BNP PARIBAS
BOB CAPITAL MARKETS LTD
BRICS SECURITIES LTD
CALYON BANK (FORMERLY CREDIT AGRICOLE INDOSUEZ)
CENTRUM CAPITAL LIMITED (FORMERLY CENTRUM FINANCE LTD)
COMFORT SECURITIES PVT LTD
CORPORATE PROFESSIONALS CAPITAL PVT. LTD.
CORPORATE STRATEGIC ALLIANZ PVT LTD
D & A FINANCIAL SERVICES PVT. LTD.
DAIWA SECURITIES SMBC INDIA PVT LTD
CREDIT SUISSE SECURITIES (INDIA) PVT LTD
DALMIA SECURITIES PVT. LTD.
DARASHAW & COMPANY PRIVATE LTD (FORMERLY BADAR FINANC
DBS BANK LTD
EDELWEISS CAPITAL LTD
ELARA CAPITAL (INDIA) PRIVATE LIMITED
EMKAY SHARE AND STOCK BROKERS LTD
EQUIRUS CAPITAL (P) LTD
ESCORTS SECURITIES LTD
FIRSTCALL INDIA EQUITY ADVISORS PVT. LTD.
FORTRESS CAPITAL MANAGEMENT SERVICES PVT LTD
FORTUNE FINANCIAL SERVICES (INDIA) LTD
GSFS CAPITAL & SECURITIES LTD
HDFC BANK LTD
IDBI BANK LTD.(FORMERLY INDUSTRIAL DEVELOPMENT BANK OF INDIA)
IDBI CAPITAL MARKET SERVICES LTD
IDFC-SSKI LTD.
IMPERIAL CORPORATE FINANCE & SERVICES PVT LTD
IND GLOBAL CORPORATE FINANCE PVT LTD
INDIA CAPITAL MARKETS PRIVATE LIMITED
INDIA INFOLINE LTD.(FORMERLY INDIA INFOLINE SECURITIES PVT LTD)
INDIABULLS SECURITIES LIMITED (FORMERLY ORBIS SEC LTD)
INDUSIND BANK LTD
INFRASTRUCTURE DEVELOPMENT FINANCE COMPA
ING VYSYA BANK LTD. (ERSTWHILE THE VYSYA BANK LTD.)
INTEGRATED ENTERPRISES (INDIA) LTD (INTEGRATED ADVISORY SERV
INTENSIVE FISCAL SERVICES PVT LTD