Presented by

Rajesh Mandalik
Kumar Gaurav
Pranay Kargaonkar
Abdul Qadir Saify
Pavan Kumar Reddy
Mukesh Sahu
 Merchant Banking
The Dictionary of Banking and Finance defines a
merchant bank as “ a bank which arranges loans to
companies, deals in international finance, buys and
sells shares and launches new companies on the stock
exchange, but does not provide normal banking
services to the general public ”.
Bird’s eye view of Merchant Banking :

Merchant Banking is a fee-based service.

It arranges funds rather than providing them.
Originally Merchant Banking business was
started in Italy and France.
Later on, it came into existence in the U.K., and
the U.S.A.
In India, it has become popular from 1983-84.
Merchant Banking In
India
 The Grindlays Bank initiated the merchant
banning activity in Indian Capital Market in
1969.

 It’s business forms was on the management of

Public Issues and Financial Consultancy.

 City Bank introduced its merchant banking

division in 1970.
Functions of Merchant Banking

 Corporate Counseling

 Portfolio Management

 Venture Capital Financing

 Mergers and Amalgamations

 Project Counseling

 Underwriting

6
Functions of Merchant Banking
Contd....

 Export Financing for capital goods

 Hire purchasing

 Equipment leasing

 Pre-investment Studies

 Valuation of assets

 Financial management

7
 Private Investment Bankers

Lehman Brothers
Merrill Lynch etc.

Bought loans that fall outside the specs of agencies.

 Core Business Portfolio

Non-fund
Based

Merchant Banking
Services Advisory and transaction
Services in
->Management of Public
Offers of Equity and debt ->Project Financing.
Instruments.
->Syndicated loans.
->Rights issues.
->Private Equity/Venture
->Buyback Offers. Capital.
Etc.
->Business Advisory. Etc.
 Core Business Portfolio

Fund Base Allied Businesses

->Asset Management services.

->Underwriting. --Mutual Funds.
->Market making. --Portfolio Management
->Bought Out Deals. --Venture capital etc.
->Trading in Equities, bonds and
derivatives. ->Secondary Market Services.
--Brooking
--Equity Research.
. Securities and Exchange Board of India (SEBI)
has divided merchant bankers into four categories,
which are as follows: -
SBI Capital Markets
Ltd.

Kotak Mahindra
Capital Company.

JM Morgan Stanley
Ltd.

DSP Merrill Lynch

Ltd.

ICICI Securities Ltd.

IDBI Capital Markets

Ltd..

Enam Financial
Consultants Ltd.
Kotak Mahindra Capital Company
Ltd.
Objective
Offers a wide suite of capital market and
advisory solutions to clients covering
leading domestic and multinational
corporations, banks, financial institutions
and government companies across major
industry sectors.
 Brief Outline
India's premier Investment Bank .
A subsidiary of Kotak
India's premier Mahindra
Investment BankBank
. Ltd.
A subsidiary from
Reconstitution of Kotak
a Mahindracompany
private Bank Ltd. to a public
Reconstitution from a private company to a
limited company
public effective
limited company from June
effective 13, 2003.
from June 13,
Acts 2003.
as the lead manager to several (IPO's) and
helpsActs
its as the lead
clients in manager
accessingto several
the (IPO's)
public
helps its clients in accessing the public and
and
and
private equity
private markets.
equity markets.
KIB provides high quality financial advisory
 KIB provides high quality financial advisory services,
services, encompassing the following business
encompassing the following business areas of
areas of operations:
operations:Mergers & Acquisitions Advisory.
Mergers Raising capital from
& Acquisitions Equity and Debt Capital
Advisory.
Markets.
RaisingRaising
capitalcapital
from Equity and Debt
from Financial Capital Markets.
Sponsors.
RaisingInfrastructure
capital from Financing
FinancialAdvisory.
Sponsors.
Structured
Infrastructure Finance Advisory.
Financing Advisory.
Structured Finance Advisory.
Awards

Best Investment Bank in

India by Finance Asia for
2008, 2007 and 2006.
The Best Equity House in
India by Asia money in
2008.
 ICICI
ICICI Securities is a SEBI registered Category I
Merchant Banker and a pioneer of numerous
innovative practices in Indian Investment
banking space.
 ICICI SECURITIES
LTD.

Merchant
banking

Corporat
e finance

Equity
Advisory
capital
services
market
Equity Capital Market practice
comprises:-
 IPO
 Rights
 Convertible Offerings
 Qualified Institutional Placement (QIP)
 Private Placement
 International offerings.
Advisory services comprises:-
 Mergers and Acquisitions (M&A)
 Private Equity
 Infrastructure Advisory
 Corporate Restructuring
 Joint Ventures.
 MERGERS AND
AQUISTIONS
ICICI Securities was amongst the first Indian
investment banks to form a dedicated M&A
practice and continues to be a leader by
providing innovative and customised solutions
to achieve the varied objectives of clients.
 Private equity
 ICICI help companies to raise capital during the
seed, growth and expansion phases as
well as acquisition financing, structuring the deal
to maximize value for all its stakeholders.
industry knowledge across multiple sectors, wide-
ranging deal structuring capabilities and thorough
grasp of the regulatory environment make us the
'banker of choice', for companies and private
equity funds alike.
It has offered superior services across-the-
spectrum corporate finance activities in
sectors as diverse as:-

 IT
 Media
 Telecom
 Pharma
 Banking
 Infrastructure
 ICICI advice on a wide variety of
products

Secondary
Private
sale Pre IPO
equity
transactio deals
financing
ns
JM Morgan Stanley
Established in 1935
Morgan Stanley operated two joint ventures with
JM Financial Group, under the name of JM Morgan
Stanley.
Global offices are in Americas, Asia pacific,
Europe, Africa

In India its branches are in Mumbai and west

 Services by
STANLEY:-

Brokerage Solutions
Advisory Solutions
Life Cycle Solutions
Provides customized services
Last September it offers private wealth
management services
 some of the investments products are stocks,
bonds, mutual funds, insurance, annuities etc.
JM Morgan Stanley Investment Banking
Industry Coverage
Basic Materials ,consumer products, communications,
energy, financial institution, financial sponsors, healthcare,
real estate, retail, technology, transportation
IDBI project advisory services
broadly includes:
Overview of the promoting company .
Review of the Project Structure and Project
Costs including various assumptions. 
Capital Structuring .
Real Estate Advisory.
Identification and evaluation of various
sources of finance .
Financial modelling .
Risk Analysis and Allocation .
Development of a Security Package .
Strategic planning
Business and Strategic Planning.
Business Restructuring .
Entry Strategy .
Policy Advisory.
Organisation Restructuring .
Bid Process Management .
Process Consulting .
Financial planning
Business Valuation .
Financial & Commercial Due Diligence .
Merchant Financial Appraisal .
Joint Venture & Contract .
Bid Process Management .
Disinvestments .
Infrastructure Advisory .
Financial / Debt Restructuring .
Structured Finance & Securitisation .
Quiz

1. Which bank has initiated merchant banking

activity in India.
A) ICICI Bank
B) Grindlays Bank
C) Canara Bank
D) None

CCP - 504 (B). 81 35

Quiz

2. Which is the first Indian Bank to start its

merchant banking activity in India?

A) State Bank of India

B) Hongkong Bank

C) Bank of India

D) Canara bank

CCP - 504 (B). 81 36

Quiz

3. Which commission stressed the need for

merchant banking activity in India?

a) Banking Commission
b) RBI committee
c) Chore Committee
d) None

CCP - 504 (B). 81 37