What is a merchant bank?
A merchant banking firm is a financial organisation that provides you with an amalgamation of banking and financial consultancy services. Not only does a merchant bank help you arrange your loans, but it also offers you appropriate guidance as to how to plan and invest your finances.
Overview of a merchant banking firm.
As per the definition given by the Ministry of Finance, a merchant banker is a person who is involved in the business of issue management, i.e. either by making arrangements for selling, buying or accepting the securities as a manager, consultant or advisor.
In India, merchant Banking firms were first introduced in the year 1967 by the Grindlays bank. Currently, there are more than 200 SEBI registered merchant banks in India.
Services of merchant banking firms.
Obtaining merchant banking services for your business can reap innumerable benefits for your business. Here is a list of services offered by them.
Project Counselling: Starting from the initial phase, i.e. preparing an application to obtaining sponsors, the project is managed by a team of specialists from a merchant banking firm.
Issue Management - Another service offered by merchant banks in marketing corporate securities such as corporate shares or bonds by giving them to the public. In addition to this, the pricing is also decided by Merchant bankers.
Underwriting of the public issue: In this, an underwriter guarantees that in case an under subscription occurs, all the liabilities would be borne by him.
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