merchant banking revised jan 19th
Transcript of merchant banking revised jan 19th
Presented by Rajesh Mandalik
Kumar GauravPranay Kargaonkar
Abdul Qadir SaifyPavan 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
Export Financing for capital goods
Hire purchasing
Equipment leasing
Pre-investment Studies
Valuation of assets
Financial management
7
Contd....
Private Investment Bankers
Lehman BrothersMerrill Lynch etc.
Bought loans that fall outside the specs of agencies.
Merchant Banking Services
->Management of Public Offers of Equity and debt
Instruments.
->Rights issues.
->Buyback Offers.Etc.
Advisory and transaction Services in
->Project Financing.
->Syndicated loans.
->Private Equity/Venture Capital.
->Business Advisory. Etc.
Non-fund Based
Core Business Portfolio
Core Business Portfolio
Fund Base
->Underwriting.->Market making.
->Bought Out Deals.->Trading in Equities, bonds
and derivatives.
Allied Businesses
->Asset Management services.--Mutual Funds.
--Portfolio Management--Venture capital etc.
->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.
India's premier Investment Bank .A subsidiary of Kotak Mahindra Bank Ltd.Reconstitution from a private company to a public
limited company effective from June 13, 2003. Acts as the lead manager to several (IPO's) and helps
its clients in accessing the public and private equity markets.
KIB provides high quality financial advisory services, encompassing the following business areas of operations:
Mergers & Acquisitions Advisory. Raising capital from Equity and Debt Capital Markets. Raising capital from Financial Sponsors. Infrastructure Financing Advisory. Structured Finance Advisory.
Brief Outline
India's premier Investment Bank .A subsidiary of Kotak Mahindra Bank Ltd.Reconstitution from a private company to a public limited company effective from June 13, 2003. Acts as the lead manager to several (IPO's) and helps its clients in accessing the public and private equity markets.
KIB provides high quality financial advisory services, encompassing the following business areas of operations: Mergers & Acquisitions Advisory. Raising capital from Equity and Debt Capital Markets. Raising capital from Financial Sponsors. Infrastructure 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.
ICICIICICI Securities is a SEBI registered
Category I Merchant Banker and a pioneer of numerous innovative practices in Indian Investment banking space.
Merchant banking
Corporate finance
Equity capital market
Advisory services
ICICI SECURITIES LTD.
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 AQUISTIONSICICI 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
Private equity
financing
Secondary sale
transactions
Pre IPO deals
ICICI advice on a wide variety of products
JM Morgan StanleyEstablished in 1935Morgan 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 India.
Services by STANLEY:-
Brokerage SolutionsAdvisory SolutionsLife Cycle SolutionsProvides customized servicesLast 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 planningBusiness and Strategic Planning. Business Restructuring .Entry Strategy .Policy Advisory. Organisation Restructuring .Bid Process Management .Process Consulting .
Financial planningBusiness Valuation .Financial & Commercial Due Diligence .Merchant Financial Appraisal .Joint Venture & Contract .Bid Process Management .Disinvestments .Infrastructure Advisory .Financial / Debt Restructuring .Structured Finance & Securitisation .
CCP - 504 (B). 81 35
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 36
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
Quiz
CCP - 504 (B). 81 37
3. Which commission stressed the need for merchant banking activity in India?
a) Banking Commission b) RBI committee c) Chore Committee d) None
Quiz