Merchant Banking
1.Q: Explain the functions of Merchant Banking.
Functions
Merchant banking is a service oriented industry. Merchant banks all over the world carry out the same set of services. Merchant banks in India carry out the following functions and services specifically.
1. Corporate Counseling
2. Project counseling
3. Pre-investment Studies
4. Capital restructuring
5. Credit Syndication
6. Issue Management and underwriting
7. Portfolio Management
8. Working Capital Finance
9. Acceptance Credit and Bill discounting
10. Mergers, Amalgamations and Takeovers
11. Venture Capital
12. Lease Financing
13. Foreign Currency Finance
14. Fixed Deposit Broking
15. Mutual funds
16. Relief to Sick Industries
17. Project Appraisal
Each of these functions is detailed briefly below.
Corporate Counseling
The set of activities that is undertaken to ensure the efficient running of a corporate enterprise is known as corporate counseling. It may include the rejuvenating of old line companies and ailing units, and guiding the existing units in identifying the areas or activities for growth and diversification. The merchant banker guides the clients on various aspects like Locational factors, organizational size, operational scale, choice of product, market survey, cost analysis, cost reduction, allocation of resources, investment decision, capital management and expenditure contro, pricing, etc. Following are the activities which form part of corporate counseling:
1. Providing guidance in areas of diversification based on the Government’s economic and licensing policies.
2. Undertaking appraisal of product lines, analyzing their growth and profitability and forecasting future trends.
3. Rejuvenating old-line companies and ailing sick and units by appraising their technology and process assessing their requirements and restructuring their capital based.
4. Commissioning of diagnostic studies.
5. Assessment of the revival prospects and planning for rehabilitation through modernization and
Functions
Merchant banking is a service oriented industry. Merchant banks all over the world carry out the same set of services. Merchant banks in India carry out the following functions and services specifically.
1. Corporate Counseling
2. Project counseling
3. Pre-investment Studies
4. Capital restructuring
5. Credit Syndication
6. Issue Management and underwriting
7. Portfolio Management
8. Working Capital Finance
9. Acceptance Credit and Bill discounting
10. Mergers, Amalgamations and Takeovers
11. Venture Capital
12. Lease Financing
13. Foreign Currency Finance
14. Fixed Deposit Broking
15. Mutual funds
16. Relief to Sick Industries
17. Project Appraisal
Each of these functions is detailed briefly below.
Corporate Counseling
The set of activities that is undertaken to ensure the efficient running of a corporate enterprise is known as corporate counseling. It may include the rejuvenating of old line companies and ailing units, and guiding the existing units in identifying the areas or activities for growth and diversification. The merchant banker guides the clients on various aspects like Locational factors, organizational size, operational scale, choice of product, market survey, cost analysis, cost reduction, allocation of resources, investment decision, capital management and expenditure contro, pricing, etc. Following are the activities which form part of corporate counseling:
1. Providing guidance in areas of diversification based on the Government’s economic and licensing policies.
2. Undertaking appraisal of product lines, analyzing their growth and profitability and forecasting future trends.
3. Rejuvenating old-line companies and ailing sick and units by appraising their technology and process assessing their requirements and restructuring their capital based.
4. Commissioning of diagnostic studies.
5. Assessment of the revival prospects and planning for rehabilitation through modernization and