Functions of Merchant Bankers:
The basic function of merchant banker or investment banker is marketing of corporate and other securities. In the process, he performs a number of services concerning various aspects of marketing, viz., origination, underwriting, and distribution, of securities. During the regime of erstwhile Controller of Capital Issues in India, when new issues were priced at a significant discount to their market prices, the merchant banker’s job was limited to ensuring press coverage and dispatching subscripttion forms to every corner of the country. Now, merchant bankers are designing innovative instruments and perform a number of other services both for the issuing companies as well as the investors. The activities or services performed by merchant bankers, in India, today include:
1. Project promotion services.
2. Project finance.
3. Management and marketing of new issues.
4. Underwriting of new issues.
5. Syndication of credit.
6. Leasing services.
7. Corporate advisory services.
8. Providing venture capital.
9. Operating mutual funds and off shore funds.
10. Investment management or portfolio management services.
11. Bought out deals.
12. Providing assistance for technical and financial collaborations and joint ventures.
13. Management of and dealing in commercial paper.
14. Investment services for non-resident Indians.
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