Role of merchant banking in india
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A merchant bank provides capital to companies through equity ownership rather than loans. They also provide advisory services on corporate matters. In the UK, merchant bank refers to an investment bank. According to the FDIC, merchant banking involves negotiated private equity investments by financial institutions in unregistered securities of private or public companies. Merchant banking activities include management of public issues like IPOs, payment of dividends, underwriting, and acting as a monitoring agency.
Role of merchant banking in india
- 2. A MERCHANT BANK IS A FINANCIAL INSTITUTION WHICH PROVIDE CAPITAL TO COMPANIES IN THE FORM OF SHARE OWNERSHIP INSTEAD OF LOANS. A MERCHANT BANK ALSO PROVIDE ADVISORY ON CORPORATE MATTERS TO THE FIRMS THEY LEND TO. IN THE UNITED KINGDOM ,THE TERM MERCHANT BANK REFERS TO AN INVESTMENT BANKS
- 3. ACCORDING TO THE U.S. FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE TERM MERCHANT BANKING IS GENERALLY UNDERSTOOD TO MEAN NEGOTIATED PRIVATE EQUITY INVESTMENT BY FINANCIAL INSTITUTIONS IN THE UNREGISTERD SECURITIES OF EITHER PRIVATELY OR PUBLICALLY HELD COMPANIES.
- 4. MERCHANT BANKING ACTIVITIES ISSUE MANAGEMENT MANAGEMENT OF PUBLIC ISSUE i.e. IPOs , FPOs , RIGHT ISSUE etc. BANKERS TO THE ISSUE PAYMENT OF DIVIVEND DEBENTURES TRUSTEE UNDERWRITING MONITERING AGENCY
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