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A Project Report On
Submitted to the
S.R.M. SCHOOL OF MANAGEMENT
In partial fulfilment of the requirements in the award of the
Degree of Master of Business Administration
By
SONIA JACOB
Reg. No: 3511210455
Under the Guidance of
Mr. AP.Karthik Kumaran
Asst. PROFESSOR
SRM SCHOOL OF MANAGEMENT
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CERTIFICATE
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CERTIFICATE
This is to certify that the project report entitled A STUDY ON THE
Signature Of Student
Place:
Date
External Examiner
Date:
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DECLARATION
I Sonia Jacob, Reg. No: 3511210455, hereby declare that the project report titled A
Place:
Date:
SRM MBA-H
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ACKNOWLEDGEMENT
Finally, I thank all those who directly and indirectly contributed to this project.
Sonia Jacob
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Index
Sr.no
Particulars
Pg no
CHAPTER 1
1
INTRODUCTION
1.1
1.2
INDUSTRY PROFILE
4
4
1.3
1.4
1.5
1.6
ROLE OF SEBI
14
14
15
1.7
18
1.8
21
1.9
ORGANISATION PROFILE
22
1.10
REVIEW OF LITERATURE
28
1.11
32
1.12
33
1.13
34
17
17
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CHAPTER 2
2
RESEARCH METHODOLOGY
36
2.1
RESEARCH METHODOLOGY
36
2.2
RESEARCH DESIGN
36
2.3
36
37
37
37
38
2.4
38
2.5
38
38
39
39
39
Chapter 3
3.1
DATA INTERPRETATION
41
3.2
HYPOTHESIS ANALYSIS
52
Chapter 4
4.1
FINDINGS
56
4.2
SUGGESTIONS
58
Chapter 5
5.1
SUMMARY
60
5.2
BIBLIOGRAPHY
61
5.3
ANNEXURE
62
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ABSTRACT
A STUDY ON THE PERFORMANCE OF THE SBI MERCHANT BANKING
The main focus of the study would be on functioning of the Merchant Banking companies.
The study would have information and details of Merchant Banking of public sector and
private sector companies and then an analysis will be done on the collected information and
finally a comparison between these two categories will be done. After comparison it would
be find out which category has more growth potential in present scenario as well as in future.
After the study, based on the data collected, it has been analyzed and better suggestion and
conclusion are given to conclude the project study. A pilot study of 40 samples has been
collected to identify the effectiveness of the questionnaire. The statistical tools which are
used for the findings are percentage method, Chi-square test and weighted average method.
The primary sources of data are collected from a structured questionnaire circulated among
the various sectors of individuals. The data obtained give rise to following findings:
1. Out of total respondents, 45% respondents take Financial Service and rest 55%
respondents do not take Financial Service.
2. Out of total respondents, 44% respondents Know about merchant banking and rest
56% respondents do not know about merchant banking.
3. 43.75% respondents are Satisfied with the services provided by SBIs Merchant Bank
and the rest 56.25% respondents are unsatisfied.
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CHAPTER 1
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Merchant Banking is known by different names in different places. In the USA, it is known
as Investment Banking. In the UK it is known as accepting and clearing houses.
services company with a private equity investment arm offering investment banking and
ancillary services as well. Because a merchant bank acts not only as an advisor and broker
but also as a principal, a merchant bank has a longer term approach than a typical investment
bank and is highly concerned with the viability of each investment opportunity and providing
the right advice for a strong partnership with each client company.
Amidst the swift changes sweeping the financial world, Merchant Banking has emerged as an
indispensable financial advisory package. Merchant banking is a service-oriented function
that transfers capital from those who own to those who can use it. They try to identify the
needs of the investors & corporate sector & advice entrepreneurs what to do to be successful.
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The merchant banking has been defined as to what a merchant banker does. A merchant
Banker has been defined by Securities Exchange Board Of India (Merchant Banker) rules,
1992, as Any person who is engaged in the business of issue management either by
making arrangements regarding selling, buying or subscribing to securities or acting as
manager, consultant, advisor or rendering corporate advisory services in relation to such
issue management.
-Their primary sources of income are PIPE (Private Investment In Public Entities)
financings and international trade.
-Their secondary income sources are consulting, Mergers & Acquisitions help and
financial market speculation.
-Because they do not invest against collateral, they take far greater risks than
traditionalbanks.
-The reason that businesses should develop a working relationship with a merchant
bank is that they have more money than venture capitalists. Their advice tends to be
more pragmatic than venture capitalists.
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considered usurious rates by the Church, but did not bind the Jews. In this way they could
secure the grain sale rights against the eventual harvest. They then began to advance against
the delivery of grain shipped to distant ports. In both cases they made their profit from the
present discount against the future price. This two-handed trade was time consuming and
soon there arose a class of merchants, who were trading grain debt instead of grain.
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Syndication of Loan
Merchant Bankers arrange short, medium and long term loans for their clients. They
analyze the pattern of clients cash flows, based on which the terms of borrowing can
be defined. It then prepares a detailed loan memorandum which is circulated to various
banks and financial institutions and they are invited to participate in the syndicate. The
merchant banks then negotiate the terms of lending based on which the final allotment
is done. It also arranges for raising foreign exchange loans and external commercial
borrowings for import of capital.
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Issue Management
This is the primary function of merchant bankers. It refers to the management of
securities offering of corporates to the general public and existing shareholders on
rights basis. Merchant bankers act as lead managers and assists companies in arriving
at quantum and nature of issue and obtaining consent/clearance from various statutory
authorities, preparing draft prospectus, obtaining approval from appropriate authorities
etc. it also assists companies in tying up with underwriters for the issue, appoint other
intermediaries like brokers, bankers, advertising agents, registrar to the issue and coordinates the activities of these agencies and institutions from the successful flotation
of the issue. It also helps in listing the securities in stock exchange, finalizing basis of
allotment, arranging for refund, handling investor complaints etc.
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Underwriting of issues
In order to ensure full subscription or the stipulated minimum subscription of 90% of
the issue, companies enter into an agreement with financial institutions, banks, brokers
and bankers to underwrite the issue amount. Merchant bankers can underwrite issues
and assist companies in tying up with other underwriters
Corporate Counseling
Rendering assistance to corporate clients on various aspects of business operations in
the areas of financial planning, performance budgeting, restructuring capital, and other
aspects of financial management and monitoring systems and operations.
Investment Counseling
This activity involved assisting firms, companies, trusts, funds and associations in the
choice of shares and stocks for investment depending upon the needs and the riskreturn trade-off, as well as taxation and time considerations.
Portfolio
Management
Services
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the services of portfolio management has to enquire of the investment needs of the
client, the tax bracket, ability to bare risk, liquidity requirements, etc. they should
study the economic environment affecting the capital market, study the securities
market and identify blue chip companies in which money can be invested. They
should keep record of latest amendment in government guidelines, stock exchange
regulations, RBI regulations, etc.
Venture Capital
Merchant Bankers help co obtaining venture capital for financing their new and
innovative strategies. Venture capital financing is a type of financing by venture capital:
the type of private equity capital is provided as seed funding to early-stage, high-potential,
growth companies and more often after the seed funding round as growth funding round
(also referred to as series A round) in the interest of generating a return through an
eventual realization event such as an IPO or trade sale of the company.
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Leasing Finance
Is there another lucrative area of financing where merchant bankers are turning?
Leasing is a viable source of financing while acquiring capital assets. The services
include arrangement for lease finance facilities for leasing companies, legal;
documents and tax consultancy.
Non-resident investment
Merchant bankers provide investment advisory services to attract NRI investment in
primary and secondary markets, undertake buying and selling securities on their
behalf, secure clearances from RBI under FEMA for repatriation of interest and
dividends etc.
Joint ventures
Merchant Bankers help corporates with joint ventures in India and abroad.
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ACTIVITIES
NETWORTH
Category I
RS 1 Crore
act
as
advisor,
consultant,
manager,
Category II
Rs 50 lakh
To
act
as
advisor,
underwriter
or
Rs 20 lakh
consultant
to an issue
Category IV
Nil
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2. No merchant banker should associate with another merchant banker who is not
registered in SEBI
.
3. Merchant bankers should not enter into any transactions on the basis of unpublished
information available to them in the course of their professional assignment.
4. Every merchant banker must submit himself to the inspection by SEBI when required
for and submit all the records.
5. Every merchant banker must disclose information to the SEBI when it requires any
information from them.
6. All merchant bankers must abide by the code of conduct prescribed for them.
7. Every merchant banker who acts as lead manager must enter into an agreement with
the issuer setting out mutual rights, liabilities, obligations, relating to such issues with
particular reference to disclosures allotment, refund etc.
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The SEBI has announced the new guidelines for the disclosures by the
Companies leading to the investor protection. They are presented below:
a) If any Companys other income exceeds 10 per cent of the total income, the details
should be disclosed.
b) The Company should disclose any adverse situation which affects the operations of
the Company and occurs within one year prior to the date filing of the offer document
with the Registrar of Companies or Stock Exchange.
c) The Company should also disclose the information regarding the capacity utilization
of the plant for the last 3 years.
d) The Promoters of the Company must maintain their holding at least at 20 per cent of
the expanded capital. The minimum application money payable should not be less
than 25 per cent of the issue price.
e) The company should disclose the time normally taken for the disposal of various
types of investors grievances.
The Company should disclose the safety net scheme or buy back arrangements of the
shares proposed in public issue. This scheme is applicable to a limited number of 500
shares per allottee and the offer should be valid for a period of at least 6 months from
the date of dispatch of securities.
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j) According to the SEBI guidelines regarding rights issue, the Company should give
advertisements in not less than two newspapers about the dispatch of letters of offer. No
preferential allotment may be made along with any rights issue.
k) The Company should also disclose about the fee agreed between the lead managers and the
Company in the memorandum of understanding.
Rs. 5 lakhs which should be paid within 15 days of date of receipt of intimation regarding
Grant of certificate. Validity period of certificate of registration is three years from the
Date of issue. Three months before the expiry period, an application along with renewal
Fee of 2.5 lakhs should be submitted to SEBI in Form A of the SEBI (Merchant Bankers)
Regulations, 1992. SEBI shall consider the application and on being satisfied renew
Certificate of registration for a further period of 3 years.
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MERCHANT
As planning and industrial policy of the country envisaged the setting of up of new industries
and technology, greater financial sophistication and financial services are required. There is a
well proven link between economic growth and financial technology.
Economic development requires specialist financial skills: savings banks to marshal
individual savings; finance companies for consumer lending and mortgage finance; insurance
companies for life and property cover; agricultural banks for rural development; and a range
of specialized government or government sponsored institutions. As new units have been set
up and business is expanding, they require additional financial services. A public equity or
debt issue is the logical source of fund in this situation and merchant banks can tap this
opportunity of growth.
Now India capital market directly taps foreign capital through euro issues.FDI is increased in
capital market. So Merchant bankers are required to advice them for their investment in India.
The increasing number of joint ventures also requires expert services of Merchant Bankers. If
more and more NRIs participate in capital market, there will be great demand for merchant
banker services.
Now the lending policies of financial institutions are based on project orientation, so the
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merchant banker services will be needed by corporate enterprise to provide expert guidance.
If the debt market is enhanced, there will be tremendous scope for Merchant bankers. Now
NSE and OTCEI are planned to raise their fund through debt instruments.
Corporate restructuring:
Indian market is growing. In fact India is one of the largest emerging markets.
Obviously, public issues, FDI, debt raising are on rise. Lots of new and green fried
projects are happening. Merchant bankers have lots space to contribute.
Restrictions-liberalization :
More liberal the market is, more the things left to be decided by the corporate.
Merchant bankers assist in decision making and hence their scope increases. With
significant market freedom, merchant bankers work has increased many folds.
Banking policies
RBI prefers that commercial banks do not indulge in merchant banking business
directly. They should setup a subsidiary for the purpose. This limits scope of
commercial banks and gives space to merchant bankers. This policy also results in fair
business practices. Some countries allow commercial bankers to get involved in
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I.
Industry compartmentalization
II.
Malafide practices
India corporate culture is bettering. but still many corporate have excessively
friendly approach. Favored allotment of shares, tampering with project appraisal
report to bankers is common. Corporate like to use merchant bankers for malafide
intentions. This gives growth to more boutique fly-by-day firms. Giant
professional or multinational merchant bankers are cautions in their approach to
Indian market.
III.
Regulations
Though regulations are much better now, there is still scope for further
improvement. Merchant bankers can be made more accountable and responsible.
Professional qualification focused on merchant banking is not available. Industry
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is not well organized and all the players do not play the same tune. This is
specifically evident in comparison with insurance industry and mutual funds
industry.
SBI Merchant Banking Group is strongly positioned to offer perfect financial solutions to
your business. We specialize in the arrangement of various forms of Foreign Currency
Credits for Corporate.
State Bank of India is the nation's largest bank. Tracing its roots back some 200 years to the
British East India Company (and initially established as the Bank of Calcutta in 1806), the
bank operates more than 13,500 branches and over 5,000 ATMs within India, where it also
owns majority stakes in seven associate banks. State Bank of India has more than 50 offices
in nearly 35 other countries, including multiple locations in the US (California), Canada, and
Nigeria. The bank has other units devoted to capital markets, fund management, factoring and
commercial services, and brokerage services. The Reserve Bank of India owns about 60% of
State Bank of India.
SBI being an Indian entity has no India exposure ceiling. Our Primary focus is On Indian
Clients. SBIs seasoned Team of professionals provides you with Insightful credit
Information and helps you Maximize the Value from the transaction.
OUR PRODUCTS AND SERVICES
Arranging External Commercial Borrowings (ECB)
Arranging and participating in international loan syndication
Loans backed by Export Credit Agencies
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SBI CAPITAL MARKETS LIMITED (SBICAPS) is India's leading investment bank and
project advisor, assisting domestic companys fund-mobilization efforts for last many years.
We began operations in August 1986 as a wholly owned subsidiary of the State Bank of
India, which is the largest commercial bank in India. In January 1997, fresh equity shares
were issued to Asian Development Bank (ADB) and ADB now holds 13.84% stake in the
equity of SBICAPS. The distinguished parentage (with a 86.16% stake) together with the
long standing association of an internationally renowned financial institution like the Asian
Development Bank further enhances our image as a truly 'World Class Investment Bank'.
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No. 1 in Asia Pacific for Project Advisory. Rating by Thomson Project Finance
International.
No. 1 in IPOs, managed 700+ issues (since 1989 source Prime Database).
The only Indian Merchant Banker in the Global 10, Thomson Project Finance
International 2007.
Pioneer in Privatization.
Subsidiary
Associates Bank
State Bank of
Bikaner &
Jaipur
State Bank of
Saurashtra
SBI (California)
State Bank of
Hyderabad
State Bank of
Travancore
SBI Funds
Management
(P) Ltd.
SBI
International
(Mauritius)
Ltd.
State Bank of
Indore
SBI Capital
Markets Ltd.
Indo-Nigerian
Merchant Bank
State Bank of
Mysore
SBICI Bank
Ltd.
SBI Life
Insurance Co.
Ltd
Nepal SBI
Bank Limited
Commercial
Bank of India
LLC
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Promoters Share: -
Performance:-
Awards: Asia Pacific Bank of the Year Award 2009 for Leadership in Project Finance by
Thomson Reuters (pfi)
India Loan House 2009 for Leadership in Loan Syndication by Thomson Reuters (ifr
Asia)
Asia Pacific Oil and Gas Deal of the Year 2009 for Cairn India by Thomson Reuters
(pfi)
African Power Deal of the Year 2009 for Morupule B by Thomson Reuters (pfi)
Indian Power Deal of the Year 2009 for Sasan by Euromoney
Indian Upstream Oil & Gas Deal of the Year 2009 for Cairn India by Euromoney
Indian Road Deal of the year 2009 for Yamuna expressway by Euromoney
Indian Telecom Deal of the Year 2009 for Aircel by Euromoney
SAFA Best Presented Accounts Award 2008
Award for Excellence in Financial Reporting
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SERVICES
Project Appraisal
Structured Finance and Syndication
Infrastructure Project Advisory
Securitisation
Debt & Equity Syndication
Capital Markets
Capital Markets Group handles transactions in the capital markets space across multiple
instrument structures.
Our product and solutions bouquet includes:
Managing Initial Public Offerings and Follow-on Public offerings and Offers-for-Sale
Managing Rights Offering, be it the traditional or the structured formats
Qualified Institutional Placements
Open offers, Buyback and Delisting of securities
Offerings of convertible securities
Public offering of Corporate structured bonds
Arranging Private Equity to include growth capital, pre-IPO convertibles, private
investments in public equity (PIPES), mezzanine debt and equity, and equity offerings
completed as a private placement.
Private placement of bonds
Capital restructuring advisory services
Advisory and arrangement services for products such as AIM Listing, Indian
Depository Receipts, ADR/GDR and other off-shore equity or bond listing options
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As a strategic partner, the State Bank Of India provide a broad and complimentary range of
services to address the business needs. The expertise, insight and competitive rates in Foreign
Currency loans give an edge to your business.
The State Bank Of India invites you to use their comprehensive array of strategic and
financial advisory services including mergers and acquisitions, Bilateral Foreign Currency
Loans, Syndicated Loans and Reverse FDIs.
SBIs Merchant Banking Group is strongly positioned to offer perfect financial solutions to
your business. They specialize in the arrangement of various forms of Foreign Currency
Credits for Corporate. They provide the resources, convenience and services to meet your
needs by arranging Foreign Currency credits through:
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Literature Survey
Verma (1990)
I conducted research on merchant banks in India with the purpose to analyse their
organization structure and management pattern and to assess their suitability for medium and
small size corporate and non corporate enterprises. The suitability of merchant banking
services in reducing investors risk and corporate capital structure has also been examined.
The information was collected from a sample of 32 merchant bankers through questionnaire
and the study covered the period 1978 to 1984.
The researcher found a number of weaknesses in the existing divisional form organization
and management pattern of merchant banks in India. This included deep concentration of
decision making power, lack of co-ordination, lack of appropriate skill, inadequate training
programme, strict dependence on the bureaucratic framework, blocked communication
channels and misdirected accountability. The study revealed that 90 percent of the resources
of all merchant banks were devoted only to the management of public issues.
A negligible performance of merchant banks was found in other areas of services including
loan syndication, merger and amalgamation, inter corporate investments and corporate
counselling. Further, merchant banking activities were found to have remained concentrated
with only a few top merchant bankers, while stock brokers managed very small sized issues
covering just 15% of the total amount of public issues.
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A good public response was found to the issues managed by category I merchant bankers
including merchant bankers of public sector banks, whereas the category II merchant bankers
which included private firms had the public response of second order.
The researcher highlighted the merchant banks contribution in causing risk reduction both
to investors (through portfolio management) as well as the industry (through project
counseling and corporate counseling). Empirical results also highlighted that corporate
enterprises which sought merchant bankers assistance were financially sounder and less
prone to sickness as compared to those not assisted by the merchant banks.
Murthy (1993)
In his paper examined the cost of raising capital from the public issues floated during 199293. During 1992-93, an amount of Rs. 4677.74 crore was raised through 514 public issues.
The estimated expenses on these issues were Rs. 473 crore. Analysis of 506 public issues
showed that issue expenditure as percentage of net public offer was 10.10% and the
proportion of issue expenses declined with the increase in offer size. The study found that
smaller projects tend to spend a higher proportion as issue expenditure compared to the larger
ones. The researcher also compared the cost of raising capital of issues through the OTC
(over the counter) route and regular stock exchange option and found that the cost of raising
capital through OTC route was lower than the issues that opted for regular stock exchange
route.
The study pointed out that no uniform format existed for reporting the issue expenditure in
the prospectus. The researcher has suggested that the total issue expenditure as percentage to
the total issue amount be reported prominently in the prospectus and abridged prospectus
cum application form.
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Shah (1995)
Conducted an empirical study on the data set of 2056 Indian IPOs listed on the BSE from
January 1991 to May 1995 with the objective to examine the under pricing of IPOs and to
establish the empirical regularities about Indias IPO market. He examined six factors
underlying under pricing, namely asymmetric information between firms and investors,
fixing the offer price too early, the interest rate float, loss of liquidity on the amount paid at
issue date (liquidity premium), building loyal shareholders and merchant bankers rewarding
favoured clients as an incentive to under price. Empirical study found that the average price
on first listing day was 105.6% above the offer size, average delay between issue dates and
listing day was 11 weeks and weekly excess return on market index (BSE Sensex) was 3.8%.
The study further found that correlation between the volume of IPOs under pricing and the
return on BSE Sensex was positive, under pricing among the smaller issues was high, average
long run trading frequency of IPO was lower than A group companies and return on IPOs
during the first 200 trading days was more than market return.
A Few of literature are Form of banking where the bank arranges credit financing, but does
not hold the loans in its investment portfolio to maturity. A merchant bank invests its own
capital in leveraged buyouts, corporate acquisitions, and other structured finance transactions.
Merchant banking is a fee based business, where the bank assumes market risk but no longterm credit risk. A common form of banking in Europe, merchant banking is gaining
acceptance in the United States, as more banks originate commercial loans and then sell them
to investors rather than hold the loans as portfolio investments. A banque d'affaire is a French
merchant bank, which has more powers than its British counterpart. The Gramm-LeachBliley Act allows financial holding companies, a type of Bank Holding Company created by
the act, to engage in merchant banking activities.
First of all, you should make a list of several providers that offer the features you want, and
then compare the variable fees that may differ depending on the company you deal with.
These fees include things like set-up, cancellation, and monthly minimum, and may be
negotiable based on your unique circumstances.
Once you have determined what your business will be charged for its merchant account, its
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often a good idea to do a few sample calculations to work out your total credit card
processing costs during a good, bad, and average month.
Finally, you should read and double-check the contract, including small print and detailed
terms. Dont sign anything until you are confident that you understand all the fees,
minimums, termination clauses, and other details. Its important to keep in mind that
merchant account providers wont go over every single point with every single customer, and
that it is ultimately your responsibility to read and understand the terms.
Financial services firm India Infoline on Wednesday said its wholly owned subsidiary, India
securities Pvt. Ltd, has received a category 1 merchant banking licence from the Securities
and Exchange Board of India.
This will enable the company to carry out the entire range of merchant banking activities
ranging from public issue management to advisory services and underwriting of issues a
company release said here.
Mr. Ajit Menon, Senior Vice President and Head-Investment Banking, India Infoline, said
the company would provide focused corporate finance advisory for SME`s in the areas of
mergers & acquisitions, pvt. equity placements, IPOs & high yield debt. We see specific
opportunities in cross border M&A that would bring in strategic benefits and growth
opportunities for companies in the SME sector and we are already seeing good traction in this
area
India Infoline expects a significant number of small and medium-sized companies to be
turning to the capital markets and becoming involved in mergers and acquisitions.
The leading investment banks are targeting the large companies and the small and mediumsized companies bracket is a good untapped growth opportunity.
The company recently acquired Marchmont Capital Advisors Ltd and entered into an alliance
with Marchmont International for exclusive services and non-compete in India.
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It would help us to develop the ability to study the functioning of Merchant Banking
in India & learn & apply multidisciplinary concepts, tools & techniques to solve vital
problems.
It would help us to draw comparison between SBICAP & other private sector
companies engaged in Merchant Banking activities.
Based upon the comparison, it would help us to determine which sector has more
growth potential & where should one invest his/her funds to maximize the return at
minimum risk.
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To evaluate the performance of Merchant Bankers, both activity performance and operational
and financial performance.
To understand the customers satisfaction level provided by the SBI merchant banking
services
To analyze the functions of Merchant Banking in relation to rules and regulations of SEBI
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Study would be confined to only 2-4 public & private sector merchant banking
companies.
Sample size to be taken may not be the true representative of the population.
Sometimes, they may face the problem of sufficient capital to deal in securities which
stops them from getting proper returns.
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CHAPTER - 2
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Total no of respondents
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CHAPTER 3
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Number of clients
Percentage
Yes
18
45%
No
22
55%
Total
40
100%
GRAPH
45%
55%
Yes
No
Interpretation
Out of total respondents, 45% respondents have taken Financial Service and rest 55%
respondents have not taken the Financial Service.
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Nos.
Percentage
Yes
16
40%
No
24
60%
Total
40
100%
GRAPH
60%
50%
Percentage
40%
30%
20%
10%
0%
Percentage
Yes
44%
No
56%
INTERPRETATION
Out of total respondents, 44% respondents Know about merchant banking and rest 56%
respondents dont know about merchant banking.
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Q3. Are you satisfied with the services provided by your bank?
Sr. No.
Satisfied
Nos.
Percentage
Yes
17
42.5%
No
23
57.5%
Total
40
100%
GRAPH
Percentage
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Yes
No
Percentage
Yes
42.50%
No
57.50%
INTERPRETATION
Out of total respondents, 42.50% respondents areSatisfied and the rest 57.50% respondents
are unsatisfied.
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Sr. No
Bank
Percentage
ICICI
20
SBI
35
PNB
20
BOI
15
Other
10
GRAPH
15%
ICICI
SBI
PNB
BOI
Other
20%
35%
INTERPRETATION
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Sr.no
Position
Percentage
Good
50%
Normal
35%
Bad
15%
Total
100%
GRAPH
15%
Good
Normal
50%
Bad
35%
INTERPRETATION
Out of total respondents, 50% respondents Say Good, 35% Say Normal and rest 15%
respondents say bad.
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Sr.no
Position
Percentage
Good
40%
Normal
55%
Bad
5%
Total
100%
GRAPH
5%
40%
Good
Normal
Bad
55%
INTERPRETATION
Out of total respondents, 40% respondents Say Good, 55% Say Normal and rest 5%
respondents say bad.
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Nos.
Percentage
1.
Yes
32
80%
2.
No
20%
Total:
40
100%
GRAPH
80%
Yes
No
INTERPRETATION
Out of total respondents, 80% respondents Satisfied and rest 20% respondents are unsatisfied.
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Sr. No.
Depends on M.B
Nos.
Percentage
Yes
28
70%
No
12
30%
Total
40
100%
GRAPH
No
30%
70%
INTERPRETATION
Out of total respondents, 75% respondents Say that They are timely heared and rest 25% say
that They are not timely served by merchant banking.
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Sr. No.
Difference
Nos.
Percentage
Yes
30
75%
No
10
25%
Total
40
100%
GRAPH
40
30
20
10
0
Yes
No
INTERPRETATION
Out of total respondents,75% respondents Think that It is differ and rest 25% respondents
dont Think so.
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11. Which is the best service provided in a Public sector Merchant Bank?
IN PUBLIC SECTOR MERCHANT BANKING
Numbers
Percentage
Capital Restructuring
Venture capital financing
Credit syndication
Others
Total
14
35%
20%
18
45%
0%
40
100%
GRAPH
45%
40%
35%
Percentage
30%
25%
20%
15%
10%
5%
0%
Series1
Capital
Restructuring
35%
Venture capital
financing
20%
Credit
syndication
45%
Others
0%
INTERPRETATION
In a Public Sector Merchant Bank the Service mostly used is Credit Syndicatiom at a rate of
45% followed by Capital Restructuring and Venture Capital Finance at a rate of 35% and
20% respectively.
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12. Which is the best service provided in a Private sector Merchant Bank?
TABLE
IN PRIVATE SECTOR MERCHANT BANKING
Numbers
Percentage
Capital Restructuring
10
25%
16
40%
Credit syndication
10
25%
10%
40
100%
Others
Total
GRAPH
Percentage
30%
25%
20%
15%
10%
5%
0%
Series1
Capital
Restructuring
25%
Venture capital
financing
40%
Credit
syndication
25%
Others
10%
INTERPRETATION
In a Private Sector Merchant Bank the Service mostly used is Venture Capital Finance at a
rate of 40% followed by Capital Restructuring and Credit Syndication at a rate of 25% and
25% each and other services with 10%.
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PUBLIC
PRIVATE
TOTAL
CAPITAL RESTRUCTURING
13
12
CREDIT SYNDICATION
10
15
TOTAL
22
18
40
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(Oi-Ei)
(Oi-Ei)^2
(Oi-Ei)^2/Ei
Expected
Frequency (Ei)
7.15
0.85
0.7225
0.1010
5.8
-0.8
0.64
0.1103
6.6
-2.6
6.76
1.0242
5.4
2.6
6.76
1.0242
10
8.25
1.75
3.062
0.3711
6.75
-1.75
3.062
0.3711
Total
CALCULATION:
E1=22*13/40=7.15
E2=18*13/40=5.8
E3=22*12/40=6.6
E4=18*12/40=5.4
E5=22*15/40=8.25
E6=18*18/40=6.75
3.0019
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INFERENCE:
Since table value is greater than the calculated value Null Hypothesis is
accepted. Willingness to take up Public or Private merchant banks as a merchant banking
option is independent of the services provided by the merchant banks.
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CHAPTER 4
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4.1FINDING
80% of the respondents treat SBI caps as a Merchant Banking Service option
While dealing with the clients, it is found that medium level entreprenuers are more
Interest in Merchant banking Services
Business sector feels that Merchant banking is an important criterion in their field
ofwork.
The clients would like to invest their money where they would get more Security
The willingness to take up SBICaps Merchant banking as an investment option is
independent of the services provided by them.
Comparision Between
Private and Public
Sector Merchant Bank
Private
56%
Public
44%
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With the exception of SBI Capital Markets Ltd and Canara Bank, no other public
sector bank performed a significant role in the public issue management
activities.Other public sector banks subsidiaries/merchant banking divisions who
showed their presence in public issue management were BOB Capital Markets Ltd, All
bank Finance Ltd.
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Try to reduce fund charges, administration charges and other charges which would to
help gain more clients.
Different campaigns should be launched to educate people regarding Merchant
Banking.
From the findings, it is found that, the security is the main criteria for the
investors. It is suggested that this aspect would be reinforced while
accessing the clients.
The people do not want to take risk. The Merchant banks should come up with more
risk free services so that the risk becomes minimum. This will lure more and more
people to take Merchant Banking Services.
The expectation of the people from the Merchant Bank is high. So, a blue print of the
business services to pe provided should be prepared taking into consideration the
expectations of the people.
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CHAPTER 5
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The company wants to know the perception of investors, who perceive Merchant Banking as
an investment option. The company would like to create the awareness of SBI Merchant
Banking. This study would assist. In the form of an infrastructure, for the forthcoming
branches in developing their services towards the Investors.
Multiple revenue growth initiatives are in place with detailed and concrete action
plans, and with rigorous follow-up mechanisms.
Small & Medium scale enterprises SMEs need immediate attention from merchant
bankers to get access to finance.
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5.2 BIBLIOGRAPHY
BOOKS
S.P.Gupta, Statistical Methods, Sultan Chand & Sons Vol 1 pp.E-3.1,
(E-4.1 E-4.15), E-13.5.
S.P. Gupta, Statistical Methods, Sultan Chand & Sons Vol 2 pp.A-4.1.
Beri G.C., Marketing Research. New Delhi, Tata Mc Graw Hill Pub,
Edition II, pp.245-260.
Donald S.Tull, Marketing Research Measurements and Methods, Tata
Mc Graw Hill, pp.310-312.
WEBSITES
www.google.com/news
www.answer.com
www.emissarycapital.com
www.wikipedia.com
www.sebi.gov.in
http://unionbankofindia.co.in
http://www.asialaw.com/Article/1988860/Merchant-Banking.html
http://www.icicisecurities.com
http://www.sbicaps.com
http://www.canmoney.in
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ANNEXURE
Annexure1
Respondents Profile
Name
:_______________
Age
:_______________
Gender
:_______________
Occupation :_______________
(b) NO
( )
(b) No
Yes
(b) No
( )
( )
(b) SBI
(c) PNB
( )
(d) BOI
( )
(e) OTHER(specify)
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(c) Bad
(b) Normal
( )
(c) Bad
(b) Normal
( )
7. What type of security have you deposited/you will deposit with the banks
(a)Bank security
( )
(b) Gold
(b) No
( )
(b) No
( )
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(a) Yes
( )
(b) No
( )
11. Which is the best service provided in a Public sector Merchant Bank?
(a) Capital restructuring ( )
(b) Venture capital financing ( )
(c) Credit syndication ( )
(d) Others ( )
12. Which is the best service provided in a Private sector Merchant Bank?
(a) Capital restructuring ( )
(b) Venture capital financing ( )
(c) Credit syndication ( )
(d) Others ( )
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ANNEXURE-2
MERCHANT BANKING PLAYERS IN INDIA
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