MERCHANT BANKING MERCHANT BANKING vs. vs.

INVESTMENT BANKINGINVESTMENT BANKING

Presentation by:Shikha GabaShikha GabaRahul NigamRahul NigamVipan KumarVipan KumarSaket AjmeraSaket Ajmera

Parineeta SharmaParineeta SharmaAyan ChakrabortyAyan Chakraborty

Merchant Banking

Merchant bank is a financial institution primarily engaged in offering financial services and advice

to corporations on HOW to use their money.

Merchant Banking

• Perform international financing activities• Project consulting and financing•Identifying promising projects•Prepare feasibility studies•Prepare in-depth project reports•Assist invest in obtaining licenses•Arrange & negotiate foreign collaboration•Capital Restructuring•Working Capital Finance•Syndication of loans•Lease Financing

Investment Banking

An Investment bank is a financial institution that assists corporations and governments in raising capital by underwriting and acting as the agent in the issuance of securities. An investment bank also assists companies involved in mergers and acquisitions, derivatives, etc. Further it provides ancillary services such as market making and the trading of derivatives, fixed income instruments foreign exchange, commodity, and equity securities.

Difference between merchant banking & Investment banking

• Merchant Banks offer financial services and advices to wealthy individuals and corporations.

Investment banks are financial institutions supporting governments and corporations, that help to raise capital.

• Main difference between merchant banking and investment banking is mode of wealth management and services offered. Merchant banks invest their own capital in business operation of clients. Investment bank primarily trades and distributes securities of their clients while raising capital.

Difference continued……

• Investment banks focus on initial public offerings (IPOs) and large public and private share offerings whereas Merchant banks tend to operate on small-scale companies and offer creative equity financing, bridge financing, and a number of corporate credit products

• Merchant banks still offer trade financing products to their clients whereas Investment banks rarely offer trade financing because most investment banking clients have already outgrown the need for trade financing and the various credit products linked to it.

Merchant bankers

Five Organizations dealing in Merchant Banking • Puneet Advisory Services Pvt Ltd• Allianz Securities Ltd • Bajaj Consultants Pvt Ltd• DSP Merrill Lynch Ltd• Canara Bank

Services provided

• Lead & Manage IPO.• Manage Rights and Public Issues.• Manage De-Listing of Shares.• Manage Qualified Institutional Placement of

Shares.• Manage Take-over and Acquisitions of Indian

Companies.• Issue Certificates for ESOP as per SEBI provisions.• Manage Public Issue of Corporate Debt

Instruments.

Investment Bankers

Five Organisations dealing in Merchant Banking• SBI Capital Markets ltd• JP Morgan• ICICI Securities • Kotak Mahindra• UBS Investment Bank

Functions of Investment Banking:• Investment banking helps public and private

corporations in issuance of securities in the primary market. They also act as intermediaries in trading for clients.

• Provides financial advice to investors • Assisting the investors in purchasing and trading

securities • Managing financial assets• Advising for mergers and acquisitions

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