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Scope For Merchant Banking in India

Merchant banking in India has significant scope due to several factors: 1) The size and growth of the Indian market creates demand for public issues, foreign direct investment, and debt raising, providing opportunities for merchant bankers. 2) Liberalization of the market gives corporations more freedom in decision making and allows merchant bankers to assist, increasing their role. 3) RBI policies limit the scope of commercial banks in merchant banking and give space to dedicated merchant bankers. 4) When corporations prefer independent third-party assessments, they will engage merchant bankers for services beyond statutory issue management.

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Parul Prasad
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668 views1 page

Scope For Merchant Banking in India

Merchant banking in India has significant scope due to several factors: 1) The size and growth of the Indian market creates demand for public issues, foreign direct investment, and debt raising, providing opportunities for merchant bankers. 2) Liberalization of the market gives corporations more freedom in decision making and allows merchant bankers to assist, increasing their role. 3) RBI policies limit the scope of commercial banks in merchant banking and give space to dedicated merchant bankers. 4) When corporations prefer independent third-party assessments, they will engage merchant bankers for services beyond statutory issue management.

Uploaded by

Parul Prasad
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SCOPE FOR MERCHANT BANKING IN INDIA Scope for merchant banking in India [1] depends upon the following

factors: Size and dynamics of the market: 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 things are 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. Corporate culture: Corporate can do project appraisal & strategic restructuring in house as well. If the corporate prefer third-party independent assessment, then only they will engage merchant bankers. Otherwise merchant bankers role is only statutory as in issue management. Corporate dynamics: More happening in business gives more opportunities to merchant bankers. Mergers, takeover, acquisition, new Greenfield projects, fund raising for government institutions, active money market are all providing better business prospectus to merchant bankers.

Merchant Banking in India K.C. Gupta and Joginder Singh

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