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smu de solved assignment Q Define merchant banking and explain its functions.

Merchant bank is a financial institution that specialises in providing various financial services such as hire purchase or instalment buying, international trade financing, acceptance of exchange bills, long term loans, and so on. It provides advice on portfolio management. Merchant banks act as an intermediary between issuer and purchaser of securities.

Merchant bankers manage the new issue of companies. They give services in designing the capital structure
of a company and also hire issue houses and advertising agencies for pre and post publicity of the issue.
The merchant bankers have pre and post issue obligation. In case of pre issue the merchant bankers have to make arrangements for filling the prospectus and relevant documents with SEBI and in case of post issue
they have to make arrangements for getting the shares allotted and despatched within specified period to the applicants.

Functions of merchant banking:
 Issue management
 Pre-investment studies of investors
 Corporate counselling
 Project counselling
 Loan syndication
 Portfolio management
 Project finance
 Working capital
 Managerial and technical services


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