INDUSTRY INTERNSHIP PROGRAME

“A STUDY ON ROLE OF MERCHANT BANK IN

CAPITAL MARKET”

Submitted to:
Prof. Revathi
IFIM B-School.
BANGALORE Submitted By:
Arijit Das
PGDM (08-10)
Sec : A

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 DECLARATION BY THE STUDENT

I, Arijit Das, hereby declare that the project work has been carried out through my
own efforts and under the guidance of Prof. Revathi, faculty of IFIM Business
School.Bangalore.

This project has been submitted as a part of study curriculum of MBA program.
The report has not been submitted to any other university.

Signature

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 ACKNOWLEDGEMENT

We express our gratitude to Prof. Revathi, Professor of Finance at IFIM

Business School for providing us an opportunity to work on this project. Prof.
Revathi has been extremely supportive and suggestive to us in course of the
project and has also spent his valuable time and guiding us as to how to go about
the project. Her inputs has added value to our knowledge and we owe our heartfelt
gratitude to him, without whom this project wouldn’t have been a successful one.
.

Date – 30-06-2010
Place – Bangalore.

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 EXECUTIVE SUMMARY

This project mainly focuses on Role of Merchant Bank in capital market, its
history and development.

Herein, I discuss the basic functions of Merchant Bank, the importance of

Merchant bank in the context of Indian scenario and the regulatory framework of
merchant bank Under SEBI guidelines.

It discusses ICICI securities Ltd as a merchant Banker in the Indian capital market.

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 CONTENT
SL NO. TOPIC PAGE NO.
1 Review of Literature 6
2 Objectives 9
3 Methodology 9
4 Introduction 10
5 Origin of merchant 13
banking
6 Importance and 17
Need of merchant
bank
7 Organizational set 20
up of merchant bank
8 Functions of 22
merchant bank
9. Regulatory 30
Framework
10 ICICI Securities Ltd. 49
11 Conclusion 55
12 Reference 56
13 Appendix 57

REVIEW OF LITERATURE

1. Merchant Banking under SEBI Guidelines

Author info : Sankar De and Sushil Khanna

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Abstract: This paper examines the economic and financial implications of some
of the regulations introduced by the new Securities and Exchange Board of India
(SEBI) through the guidelines it has periodically issued. The regulations apply to
investment or merchant banking services required for corporate issues of long-term
securities in India. The authors find that some implications of the guidelines may
be in conflict with the professed objective of the current economic policy to induce
the corporate sector to raise external funds from private investors. Further, the
guidelines may be self-defeating in that they may result in less, rather than more,
information for the investing public about the typically unobservable quality of a
new issue.

2. Merchant Banking in India : (Evolution and Emergence, Functions, Rules

and Regulations, Experiences and Challenges)

Author Info: B.C. Lakshmanna and C.N. Krishna Naik

Abstract: "The recent thrust towards liberalizing economic and financial policies
have brought about a phenomenal growth in the securities industry in India. Their
importance in the economy is expected to grow even further in the coming years
with an increasing proportion of household savings getting invested in corporate
and other securities. Infact securities markets in India have grown exponentially in
the past fifteen years, as judged by the number of issues, capital raised, market
capitalization, trading volumes as well as price indices. The number of investors,
intermediaries and stock exchanges have also seen a significant increase. As
economy grows, securities markets are being increasingly relied upon by the
private corporate sector by public sector units and by banks for raising funds.
While the investor profile continues to be dominated by middle class individuals,
trends towards institutionalization in the securities markets are becoming evident.
With the opening of mutual fund industry to the private sector and the advent of
foreign portfolio investment, Indian securities industry is said to continue their
rapid growth. The healthy development of securities markets with appropriate

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degree and manner of regulations will be of immense importance in the coming
years on account of their role in meeting the need for greater investment.
The Indian business scenario is undergoing a dramatic metamorphosis, in view of
the economic reforms. Investment opportunities have expanded, competition (both
domestic and international) had heightened, financing options have widened and
above all dependence on capital market has increased. As a result, no participant
can afford to be inward looking. The multinational entry and the foreign capital
inflow into this country are changing the scenario further. Hence, the study
assumes further significance under the changing scenario of the Indian securities
industry.
The special feature of this book is that it covers the early stages of financial
reforms with a larger coverage. The study, inter-alia would also be helpful to
regulatory authorities like Securities Exchange Board of India (SEBI). Apart from
regulatory authorities it would also be of interest to Development Banks,
Commercial Banks, investment community, professionals, students and
researchers and corporate firms in general. This book will serve as a source of
literature in the files of Merchant Banking."
3. Study on "Emergence of Merchant Banking"
Author Info: H. Kamalini

Abstract: The Progress of any economy mainly depends on the efficient financial
system of the country. Indian economy is no exception of this. This importance of
the financial sector reforms affirms an effective means for solving the problems of
economic, financial and social in India and elsewhere in the developing nations of
the world. The progress of the securities Industry of any country depends mainly
on the flow of funds.Infact, Capital generation is the lifeblood of the capital market
without which the health and soundness of the financial system cannot be geared
up and for which well-developed capital market as well as money market is
essential.

4. Overview of merchant banking system

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Author Info: CHINMOY GHOSH

Abstract: The Progress of any economy mainly depends on the efficient financial
system of the country. Indian economy is no exception of this. This importance of
the financial sector reforms affirms an effective means for solving the problems of
economic, financial and social in India and elsewhere in the developing nations of
the world. The progress of the securities Industry of any country depends mainly
on the flow of funds. In fact, Capital generation is the lifeblood of the capital
market without which the health and soundness of the financial system cannot be
geared up and for which well-developed capital market as well as money market is
essential.

OBJECTIVES:
• To study the Importance and need of merchant banking in India .

• To analyze the issue management regulation.

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 • To analyze the scope and functions of merchant banking in India.

• To study the regulatory framework of merchant bank.

• To make a brief study on ICICI securities ltd. as a merchant banker.

METHODOLOGY:
• Literature review.

•Collection of primary and secondary data.

• Analyzing and understanding of the collected data.

• To draw conclusion and suggestions based on the analysis and

experiences.

INTRODUCTION

Merchant Banking is an important service provided by a number of financial

institutions that helps in the growth of the corporate sector which ultimately
reflects into the overall economic development of the country. Merchant banks

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were expected to perform several functions like issue management, underwriting,
portfolio management, loan syndication, consultant, advisor and host of other
activities. SEBI was also made all powerful to regulate the activities of merchant
banks in the best interest of investors and economy. Apart, merchant banking was
the necessity of banks themselves which were in need of non-fund based income
so as to improve their profitability margins by all means in the changed economic
scenario. Now, it could be anybody's anxiety to know what are the duties the
merchant bank performs most and in what capacity. Whether merchant banking
business helped banks to improve their overall profitability. Does the socio,
political and economic environment prevailing today sufficiently help the growth
of merchant banking? An attempt is being made to seek answer of these questions
and also to suggest remedial measures wherever possible on the basis of the study
done in this project.

The Progress of any economy mainly depends on the efficient financial system of
the country. Indian economy is no exception of this. This importance of the
financial sector reforms affirms an effective means for solving the problems of
economic, financial and social in India and elsewhere in the developing nations of
the world. The progress of the securities Industry of any country depends mainly
on the flow of funds. In fact, Capital generation is the lifeblood of the capital
market without which the health and soundness of the financial system cannot be
geared up and for which well-developed capital market as well as money market is
essential.

The services of merchant banking cover project counseling, per investment

activities, feasibility studies, and project reports, design of capital structure, issue
management, underwriting, loan syndication, and mobilization of funds, venture
capital and public deposits. Merchant Banking is skill based activities and involves
serving financial need of every client. Merchant Bankers can turn to any of the
activities depending upon resources such as capital, foreign tie-ups for overseas
activities and skills. The issue of securities is the core of merchant banking
function. The issue function may be broadly divided into pre-issue management
and post-issue management.

CAPITAL MARKET IN INDIA

The Bombay Stock Exchange (BSE), which began formal trading in 1875, is one
of the oldest in Asia. Over the last decade, there has been a rapid change in the
Indian securities market, both in primary as well as the secondary market.

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Advanced technology and online-based transactions have modernized the stock
exchanges. In terms of the number of companies listed and total market
capitalization, the Indian equity market is considered large relative to the
country’s stage of economic development. Currently, there are 40 mutual funds,
out of which 33 are in the private sector and 7 are in the public sector. Mutual
funds were opened to the private sector in 1992. Earlier, in 1987, banks were
allowed to enter this business, breaking the monopoly of the Unit Trust of
India (UTI), which maintains a dominant position. Before 1992, many factors
obstructed the expansion of equity trading. Fresh capital issues were controlled
through the Capital Issues Control Act. Trading practices were not transparent, and
there was a large amount of insider trading. Recognizing the importance of
increasing investor protection, several measures were enacted to improve the
fairness of the capital market.

The Securities and Exchange Board of India (SEBI) was established in 1988.
There have been significant reforms in the regulation of the securities market since
1992 in conjunction with overall economic and financial reforms. In 1992, the
SEBI Act was enacted giving SEBI statutory status as an apex regulatory body.
And a series of reforms was introduced to improve investor protection, automation
of stock trading, integration of national markets, and efficiency of market
operations. India has seen a tremendous change in the secondary market for equity.
Among the processes that have already started and are soon to be fully
implemented are electronic settlement trade and exchange-traded derivatives.
Before 1995, markets in India used open outcry, a trading process in which traders
shouted and hand signaled from within a pit. One major policy initiated by SEBI
from 1993 involved the shift of all exchanges to screen-based trading, motivated
primarily by the need for greater transparency.

The first exchange to be based on an open electronic limit order book was the
National Stock Exchange (NSE), which started trading debt instruments in June
1994 and equity in November 1994. In March 1995, BSE shifted from open outcry
to a limit order book market. Before 1994, India’s stock markets were dominated
by BSE. In other parts of the country, the financial industry did not have equal
access to markets and was unable to participate in forming prices compared
with market participants in Mumbai (Bombay). As a result, the prices in markets
outside Mumbai were often different from prices in Mumbai. These pricing errors
limited order flow to these markets. Explicit nationwide connectivity and implicit
movement toward one national market has changed this situation. NSE has
established satellite communications which give all trading members of NSE equal

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access to the market. Similarly, BSE and the Delhi Stock Exchange are both
expanding the number of trading terminals located all over the country.
The arbitrages are eliminating pricing discrepancies between markets.
The Indian capital market still faces many challenges if it is to promote more
efficient allocation and mobilization of capital in the economy.

DEFINITION OF MERCHANT BANKING

“A merchant bank is a defined as a financial institution or an organization that

underwrites corporate securities and advice such clients on issue like corporate
mergers etc involved in the ownership of commercial venture, etc. this

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organization may be bank corporate body, a firm or a priority concern” Merchant
banking in India started with management of public issues and loan syndication
and has been slowly and gradually covering activities like “project counseling”,
“portfolio management” and mergers and amalgamation of corporate firm.

A merchant banker has been defined under the securities and 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 securities as manager, consultant, advisor or rendering corporate
advisory service in relation to such issue management.

ORIGIN OF MERCHANT BANKING

The origin of merchant banking is to be traced to Italy in late medieval times and
France during the seventeenth and eighteenth centuries. The Italian merchant
bankers introduced into England not only the bill of exchange but also all the
institutions and techniques connected with an organized money market during
seventeenth and eighteenth centuries.
In France a merchant banker (le merchant banquet) was not merely a trader but an
entrepreneur par excellence. He invested his accumulated profits in all forms of
promising activities. He added banking business to his merchant activities and
became a merchant banker.

Money changer and exchanger

In the late medieval to early modern times distinction existed in banking system
between money changer and exchanger. Money changers concentrated on the
manual change of different currencies operated locally and later accepted deposits
for security reasons. In course of time, money changers evolved into public or
deposit banks. International exchangers engaged in bill-broking, raising foreign
exchange and provision of long term capital for public borrowers. The exchangers
were remitters and merchant bankers. During this period merchant banker was a
dealer in bills of exchange who operated with correspondent abroad and speculated
on the rate of exchange. Initially, merchant banks were not banks at all and a

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distinction was drawn between banks, merchant banks and other financial
institutions. Among all these institutions, it was only banks that accepted
deposits from public
.

Merchant banks in the United Kingdom

In the United Kingdom, merchant's banks came into operation in the late
eighteenth century and early nineteenth century. Industrial revolution made
England into a powerful trading nation. Rich merchant houses that made their
fortunes in colonial trade diversified into banking. Their principal activity started
with the acceptance of commercial bills pertaining to domestic as well as
international trade. The acceptance of the trade bills and discounting gave rise to
acceptances houses, discount houses and issue houses. Merchant banker was
primarily a merchant rather than a banker but he was entrusted with funds by
his customers. The term merchant bank is used to denote banks that are not
merchants. Sometimes for merchants who are not bankers and sometimes for
business houses that are neither merchants nor banks. These confusions emerge
because of a wide range of activities carried out by modern merchants.

The merchants provide various services, like:

• Finance foreign trade
• Issue capital
• Manage individual funds
• Undertake foreign security business
• foreign loan business
Sometimes, finance sovereign government through granting long terms loans and
also British government for purchasing shares of Suez Canal.

Since the end of the Second World War, commercial banks in Western Europe
have been offering multiple services including merchant banking services to their
individuals and corporate clients. British banks set up divisions or subsidiaries to
offer their customers merchant banking services.

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Merchant Banking in India

Merchant banking activity was formally initiated into the Indian capital Markets
when Grind lays bank received the license from reserve bank in 1967. Grind lays
started with management of capital issues, recognized the needs of emerging class
of entrepreneurs for diverse financial services ranging from production planning
and system design to market research. Even it provides management consulting
services to meet the requirements of small and medium sector rather than large
sector. Citibank Setup its merchant banking division in 1970. The various tasks
performed by this divisions namely assisting new entrepreneur, evaluating new
projects, raising funds through borrowing and issuing equity. Indian banks Started
banking Services as a part of multiple services they offer to their clients from
1972. State bank of India started the merchant banking division in 1972. In the
Initial years the SBI's objective was to render corporate advice And Assistance to
small and medium entrepreneurs. Merchant banking activities is of course
organized and undertaken in several forms. Commercial banks and foreign
development finance institutions have organized them through formation divisions,
nationalized banks
have formed subsidiaries companies and share brokers and consultancies
constituted themselves into public limited companies or registered themselves as
private limited companies. Some merchant banking outfits have entered into
collaboration with merchant bankers abroad with several branches.

Growth of merchant banking in India

Merchant baking activities in India originated in 1969 with the merchant banking
division set up by the grind lay bank, the largest foreign bank in the country, at the
time. The main service offer to the corporate enterprises by the merchant bank
includes management public issue and financial consultancy. Other forcing bank
like city bank, chartered bank also assumed the merchant banking activity in India.
State bank of India started merchant banking in 1973 followed by the ICICI
in1974; both emerged as leader in merchant banking with significance business
during the period of 1974-1985 in comparison to forcing banks. Mid seventies
witnessed a growth of merchant banking organization in the country with various

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commercial banks, financial institutions, broker firms entering in to the field of
merchant banking.

The growth in merchant banking business during the early seventies was to forcing
exchange regulation act 1973 [ FERA] where in large number of forcing
companies operating in India were required to dilute their foreign holdings In order
to continue business in the country his result in expansion in the capital markets
providing enough opportunities to merchant bankers to established themselves.
The change in Indian economy opened new doors for merchant banking business
enter in diversified area of activities, but at the same time this brought competition
in merchant banking sector. This sector has traditionally been dominated by
financial institution, banks and their subsidiaries. Now, various private sectors
merchant bankers have emerged and some of them having international reputation.
Till the end of 1990, the merchant banking sector was almost monopoly public
sector institution and commercial banks, however since
1991 considerable number of private merchant banker have emerged on same.
Various existing corporate entities and non-banking finance companies have also
focused their activities in merchant banking business. Before 1990 there were less
than 40 merchant banking concerns while in 199 this number has exceeded to
more than 400 firms.

IMPORTANCE AND NEED OF MERCHANT BANK IN INDIA

Importance reasons for the growth of merchant banks has been development
activities throughout the country, exerting excess demand on the sources of fund

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for ever expanding industries and trade, thus leaving a widening gap unabridged
between the supply and demand of invisible funds. All India financial institution
had experienced constrain of resources to meet ever increasing demands for
demands for funds frame corporate sector enterprises. In such circumstances
corporate sector had the only alternative to avail of the capital market service for
meeting their long term financial requirement through capital issue of equity
shares and debentures. Growing demand for funds put pressure on capital market
that enthused commercial banks, share brokers and financial consultancy firms to
enter into the field of merchant banking and share the growing capital market. As a
result all the commercial banks in nationalized and public sector as well as in
private sector including foreign banks in India have opened their merchant banking
windows and competing in this field.

Need for merchant banking is felt in the wake of huge public saving lying
untapped. Merchant banker can play highly significant role in mobilizing funds of
savers to invisible channels assuring promising returns on investment and thus can
assist in meeting the widening demand for invisible funds for economic activity.
With growth of merchant banking profession corporate enterprises in both private
sectors would be able to raise required amount of funds annually from the capital
market to meet the growing requirement for funds for establishing new enterprises,
undertaking expansion, modernization and diversification of the existing
enterprises. This reinforces the need for a vigorous role to be played by merchant
banking.

In view of multitude of enactment, rules and regulation, gridlines and offshoot

press release instructions brought out the government from time to time imposing
statutory obligations upon the corporate sector to comply with those entire
requirement prescribed there in the need of a skilled agency existed which could
provide counseling in these matters in a package form. A merchant banker with
their skills updated information and knowledge provide this service to the
corporate units and advice them on such requirement to be complied with for
raising funds from the capital market under different enactment viz. companies act,
income tax act, foreign exchange regulation act, securities contracts corporate laws
and regulations. Merchant bank advice the investors of the incentives available in
the form of tax relief, other statutory relaxation, good return on investment and

17
capital appreciation in such investment to motivate them to invest their savings
securities of the corporate sector. Thus merchant banks help industries and trade to
rise and the investors to invest their saved money in sound and healthy concern
with confidence, safety and expectation for higher yields. Finance is the backbone
of business activities. Merchant banker make available finance for business
enterprises acting as intermediaries between them raising demand for funds and
the supplies of funds besides rendering various other services.

The following are some of the reasons why specialist merchant bank have a crucial
role to play in India.

1. Growing complexity in rules and procedures of the government.

2. Growing industrialization and increase of technologically advanced industries.
3. Need for encouragement of small and medium industrialists, who require
specialist services.
4. Need to develop backward areas and states which require different criteria.
5. Exploring the possibility of joint ventures abroad and foreign market.
6. Promoting the role of new issue market in mobilizing saving from.

Where merchant banks function as an independent wing or as subsidiary of various

Private/central governments/ state government financial institution. Most of the
financial institution in India is in public sector and therefore such setup plays a role
on the lines of governmental priorities and policies.

Merchant Bankers in India:

There are 135 Merchant bankers who are registered with SEBI now in India. There
are public sector, Private sector and foreign players registered with SEBI. The

18
below are the examples of few of the Merchant bankers in each of the Public,
private and foreign players.

Public sector Merchant Bankers:

· SBI CAPITAL MARKETS LTD

· PUNJAB NATIONAL BANK
· BANK OF MAHARASHTRA
· IFCI FINANCIAL SERVICES LTD
· KARUR VYSYA BANK LTD,
· STATE BANK OF BIKANER AND JAIPUR

Private Sector Merchant Bankers:

· ICICI SECURITIES LTD

· AXIS BANK LTD.(FORMERLY UTI BANK LTD.)
· BAJAJ CAPITAL LTD
· TATA CAPITAL MARKETS LTD
· ICICI BANK LTD
· RELIANCE SECURITIES LIMITED
· KOTAK MAHINDRA CAPITAL COMPANY LTD
· YES BANK LTD.

Foreign Players in Merchant Banking:

· GOLDMAN SACHS (INDIA) SECURITIES PVT. LTD.

· MORGAN STANLEY INDIA COMPANY PVT LTD
· BARCLAYS SECURITIES (INDIA) PVT. LTD
· BANK OF AMERICA, N.A
· DEUTSCHE BANK
· DEUTSCHE EQUITIES INDIA PRIVATE LIMITED
· BARCLAYS BANK PLC
· CITIGROUP GLOBAL MARKETS INDIA PVT. LTD.
· DSP MERRILL LYNCH LTD
· FEDEX SECURITIES LTD

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Organizational set up of Merchant Bankers in India

In India a common organizational set up of merchant bankers to operate is in the

form of divisions of Indian and Foreign banks and Financial institutions,
subsidiary companies established by bankers like SBI, Canada Bank, Punjab
National Bank, Bank of India, etc. some firms are also organized by financial and
technical consultants and professionals. Securities and exchanges Board of India
has divided the merchant bankers into four categories based on their capital
adequacy. Each category is authorized to perform certain functions. From the point
of Organizational set up India’s merchant banking organizations can be
categorized into 4 group on the basis of their linkage with parent activity. They
are:

Institutional Base :-

Where merchant banks function as an independent wing or a subsidiary of various

Private/ Central Governments/State Governments Financial institutions. Most of
the financial institutions in India are in public sector and therefore such set up
plays a role on the lines of governmental priorities and policies.

Banker Base :-

These merchant bankers function as division/ subsidiary of banking organization.

The parent banks are either nationalized commercial banks or the foreign banks
operating in India. These organizations have brought professionalism in merchant
banking sector and they help their parent organization to make a presence in
capital market.

Broker Base

In the recent past there has been an inflow of Qualified and professionally skilled
brokers in various Stock Exchanges of India. These brokers undertake merchant
baking related operating also like providing investment and portfolio management
services.

Private Base

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These merchant banking firms are originated in private sectors. These
organizations are the outcome of opportunities and scope in merchant banking
business and they are providing skill oriented specialized services to their clients.
Some foreign merchant bankers are also entering either independently or through
some collaboration with their Indian counterparts. Private Sectors merchant
banking firms have come up either as sole proprietorship, partnership, private
limited or public limited companies. Many of these firms were in existence for
quite some time before they added a new activity in the form of merchant banking
services by opening new division on the lines of commercial banks and All India
Financial Institution (AIFI).

FUNCTION OF MERCHANT BANK

The services of merchant bank cover project counseling, pre investment activities,

21
feasibility studies, project reports, design of capital structure, issue management,
underwriting, loan syndication, mobilization of funds, foreign currency finance,
mergers, amalgamation, takeover, venture capital and public deposits. Merchant
banking is skill based activities and involves serving financial need of every client.
Merchant bankers can turn to any of the activities depending upon resources, such
as capital, foreign tie-ups for overseas activities and skills.

The depth and sophistication in merchant banking business are improving since the
avenues for raising funds are widening and demands for funds is increasing.

• Project Counseling:

Project counseling includes preparation of project reports, deciding upon the

financing pattern to finance the cost of the project and appraising the project report
with the financial institutions or banks. It also includes filling up of application
forms with relevant information for obtaining funds from financial institutions and
obtaining government approval.

• Management of debt and equity offerings

This forms the main function of the merchant banker. He assists the companies in
raising funds from the market. The main areas of work in this regard include:
instrument designing, pricing the issue, registration of the offer document,
underwriting support, and marketing of the issue, allotment and refund, listing on
stock exchanges.

• Issue Management:

Management of issue involves marketing of corporate securities viz. equity shares,

preference shares and debentures or bonds by offering them to public. Merchant
banks act as an intermediary whose main job is to transfer capital from those who
own it to those who need it. After taking action as per SEBI guidelines, the
merchant banker arranges a meeting with company representatives and advertising
agents to finalize arrangements relating to date of opening and closing of issue,
registration of prospectus, launching publicity campaign and fixing date of board

22
meeting to approve and sign prospectus and pass the necessary resolutions. Pricing
of issues is done by the companies in consultant with the merchant bankers.

• Managers, Consultants or Advisers to the Issue:

The managers to the issue assist in the drafting of prospectus, application forms
and completion of formalities under the Companies Act, appointment of Registrar
for dealing with share applications and transfer and listing of shares of the
company on the stock exchange. Companies can appoint one or more agencies as
managers to the issue.

• Underwriting of Public Issue:

Underwriting is a guarantee given by the underwriter that in the event of under

subscription, the amount underwritten would be subscribed by him.
Banks/Merchant banking subsidiaries cannot underwrite more than 15% of any
issue.

• Portfolio Management:

Portfolio refers to investment in different kinds of securities such as shares,

debentures or bonds issued by different companies and government securities.
Portfolio management refers to maintaining proper combinations of securities in a
manner that they give maximum return with minimum risk.

• Restructuring strategies

A merger is a combination of two companies into a single company where one

survives and other loses its corporate existence. A takeover is the purchase by one
company acquiring controlling interest in the share capital of another existing
company. Merchant bankers are the middlemen in setting negotiation between the
two companies. Merchant bankers assist the management of the client company to
successfully restructure various activities, which include mergers and acquisitions,
divestitures, management buyouts, joint venture among others. To help companies
achieve the objectives of these restructuring strategies, the merchant banker

23
participates in different activities at various stages which include understanding the
objectives behind the strategy (objectives could be either to obtain financial,
marketing, or production benefits), and help in searching for the right partner in
the strategic decision and financial valuation of the proposal.

• Off Shore Finance:

The merchant bankers help their clients in the following areas involving foreign
currency.

(a) Long term foreign currency loans

(b) Joint Ventures abroad
(c) Financing exports and imports
(d) Foreign collaboration arrangements

• Non-resident Investment:

The services of merchant banker includes investment advisory services to NRI in

terms of identification of investment opportunities, selection of securities,
investment management, and operational services like purchase and sale of
securities.
• Loan Syndication:

Loan syndication refers to assistance rendered by merchant bankers to get mainly

term loans for projects. Such loans may be obtained from a single development
finance institution or a syndicate or consortium. Merchant bankers help corporate
clients to raise syndicated loans from banks or financial institutions.

• Corporate Counseling and advisory services:

Corporate counseling covers the entire field of merchant banking activities viz.
project counseling, capital restructuring, public issue management, loan
syndication, working capital, fixed deposit, lease financing acceptance credit, etc.
Merchant bankers also offer customized solutions to their client’s financial
problems. Like determining the right debt-equity ratio and gearing ratio for the

24
client; the appropriate capital structure theory is also framed. Merchant bankers
also explore the refinancing alternatives of the client, and evaluate cheaper sources
of funds. Another area of advice is rehabilitation and turnaround
management. In case of sick units, merchant bankers may design a revival package
in coordination with banks and financial institutions. Risk management is another
area where advice from a merchant banker is sought. He advises the client on
different hedging strategies and suggests the appropriate strategy.

• Placement and distribution

The merchant banker helps in distributing various securities like equity shares,
debt instruments, mutual fund products, fixed deposits, insurance products,
commercial paper to name a few. The distribution network of the merchant banker
can be classified as institutional and retail in nature. The institutional network
consists of mutual funds, foreign institutional investors, private equity funds,
pension funds, financial institutions etc. The size of such a network represents the
wholesale reach of the merchant banker. The retail network depends on
networking with investors.

ROLE OF MERCHANT BANKER IN ISSUE MANAGEMENT

25
Merchant banker is the intermediary appointed by companies in the primary
market issue. It has to look at the entire issue management and work as the
Manager to the Public Issue.

Principal steps that Merchant bankers have to perform in a bringing up a Public

issue are as follows :

Vetting of Prospects: The prospectus is a document to communicate information

about the company and the proposed security issue to the investing public. The
draft prospectus containing the disclosures has to be vetted by SEBI before a
public issue is made.

Appointment of Underwriters: An underwriter agrees to subscribe to a given

number of shares in the event the public do not subscribe to them. The underwriter,
in essence, stands guarantee for public subscription in consideration for the
underwriting commission.

Appointment of bankers: The bankers to the issue collect money on behalf of the
company from the applicants.

Appointment of Registrars: The registrars to issue perform a series of tasks from

the time the subscription is closed to the time the allotment is made.

Appointment of Brokers and Principal Brokers: The brokers to the issue

facilitate its subscription. Filing of the Prospectus with the Registrar of Companies

Printing and dispatch of prospectus and application form: After the prospectus
is filed with the Registrar of Companies, the company should print the prospectus
and the application form.

Filing of Initial Listing Application: Within ten days of filing the prospectus, the
initial listing application must be made to the concerned stock exchanges, along
with the initial listing fees.

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Promotion of the Issue: The promotional campaign typically commences with the
filing of the prospectus with the Registrar of Companies and ends with the release
of the statutory announcement of the issue.

Statutory Announcement: The statutory announcement of the issue must be

made after seeking the approval of the lead stock exchange. This must be
published at least ten days before the opening of the subscription list.

Collection of Applications: The statutory announcement (as well as the

prospectus) specifies when the subscription would open when it would close, and
the banks where the applications can be made.

Processing of Applications: The application forms received by the bankers are

transmitted to the registrars to the issue for processing.

Establishing the Liability Underwriters: If the issue is undersubscribed, the

liability of the underwriters has to be established.

Allotment of Shares: If the issue is under-subscribed or just fully subscribed, the

company may allot shares applied for by the applicants after securing the formal
approval of the concerned stock exchanges(s)

Listing of the Issue: The detailed listing application should be submitted to the
concerned stock exchanges along with the listing agreement and the listing fee.

Costs of Public Issue: The cost of public issue is normally between 8 and 12 per
cent depending on the size of the issue and the level of marketing effort. The
important expenses incurred for a public issue are Underwriting Expenses,
Brokerage, Fees to the Managers of the Issue, Fees for Registrars to the Issue,
Printing Expenses, Postage Expenses, Advertising and Publicity Expenses, Listing
fees, Stamp duty. In addition to the above procedural matter, the most important
issue relates to the pricing of the issue. The merchant banker has to see that the
issue is priced properly.

MANAGEMENT OF CAPITAL ISSUE

27
The capital issue are managed are category-1 merchant banker and constitutes the
most important aspects of their services. The public issue of corporate securities
involves marketing of capital issues of new and existing companies, additional
issues of existing companies including rights issue and dilution of shares by letter
of offer,. The public issues are managed by the involvement of various agencies
i.e. underwriters, brokers, bankers, advertising agency, printers, auditors, legal
advisers, registrar to the issue and merchant bankers providing specialized services
to make the issue of the success. However merchant banker is the agency at the
apex level than that plan, coordinate and control the entire issue activity and direct
different agencies to contribute to the successful marketing of securities. The
procedure of the managing a public issue by a merchant banker is divided into two
phases, viz;
(A) Pre-issue management
(B) Post-issue management

Pre-Issue Management:-

Steps required to be taken to manage pre-issue activity is as follows:-

(1) Obtaining stock exchange approvals to memorandum and articles

of associations.
(2) Taking action as per SEBI guide lines
(3) Finalizing the appointments of the following agencies:
· Co-manager/Advisers to the issue
· Underwriters to the issue
· Brokers to the issue
· Bankers to the issue and refund Banker
· Advertising agency
· Printers and Registrar to the issue
(4) Advise the company to appoint auditors, legal advisers and broad base Board
of Directors
(5) Drafting of prospectus
(6) Obtaining approvals of draft prospectus from the company’s legal advisers,
underwriting financial institutions/Banks

28
(7) Obtaining consent from parties and agencies acting for the issue to be enclosed
with the prospectus.
(8) Approval of prospectus from Securities and Exchange Board of India.
(9) Filing of the prospectus with Registrar of Companies.
(10) Making an application for enlistment with Stock Exchange along, with copy
of the prospectus.
(11) Publicity of the issue with advertisement and conferences.
(12) Open subscription list.

Post-issue Management:-

Steps involved in post-issue management are:-

(1) To verify and confirm that the issue is subscribed to the extent of 90%
including devolvement from underwriters in case of under subscription
(2) To supervise and co-ordinate the allotment procedure of registrar to the issue as
per prescribed Stock Exchange guidelines
(3) To ensure issue of refund order, allotment letters / certificates within the
prescribed time limit of10 weeks after the closure of subscription list
(4) To report periodically to SEBI about the progress in the matters related to
allotment and refunds
(5) To ensure he listing of securities at Stock Exchanges.
(6) To attend the investors grievances regarding the public issue The Merchant
Bankers for managing public issue can negotiate a fee subject to a ceiling. This fee
is to be shared by all lead managers, advisers etc.
0.5% of the amount of public issues up to Rs.25 crores 0.2% of the amount
exceeding Rs.25crores, if more than one Merchant bankers are managing the issue.

REGULATORY FRAMEWORK OF MERCHANT BANK

29
The merchant banker's regulations, which regulate the raising of funds in the
primary market, would assure for the issuer market for raising resources at low
cost, effectively and easily, ensure high degree of protection of investors interest.
The regulations provide for the merchant bankers a dynamic and competitive
market with the high standard of professional competence, dignity, integrity and
solvency. The regulations promote a primary market, which is fair, efficient, and
flexible, and inspire confidence.

It is mandatory for a merchant banker to register with the SEBI. Without holding a
certificate of registration granted by the Securities and Exchange Board of India,
no person can act as a merchant banker in India.

1) Only a body corporate other than a non-banking financial company shall be

eligible to get registration as merchant banker.
2) The applicant should not carry on any business other than those connected with
the Securities market.
3) All applicants for Merchant Bankers should have qualification in Finance, law
or Business Management.
4) The applicant should have infrastructure like office space, equipment,
manpower etc.
5) The applicant must have at least two employees with prior experience in
merchant banking.
6) Any associate company, group company, subsidiary or interconnected company
of the applicant should not have been a registered merchant banker
7) The applicant should not have been involved in any securities scam or proved
guilt for any offence
8) The applicant should have a minimum net worth of Rs.5 Crores.

The various categories for which registration can be obtained are:

30
1) Category I – to carry on the activity of issue management and to act as adviser,
consultant, manager, underwriter, portfolio manager.
2) Category II - to act as adviser, consultant, co-manager, underwriter, portfolio
manager.
3) Category III - to act as underwriter, adviser or consultant to an issue
4) Category IV – to act only as adviser or consultant to an issue

The capital requirement for carrying on activity as merchant banker:

The capital requirement depends upon the category. The minimum net worth
requirement for acting as merchant banker is given below:
Category I – Rs. 5 crores
Category II – Rs, 50 lakhs
Category III – Rs. 20 lakhs
Category IV – Nil

Procedure for getting registration:

An application should be submitted to SEBI in Form A of the SEBI (Merchant
Bankers) Regulations, 1992. SEBI shall consider the application and on being
satisfied, issues a certificate of registration in Form B of the SEBI (Merchant
Bankers) Regulations, 1992.

Registration fee payable to SEBI:

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.

Penalties Levied by SEBI on Merchant Bankers

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The Securities and Exchange Board of India (SEBI) notifies regulations pertaining
to the procedure of holding enquiries and imposing penalties on Merchant
Bankers. SEBI can appoint enquiry officers, can the officer will also be able to
impose the penalty on which the SEBI chairman will give the final verdict. The
regulations to be called Securities and Exchange Board of India (Procedures for
Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations (2002 )
will cover not just merchant bankers but all market intermediaries like portfolio
managers, registrars and share transfer agents, underwriters, debenture trustees,
bankers to an issue, foreign institutional Investors, custodians, depository
participants, venture capital funds, mutual funds, collective investment schemes
(CIS) and foreign venture capital investors and bring them under the ambit of
SEBI.

According to the notification, the penalty an enquiry officer can impose will be
both minor and major.

• Among the minor penalties, the enquiry officer can issue warnings or
censure, prohibit the intermediary from taking up new assignments or
launch a new scheme for a period of six months. It can also debar a partner
or a whole time director of the intermediary from carrying out activities as
an intermediary in the firm or company, and other capital market-related
institutions for a period of six months. It can also suspend the certificate of
registration for a period up to three months.
• Among the major penalties an enquiry officer can impose the cancellation of
certificate of registration and suspension of certificate of registration.

However, the regulations says that no order under these regulations shall be passed
excepting after holding an enquiry by an officer. To implement these regulations,
SEBI has amended regulations pertaining to various intermediaries and some of its
regulations like Insider Trading Regulations, SEBI (Prohibition of Fraudulent and
Unfair Trade Practices relating to Securities Market) Regulations and Takeover
Code Regulations.

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Procedure for Inspection:

SEBI may inspect books of accounts, records and documents of merchant bankers
to ensure that the books of accounts are maintained in the required manner, that the
provisions act rules, regulations are compiled with, to investigate complaints
against the merchant banker and to investigate suomoto in the interest of securities
business or investors interest in to the affairs of Merchant banker. SEBI may either
give a reasonable notice or undertake inspection without notice in the interest of
investors.

The findings of the inspection report are communicated to merchant banker. SEBI
may appoint a qualified auditor to investigate in to the books of accounts or the
affairs of merchant banker.

Penalties of Non compliance of conditions for registration and contravention of the

provisions of the MB regulations include suspension or cancellation of
registration.

A penalty of suspension of registration of a merchant banker may be imposed

when:
 The merchant banker violates the provisions of act, rules or regulations
 The merchant banker:
• Fails to furnish any information relating to his activities as
merchant banker as required by the board.
• Furnished wrong or false information
• Does not submit periodical returns, as required by the board
• . Does not cooperate in any enquiry conducted by the board.
 The merchant banker fails to resolve the complaints of the investors or fails
to give satisfactory reply to the Board in this behalf.
 The merchant banker indulges in manipulating or price rigging or
concerning activities.
 The merchant banker is guilty of misconduct or improper or un business
like or unprofessional conduct which is not in co ordinance with the code of
conduct specified in schedule 3

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  The merchant banker fails to maintain the capital adequacy requirement in
accordance with the provisions of regulation 7.
 The merchant banker fails to pay the fees
 The merchant banker violates the conditions of registration.
 The merchant banker does not carry out his obligations as specified in the
regulation.

Defaults of The merchant banker and penalty points

SEBI categorized defaults and the penalty points that they attract.
___________________________________________________________
Defaults penalty points
_________________________________________________________
1. General Defaults 1
2. Minor Defaults 2
3. Major Defaults 3
4. Serious Defaults 4
__________________________________________________________

General Defaults:
For the purpose of penalty point, the following activities fall under general default
and attract one penalty point.

 Non receipt of draft prospectus/letter of offer from the lead manager by

SEBI, before filing with registrar of companies/stock exchanges.
 Non receipt of inter se allocation of responsibilities of lead managers in an
issue by SEBI prior to the opening of the issue.
 Failure to ensure submission of certificate of minimum 90 % subscription to
the issue as required under Govt of India
 Failure to ensure publicizing of dispatch of refund orders, shares/Debentures
certificates, filing of listing application by the issuer as required under Govt
of India press notification.

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Minor Defaults:

The following activities fall under minor default and attract two penalty points.

 Advertisement, circular, broacher, press release and other issue related

materials not being in conformity with contents of the prospects.
 Exaggerated information or Information extraneous to the prospectus is
given by the associated merchant bankers in any press conference, Investor
conference, broker’s conference or other such conference /meet prior to the
issue for marketing of the issue arranged/participated by the merchant
banker.
 Failure to substantiate matters contained in highlights to the issue in the
prospectus.
 Violation of the Govt of India letter regarding advertisements on new
capital issues.
 Failure to exercise due diligence in verifying contents of prospectus/ letter
of offer
 . Failure to provide adequate and fair disclosure to investors and objective
information about risk factors in the prospectus and other issue literature
 Delay in refund/allotment of securities.
 Non-handling of investor grievances promptly.

Major defaults:

The following activities fall under major default and attract three penalty points.

 Mandatory underwriting not taken up by lead manager

 Excess number of lead managers than permissible under SEBI
 Association of unauthorized merchant banker in an Issue.

Serious Defaults:

35
The following activities fall under serious default and attract four penalty points.

 Unethical practice by merchant banker and/or violation of code of conduct.

 Non cooperation with SEBI in furnishing desired information documents,
evidence as may be called for.

A merchant banker on reaching the penalty points of eight (8) attracts action from
SEBI in terms of suspension/ cancellation of authorization.

To enable a merchant banker to take corrective action maximum penalty points

awarded in a single issue managed by a merchant banker are restricted to four (4)

In the event of joint responsibility same penalty point is awarded for all lead
managers jointly responsible for the activity. In the absence of receipt of inter se
allocation of responsibilities, all lead managers to the issue are awarded the
penalty point.
Defaults in prospectus:

If highlights are provided, the following deficiencies will attract negative points

1) Absence of risk factors in highlights.

2) Absence of listing in highlights.
3) Extraneous contents to prospectus, if stated in highlights.

The maximum grading points of prospectus will be 10 and prospectus scoring

greater than or equal to 8 points are categorized as A+, those with 6 or less than 8
as A, with 4-6 points as B, and score of less than 4 points, the prospectus falls in
category C.

General Negative Marks:

If at all "Highlights" are provided in an issue:

 Risk factors should form part of "Highlights", otherwise it will attract

36
 negative point of -1
 Listing details, should form of part of " Highlights", otherwise it will attract
negative point of -0.5
 Any matter extraneous to the contents of prospectus, if stated in highlights,
will attract negative point of -0.5

CODE OF CONDUCT FOR MERCHANT BANKERS

1. A Merchant Banker shall make all efforts to protect the interests of investors.
2. A Merchant Banker shall maintain high standards of integrity, dignity and
fairness in the conduct of its business.
3. A Merchant Banker shall fulfill its obligations in a prompt, ethical, and
professional manner.
4. A Merchant Banker shall at all times exercise due diligence, ensure proper care
and exercise independent professional judgment.
5. A Merchant Banker shall endeavor to ensure that
 Inquiries from investors are adequately dealt with;
 Grievances of investors are redressed in a timely and appropriate
manner;
 Where a complaint is not remedied promptly, the investor is
advised of any further steps Nwhich may be available to the
investor under the regulatory system.
6. A Merchant Banker shall ensure that adequate disclosures are made to the
investors in a timely manner in accordance with the applicable regulations and
guidelines so as to enable them to make a balanced and informed decision.
7. A Merchant Banker shall endeavor to ensure that the investors are provided with
true and adequate information without making any misleading or exaggerated
claims or any misrepresentation and are made aware of the attendant risks before
taking any investment decision.
8. A Merchant Banker shall endeavor to ensure that copies of the prospectus, offer
document, letter of offer or any other related literature is made available to the
investors at the time of issue or the offer.
9. A Merchant Banker shall not discriminate amongst its clients, save and except
on ethical and commercial considerations.

37
10. A Merchant Banker shall not make any statement, either oral or written, which
would misrepresent the services that the Merchant Banker is capable of performing
for any client or has rendered to any client.
11. A Merchant Banker shall avoid conflict of interest and make adequate
disclosure of its interest.
12. A Merchant Banker shall put in place a mechanism to resolve any conflict of
interest situation that may arise in the conduct of its business or where any conflict
of interest arises, shall take reasonable steps to resolve the same in an equitable
manner.
13. A Merchant Banker shall make appropriate disclosure to the client of its
possible source or potential areas of conflict of duties and interest while acting as
Merchant Banker which would impair its ability to render fair, objective and
unbiased services.
14. A Merchant Banker shall always endeavor to render the best possible advice to
the clients having regard to their needs.
15. A Merchant Banker shall not divulge to anybody either orally or in writing,
directly or indirectly, any confidential information about its clients which has
come to its knowledge, without taking prior permission of its clients, except where
such disclosures are required to be made in compliance with any law for the time
being in force.
16. A Merchant Banker shall ensure that any change in registration status / any
penal action taken by the Board or any material change in the Merchant Banker’s
financial status, which may adversely affect the interests of clients / investors is
promptly informed to the clients and any business remaining outstanding is
transferred to another registered intermediary in accordance with any instructions
of the affected clients.
17. A Merchant Banker shall not indulge in any unfair competition, such as
weaning away the clients on assurance of higher premium or advantageous offer
price or which is likely to harm the interests of other Merchant Bankers or
investors or is likely to place such other Merchant Bankers in a disadvantageous
position while competing for or executing any assignment.
18. A Merchant Banker shall maintain arms length relationship between its
merchant banking activity and any other activity.
19. A Merchant Banker shall have internal control procedures and financial and
operational capabilities which can be reasonably expected to protect its operations,

38
its clients, investors and other registered entities from financial loss arising from
theft, fraud, and other dishonest acts, professional misconduct or omissions.
20. A Merchant Banker shall not make untrue statement or suppress any material
fact in any documents, reports or information furnished to the Board.
21. A Merchant Banker shall maintain an appropriate level of knowledge and
competence and abide by the provisions of the Act, regulations made there under,
circulars and guidelines, which may be applicable and relevant to the activities
carried on by it. The merchant banker shall also comply with the award of the
Ombudsman passed under Securities and Exchange Board of India (Ombudsman)
Regulations, 2003.
22. A Merchant Banker shall ensure that the Board is promptly informed about any
action, legal proceedings etc., initiated against it in respect of material breach or
non compliance by it, of any law, rules, regulations, directions of the Board or of
any other regulatory body.
23. (a) A Merchant Banker or any of its employees shall not render, directly or
indirectly, any investment advice about any security in any publicly accessible
media, whether real-time or non real-time, unless a disclosure of his interest
including a long or short position, in the said security has been made, while
rendering such advice.
(b) In the event of an employee of the Merchant Banker rendering such advice, the
merchant banker shall ensure that such employee shall also disclose the interests, if
any, of himself, his dependent family members and the employer merchant banker,
including their long or short position in the said security, while rendering such
advice.
24. A Merchant Banker shall demarcate the responsibilities of the various
intermediaries appointed by it clearly so as to avoid any conflict or confusion in
their job description.
25. A Merchant Banker shall provide adequate freedom and powers to its
compliance officer for the effective discharge of the compliance officer’s duties.
26. A Merchant Banker shall develop its own internal code of conduct for
governing its internal operations and laying down its standards of appropriate
conduct for its employees and officers in carrying out their duties. Such a code
may extend to the maintenance of professional excellence and standards, integrity,
confidentiality, objectivity, avoidance or resolution of conflict of interests,
disclosure of shareholdings and interests etc.

39
27. A Merchant Banker shall ensure that good corporate policies and corporate
governance are in place.
28. A Merchant Banker shall ensure that any person it employs or appoints to
conduct business is fit and proper and otherwise qualified to act in the capacity so
employed or appointed (including having relevant professional training or
experience)
29. A Merchant Banker shall ensure that it has adequate resources to supervise
diligently and does supervise diligently persons employed or appointed by it in the
conduct of its business, in respect of dealings in securities market.
30. A Merchant Banker shall be responsible for the acts or omissions of its
employees and agents in respect of the conduct of its business.
31. A Merchant Banker shall ensure that the senior management, particularly
decision makers have access to all relevant information about the business on a
timely basis.
32. A Merchant Banker shall not be a party to or instrumental for –
 Creation of false market;
 Price rigging or manipulation or;
 Passing of unpublished price sensitive information in respect of securities
which are listed and proposed to be listed in any stock exchange to any
person or intermediary in the securities market.

SEBI Regulations for Merchant Bankers

Merchant Bankers have been barred from undertaking activities other than related
to the securities market. The SEBI (Merchant Bankers) Regulations, 1992 have
been amended on December 19, 1997 to provide that:

 The applicant should be a fit and proper person;

 A merchant banker has to seek separate registration for its underwriting or
portfolio management activities;
 The categorization of merchant bankers I, II, III and IV has been dispensed
with;
 A merchant banker, other than a bank or a public financial institution, has
been prohibited from carrying any activities not pertaining to the securities
market; and

40
  The applicant should be a body corporate other than non-banking finance
company.

The Merchant Bankers Regulations were amended on January 21, 1998 to provide
time up to June 30, 1998 to sever its activities or hive off its activities not
pertaining to the securities market. The Reserve Bank of India has exempted
merchant banking companies from the provisions of Reserve Bank of India Act,
1934 relating to compulsory registration (section 451A), maintenance of liquid
assets (section 451B), creation of reserve fund (section 451C ) and all the
provisions of the recent Directions relating to deposit acceptance and prudential
norms.

Merchant banking companies, to be eligible for the above exemption, are required
to satisfy the following conditions:
 such companies are registered with the SEBI under section 12 of the SEBI
Act, 1992 and are carrying on the business of merchant banker in
accordance with the Rules / Regulations framed by the SEBI;
 they acquire securities only as part of their merchant banking business;
 they do not carry on any other financial activities as mentioned in section
451 (c ) of the RBI Act, 1934;
 they do not accept / hold public deposits.

Maintenance of books of accounts, records etc.

(1)Every merchant banker shall keep and maintain the following books of
accounts, records and documents namely:-
(a) a copy of balance sheet as at the end of each accounting period;
(b) a copy of profit and loss account for that period;
(c) a copy of the auditor's report on the accounts for that period; and
(d) a statement of financial position.

(2) Every merchant banker shall intimate to the Board the place where the books of
accounts, records and documents are maintained.

41
(3) Without prejudice to sub- regulation (1), every merchant banker shall, after the
end of each accounting period furnish to the Board copies of the balance sheet,
profit and loss account and such other documents for any other preceding five
accounting years when required by the Board.

Submission of Half-yearly results

Every merchant banker shall furnish to the Board half-yearly unaudited financial
results when required by the Board with a view to monitor the capital adequacy of
the merchant banker.

Maintenance of books of account, records and other documents

The merchant banker shall preserve the books of accounts and other records and
documents maintained under regulation 14 for a minimum period of five years.

Report on steps taken on Auditor's report

Every merchant banker shall within two months from the date of the auditors'
report take steps to rectify the deficiencies, made out in the auditor's report.

Appointment of lead merchant bankers

(1) All issues should be managed by at least one merchant banker functioning as
the lead merchant banker: Provided that, in an issue of offer of rights to the
existing members with or without the right of renunciation the amount of the issue
of the body corporate does not exceed rupees fifty lakhs, the appointment of a lead
merchant banker shall not be essential.
(2) Every lead merchant banker shall before taking up the assignment relating to
an issue, enter into an agreement with such body corporate setting out their mutual
rights, liabilities and obligations relating to such issue and in particular to
disclosures, allotment and refund.

Restriction on appointment of lead managers

The number of lead merchant bankers may not, exceed in case of any issue of Size
of issue No. of Merchant Bankers
(a) Less than rupees fifty crores-Two
(b) Rupees fifty crores but less than rupees one hundred crores-Three
(c) Rupees one hundred crores but less than rupees two hundred crores-Four

42
 (d) Rupees two hundred crores but less than rupees four hundred crores-Five
(e) Above Rupees four hundred crores five or more as may be agreed by the
board

Responsibilities of lead managers

 No lead manager shall agree to manage or be associated with any issue
unless his responsibilities relating to the issue mainly, those of disclosures,
allotment and refund are clearly defined, allocated and determined and a
statement specifying such responsibilities is furnished to the Board at least
one month before the opening of the issue for subscription: Provided that,
where there are more than one lead merchant bankers to the issue the
responsibilities of each of such lead merchant banker shall clearly be
demarcated and a statement specifying such responsibilities shall be
furnished to the Board at least one month before the opening of the issue for
subscription.

 No lead merchant banker shall, agree to manage the issue made by any body
corporate, if such body corporate is an associate of the lead merchant
banker.

Lead merchant banker not to associate with a merchant banker without

registration

A lead merchant banker shall not be associated with any issue if a merchant banker
who is not holding a certificate is associated with the issue.

Underwriting obligations
(1) In respect of every issue to be managed, the lead merchant banker holding a
certificate under Category I shall accept a minimum Underwriting obligation of
five percent of the total underwriting commitment or rupees twenty-five lakhs,
whichever is less: Provided that, if the lead merchant banker is unable to accept the

43
minimum underwriting obligation, that lead merchant banker shall make
arrangement for having the issue underwritten to that extent by a merchant banker
associated with the issue and shall
keep the Board informed of such arrangement.

Submission of due diligence certificate

The lead merchant banker, who is responsible for verification of the contents of a
prospectus or the Letter of Offer in respect of an issue and the reasonableness of
the views expressed therein, shall submit to the Board at least two weeks prior to
the opening of the issue for subscription, a due diligence certificate in Form C.

Documents to be furnished to the Board

(1) The lead manager responsible for the issue shall furnish to the Board, the
following documents, namely: -
(i) particulars of the issue;
(ii) draft prospectus or where there is an offer to the existing shareholders, the
draft letter of offer;
(iii) any other literature intended to be circulated to the investors, including the
shareholders; and
(iv) such other documents relating to prospectus or letter of offer as the case
may be.

(2) The documents referred to in sub-regulation (1) shall be furnished at least two
weeks prior to date of filing of the draft prospectus or the letter of offer, as the case
may be, with the Registrar of Companies or with the Regional Stock Exchanges, or
with both.

(3) The lead manager shall ensure that the modifications and suggestions, if any,
made by the Board on the draft prospectus or the Letter of Offer as the case may
be, with respect to information to be given to the investors are incorporated
therein.

Payment of fees to the Board

44
The draft prospectus or draft letter of offer referred to in regulation 24 shall be
submitted along with such fees and in such manner as may be specified in
Schedule IV]

Continuance of association of lead manager with an issue

The lead manager undertaking the responsibility for refunds or allotment of
securities in respect of any issue shall continue to be associated with the issue till
the subscribers have received the share or debenture certificates or refund of
excess application money;

Provided that where a person other than the lead manager is entrusted with the
refund or allotment of securities in respect of any issue, the lead manager shall
continue to be responsible for ensuring that such other person discharges the
requisite responsibilities in accordance with the provisions of the Companies Act
and the listing agreement entered into by the body corporate with the stock-
exchange.

Acquisition of shares prohibited

No merchant banker or any of its directors, partner or manager or principal officer
shall either on their respective accounts or through their associates or relatives
enter into any transaction in securities of bodies corporate on the basis of
unpublished price sensitive information obtained by them during the course of any
professional assignment either from the clients or otherwise.

Information to the Board

Every merchant banker shall submit to the Board complete particulars of any
transaction for acquisition of securities of anybody corporate whose issue is being
managed by that merchant banker within fifteen days from the date of entering into
such transaction.
Disclosures to the Board
A merchant banker shall disclose to the Board as and when required, the following
information, namely:
(i) his responsibilities with regard to the management of the issue;
(ii) any change in the information or particulars previously furnished,
which have a bearing on the certificate granted to it;

45
 (iii) the names of the body corporate whose issues he has managed or has
been associated with;
(iv) the particulars relating to breach of the capital adequacy requirement as
specified in regulation 7;
(v) relating to his activities as a manager, underwriter, consultant or adviser
to an issue as the case is.

Appointment of compliance officer

(1) Every merchant banker shall appoint a compliance officer who shall be
responsible for monitoring the compliance of the Act, rules and regulations,
notifications, guidelines, instructions etc., issued by the Board or the Central
Government and for redressed of investors’ grievances.
(2) The compliance officer shall immediately and independently report to the
Board any non-compliance observed by him and ensure that the observations made
or deficiencies pointed out by the Board on \ in the draft prospectus or the Letter of
offer as the case may be, do not recur.

Scope for growth of Merchant Banking in India

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. The areas of great scope could be,

Growth of Primary market:

46
If the primary market grows and number of issues increases, the scope of merchant
banking will be enhanced.

Entry of Foreign Investors:

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.

Changing policy of Financial Institutions:

Now the lending policies of financial institutions are based on project orientation,
So the merchant banker services will be needed by corporate enterprise to provide
expert guidance.

Development of debt markets:

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:
Due to liberalization and globalization Companies are facing lot of competition. In
order to compete, they have to go for restructuring, merger, acquisitions or
disinvestments. They may offer good opportunities to merchant bankers

The scope could be extended to

1. Advising the company on designing of its Capital Structure.
2. Advising the company on the instrument to be offered to the public.
3. Pricing of the instrument.
4. Advising the company on Legal/ regulatory matters and interaction with
SEBI/ ROC/ Stock
5. Exchanges and other regulatory authorities.
6. Assisting the company in marketing the issue.
7. In channelizing the financial surplus of the general public into productive
investment avenues.

47
 8. To coordinate the activities of various intermediaries to the share issue such as
the registrar, bankers, advertising agency, printers, underwriters, brokers etc.
9. To ensure the compliance with rules and regulations governing the securities
market

THE FACTORS ON WHICH GROWTH OF MERCHANT BANKING

DEPENDS:
1. Planning and industrial policy of the country i.e. India in this case
2. Prevailing Economic condition of the country
3. Regulatory system of the market and economy prevailing in India
4. Confidence of the people, traders, buyers, marketers, business houses, financial
institutions etc
5. The economic environment of the outside world.
6. Competition among the existing players and the upcoming entrants.

48
ICICI SECURITIES LTD.

ICICI Securities Ltd is the largest equity house in the country providing end-to-end
solutions (including web-based services) through the largest non-banking
distribution channel so as to fulfil all the diverse needs of retail and corporate
customers. ICICI Securities (I-Sec) has a dominant position in its core segments of
its operations - Corporate Finance including Equity Capital Markets Advisory
Services, Institutional Equities, Retail and Financial Product Distribution.

With a full-service portfolio, a roster of blue-chip clients and performance second

to none, we have a formidable reputation within the industry. Today ICICI
Securities is among the leading Financial Institutions both on the institutional as
well as retail side.

Headquartered in Mumbai, I-Sec operates out of several locations in India.

ICICI Securities Inc., the stepdown wholly owned US subsidiary of the company is
a member of the National Association of Securities Dealers, Inc. (NASD). As a
result of this membership, ICICI Securities Inc. can engage in permitted activities
in the U.S. securities markets. These activities include Dealing in Securities and
Corporate Advisory Services in the United States and providing research and
investment advice to US investors.

ICICI Securities Inc. is also registered with the Financial Services Authority, UK
(FSA) and the Monetary Authority of Singapore (MAS).

Board of Directors

49
 • Ms. Chanda Kochhar,Chairperson
• Mr. Uday Chitale
• Mr. Narendra Murkumbi
• Mr. Ketan Patel
• Mr. Sandeep Bakhshi
• Mr. Pravir Vohra
• Ms. Madhabi Puri-Buch, Managing Director & CEO
• Mr. A. Murugappan, Executive Director
• Mr. Anup Bagchi, Executive Director

OUR BUSINESS

 ICICI Securities is one of the leading investment banks in the domestic

equity capital markets and has been instrumental in pioneering numerous
innovative practices in the investment banking space.

The Corporate Finance practice offers Capital Market and Advisory services
in India and overseas. Our consistent ranking as one of the top Investment
Banks as per Prime Database league tables manifests our expertise in this
space.

With a single goal of `facilitating clients' success', ICICI Securities has been
influential in fund mobilisation for our clients who include corporations,
financial institutions, financial sponsors and government.
For the year ended March 31, 2010, ICICI Securities Ltd handled 16 issues
and raised INR 230 Billion covering 23% of the total domestic fund raising
activity in FY10.
ICICI Securities is a SEBI registered Category I Merchant Banker

50
 ICICI Securities has been at the forefront of capital markets advisory for
several decades and has also been involved in most of the major public
equity issuances in recent times. We are amongst the leading underwriters of
Indian equity and equity linked offerings with unparalleled execution
capabilities. We provide end-to-end fund raising solutions, from structuring
to placement of the equity instrument.

Our products include Initial Public Offerings (IPOs), Further Public

Offerings (FPOs), Rights Offerings, Convertible Offerings, Qualified
Institutional Placement (QIP), Non-convertible Debentures, Buyback,
Delisting, Open Offers and international offerings, for both, unlisted and
listed entities.

ICICI Securities has successfully managed public issues of companies

which were the first in their sector to tap the market - media both print and
television, first Govt. of India divestment IPO, first pure-play internet
company in India, first mobile VAS company, etc.

ICICI Securities was also involved in various pioneering issues in the Indian
capital markets - the first issue using the new alternate book-building
(French Auction) method (NTPC), the first issue of shares with Differential
Voting Rights (Tata Motors), the first public issue of Non-Convertible
Debentures (Tata Capital), the first delisting using the reverse book-building
mechanism (Hewlett-Packard), etc.

With offices across major financial centres (New York, Singapore, Mumbai
and Delhi), ICICI Securities delivers its products covering corporates and
investors across geographies.

Some of the key capital-market issues lead-managed by ICICI Securities in

FY10 were:
• Follow-on public offering (FPO) of NTPC - The first public issue to use the
auction route and the first fast-track FPO in the history of the Indian capital
markets;
• FPO of Rural Electrification Corporation Limited;
• Qualified Institutional Placement of Adhunik Metaliks, Lanco Infratech,
Network18, and Texmaco, Network18; and

51
 • IPO of Adani Power, Godrej Properties, JSW Energy, and Shree Ganesh
Jewellery

 ICICI Securities has a dedicated practice to assist companies with capital

mobilisation through the private equity / venture capital route across their
life-cycle.
We help companies to raise capital during the seed, growth and expansion
phases as well as acquisition financing, structuring the deal to maximize
value for all its stakeholders.

Our extensive industry knowledge across multiple sectors, wide-ranging

deal structuring capabilities and thorough grasp of the regulatory
environment make us the 'banker of choice', for companies and private
equity funds alike.

We have working relationships with all major private equity players, both in
India and abroad and can facilitate access for our clients to these investors.
We advice on a wide variety of products including mezzanine and private
equity financing, secondary sale transactions, pre-IPO deals and preferential
allotments by listed companies.
In the advisory space, some of the transactions advised by ICICI Securities
in FY10 included the following:

• Sole advisor to T. Rowe Price's acquisition of 26% stake in UTI Asset

Management Company
• Private equity advisory to PNB Housing Finance
• Private equity advisory to A2Z Maintenance and Engineering

Awards & Recognition

Institutional
• ICICI Securities is awarded as the Best Investment Bank 2008 by Global
Finance Magazine

52
 • The Corporate Finance group also was awarded a runner-up Best
Merchant Banker by Outlook Money in 2007.
• ICICI Securities (I-Sec) topped the Prime Database League Tables 2007
for money raised through IPOs/FPOs.
• The equities team was adjudged the 'Best Indian Brokerage House-2003'
by Asiamoney.
Retail
• Frost and Sullivan Award for Customer Service Leadership
• ICICIdirect wins the prestigious Outlook Money - India's Best e-
Brokerage House for 2009.
• ICICIdirect, the neighborhood financial superstore won the prestigious
Franchise India `Service Retailer of the Year 2008 award.
• ICICIdirect wins the prestigious Outlook Money - India's Best e-
Brokerage House for 2008.
• ICICIdirect been winning the prestigious Outlook Money - India's Best e-
Brokerage House for 2003-2004, 2004-2005, 2006-2007 and 2007-2008.
• ICICIdirect has also won the CNBC AWAAZ Consumer Award for the
Most Preferred Brand of Financial Advisory Services.
• Best Broker - Web 18 Genius of the Web Awards 2007
• Franchisor of the year award 2009
• Retail concept of the year awards 2009
Technology
• IDG India's CIO magazine has recognized ICICI Securities as a
recipient of 2009 CIO 100 award
• Indian Bank's Association Business Technology Awards for Best Online
Trading Platform in 2006 and 2007

Current Issues
Issuer Status
Adani Enterprise Limited Rights Issue

53
ADANI POWER LIMITED IPO
Adhunk Metaliks Ltd. QIP
Alok Industries Ltd QIP
Claris Lifesciences Ltd IPO
Commercial Engineers and Body Builders
IPO
Co. Ltd
D B Realty Limited IPO
Emaar MGF Land Limited IPO
Engineers India Limited FPO
Godrej Properties Ltd IPO
Gujarat State Petroleum Corporation Ltd IPO
ibn18 BROADCAST LIMITED Rights Issue
Infomedia 18 Ltd Rights Issue
Jaypee Infratech Limited IPO
Jindal Power Limited IPO
JSW ENERGY LIMITED IPO
JSW Energy Limited IPO
LANCO INFRATECH LIMITED QIP
Nitesh Estates Limited IPO
NTPC FPO
Parabolics Drugs Limited IPO
Reliance Infratel Ltd IPO
RURAL ELECTRIFICATION
FPO
CORPORATION LIMITED
Shree Ganesh Jewellery House Limited IPO
SHREE GANESH JEWELLERY HOUSE
IPO
LIMITED
Shriram Transport Finance Co. Ltd (April Non Convertible

54
2010) Debenture
Shriram Transport Finance Company Non Convertible
Limited Debenture
Standard Chartered PLC IDR
STERLITE ENERGY LIMITED IPO
Television Eighteen India Limited Rights Issue
Texmaco Ltd QIP

CONCLUSION

The merchant banking business has increased over a short period of time and with
continued economic reforms. However, a stiff competition exists in this line and
survival will depend upon the financial skills and spectrum of financial services
and instruments offered by the Merchant Banker. Hence, Merchant Banking
Service is taking shape for turbulent times.

Merchant banking is an activity initially undertaken by a few large commercial

banks in India, and it is now being adopted or undertaken by a few large
commercial banks in India, and it is now being adopted or undertaken by
practically every commercial bank through its Merchant Banking Department. The
range of activities covered under merchant banking very wide indeed. The
merchant banks offer a package of financial services. Unlike in the past, their
activities are now primarily non-fund based. Therefore, they do not require much
capital. One of the basic requirements of merchant banking is a highly professional
staff and worldwide contacts. Merchant banking is usually international in
character.

55
REFERENCES:

• www.ssrn.com

• www.scribd.com

• www.sebi.gov.in

• www.statebankofindia.com

• www.icicibank.com

• www.finance.indiamart.com

• www.wikipedia.com

• http://www.jstor.org/stable/4401268

56
APPENDIX-1

List of All Merchant Bankers Registered with SEBI

A.K. CAPITAL SERVICES LTD
ALLAHABAD BANK
ALLBANK FINANCE LTD.
ALMONDZ GLOBAL SECURITIES LTD (FORMERLY ALLIANZ
SECURITIES LTD)
AMBIT CORPORATE FINANCE PRIVATE LTD
ANAND RATHI FINANCIAL SERVICES LIMITED (FORMERLY ANAND
RATHI
SECURITIES PVT LTD)
ANDHRA BANK
ANTIQUE CAPITAL MARKETS PVT. LTD.
ARIHANT CAPITAL MARKETS LTD
ARYAMAN FINANCIAL SERVICES LIMITED
ASHIKA CAPITAL LTD
ASIT C. MEHTA INVESTMENT INTERRMEDIATES LTD
ATHERSTONE CAPITAL MARKETS LTD
AVENDUS CAPITAL PVT. LTD.
BNP PARIBAS
BOB CAPITAL MARKETS LTD
BRICS SECURITIES LTD
CALYON BANK (FORMERLY CREDIT AGRICOLE INDOSUEZ)
CENTRUM CAPITAL LIMITED (FORMERLY CENTRUM FINANCE LTD)
COMFORT SECURITIES PVT LTD

57
CORPORATE PROFESSIONALS CAPITAL PVT. LTD.
CORPORATE STRATEGIC ALLIANZ PVT LTD
D & A FINANCIAL SERVICES PVT. LTD.
DAIWA SECURITIES SMBC INDIA PVT LTD
CREDIT SUISSE SECURITIES (INDIA) PVT LTD
DALMIA SECURITIES PVT. LTD.
DARASHAW & COMPANY PRIVATE LTD (FORMERLY BADAR FINANC
DBS BANK LTD
EDELWEISS CAPITAL LTD
ELARA CAPITAL (INDIA) PRIVATE LIMITED
EMKAY SHARE AND STOCK BROKERS LTD
EQUIRUS CAPITAL (P) LTD
ESCORTS SECURITIES LTD
FIRSTCALL INDIA EQUITY ADVISORS PVT. LTD.
FORTRESS CAPITAL MANAGEMENT SERVICES PVT LTD
FORTUNE FINANCIAL SERVICES (INDIA) LTD
GSFS CAPITAL & SECURITIES LTD
HDFC BANK LTD
IDBI BANK LTD.(FORMERLY INDUSTRIAL DEVELOPMENT BANK OF
INDIA)
IDBI CAPITAL MARKET SERVICES LTD
IDFC-SSKI LTD.
IMPERIAL CORPORATE FINANCE & SERVICES PVT LTD
IND GLOBAL CORPORATE FINANCE PVT LTD
INDIA CAPITAL MARKETS PRIVATE LIMITED
INDIA INFOLINE LTD.(FORMERLY INDIA INFOLINE SECURITIES PVT
LTD)
INDIABULLS SECURITIES LIMITED (FORMERLY ORBIS SEC LTD)
INDUSIND BANK LTD
INFRASTRUCTURE DEVELOPMENT FINANCE COMPA
ING VYSYA BANK LTD. (ERSTWHILE THE VYSYA BANK LTD.)
INTEGRATED ENTERPRISES (INDIA) LTD (INTEGRATED ADVISORY
SERV
INTENSIVE FISCAL SERVICES PVT LTD
INTER CORPORATE FINANCIERS & CONSULTANTS LTD.

58
JEFFERIES INDIA PRIVATE LIMITED
KARN MERCHANT BANKERS LTD.
KARVY INVESTOR SERVICES LTD
KEYNOTE CORPORATE SERVICES LTD
KHANDWALA INTEGRATED FINANCIAL SERVICES PVT LTD
KHANDWALA SECURITIES LTD
LAZARD INDIA PRIVATE LTD ( LAZARD CREDIT CAPITAL LTD.)
LKP SECURITIES LTD (FORMERLY LKP SHARES AND SECURITIES LTD)
LODHA CAPITAL MARKETS LTD
LSI FINANCIAL SERVICES PVT. LTD.
MACQUARIE INDIA ADVISORY SERVICES PVT LTD
MAPE ADVISORY GROUP PVT LTD
MASTER CAPITAL SERVICES LTD
MEGHRAJ SP CORPORATE FINANCE (PVT) LTD
MONEY MATTERS INVESTMENT ADVISORS PRIVATE LIMITED
MOTILAL OSWAL INVESTMENT ADVISORS PVT. LTD.
MPA FINANCIAL SERVICES LIMITED
MUNOTH FINANCIAL SERVICES LTD
N M ROTHSCHILD AND SONS (INDIA) PVT LTD
NETWORTH STOCK BROKING LTD.
NIRBHAY CAPITAL SERVICES PVT LTD
NOMURA FINANCIAL ADVISORY AND SECURITIES (INDIA) PVT. LTD.
NORTHBRIDGE CAPITAL LIMITED
ORIENTAL BANK OF COMMERCE
PADMAKSHI FINANCIAL SERVICES LIMITED
PIONEER INVESTCO
PL CAPITAL MARKETS PVT LTD
PNB GILTS LIMITED
PNR SECURITIES LTD
PRIME SECURITIES LTD
PUNEET ADVISORY SERVICES PVT LTD
R R FINANCIAL CONSULTANTS LTD
RABO INDIA SECURITIES PRIVATE LIMITED
REAL GROWTH SECURITIES PVT. LTD.
RELIGARE CAPITAL MARKETS LIMITED

59
SAFFRON CAPITAL ADVISORS PVT LTD
SAL SECURITIES PVT. LTD.
SICOM LTD
SMC CAPITALS LIMITED
SOBHAGYA CAPITAL OPTIONS LTD.
SOCIETE GENERALE
SPA MERCHANT BANKERS LIMITED
SPARK CAPITAL ADVISORS (INDIA) PVT LTD
SREI CAPITAL MARKETS LTD
STANDARD CHARTERED-STCI CAPITAL MARKETS LIMITED
STCI PRIMARY DEALER LIMITED
SUMEDHA FISCAL SERVICES LTD
TAIB CAPITAL CORPORATION LIMITED
TAMILNAD MERCANTILE BANK LTD
THE CATHOLIC SYRIAN BANK LTD
TRUST INVESTMENT ADVISORS PVT LTD
ULJK SECURITIES PVT. LTD.
UNION BANK OF INDIA
UNITED BANK OF INDIA
VALUE LINE ADVISORS PVT LTD.(FORMERLY S B & T FINANCE
PRIVATE LTD)
VC CORPORATE ADVISORS PVT. LTD. (FORMERLY ECCENTRIC
CAPITAL PVT LTD.)
VCK CAPITAL MARKET SERVICES LTD.
AXIS BANK LTD.(FORMERLY UTI BANK LTD.)
BAJAJ CAPITAL LTD
TATA CAPITAL MARKETS LTD
ICICI BANK LTD (private)
ICICI SECURITIES LTD
RELIANCE SECURITIES LIMITED
KOTAK MAHINDRA CAPITAL COMPANY LTD
YES BANK LTD.
BANK OF AMERICA, N.A
MORGAN STANLEY INDIA COMPANY PVT LTD
DEUTSCHE BANK & DEUTSCHE EQUITIES INDIA PRIVATE LIMITED

60
BARCLAYS BANK PLC
BARCLAYS SECURITIES (INDIA) PVT. LTD.
CITIGROUP GLOBAL MARKETS INDIA PVT. LTD.
DSP MERRILL LYNCH LTD
FEDEX SECURITIES LTD
GOLDMAN SACHS(INDIA) SECURITIES PVT. LTD.
J P MORGAN INDIA PVT. LIMITED
SBI CAPITAL MARKETS LTD
BANK OF MAHARASHTRA
IFCI FINANCIAL SERVICES LTD
KARUR VYSYA BANK LTD,
PUNJAB NATIONAL BANK
STATE BANK OF BIKANER AND JAIPUR

61
62