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Concept of Investment Banks
The banking scenario in India is itself huge, covering the different facets of the economy. By and large, investment
banks in India are itself an institution which generates funds in two different ways. The first manner in which it works
is by drawing public funds via the capital market by way of selling stock in their company. The other way in which itoperates is to seek for venture capital or private equity, as a substitute for a stake in their company.
Role of an Investment Bank
The major work of investment banks includes a lot of consulting. For instance, they offer advices on mergers and
acquisitions to companies. The other arena where they give advice are tracking the market and determining when
should a company come out with a public offering and what is the best possible way to manage the public assets of
businesses. The role that an investment bank plays sometimes gets overlapped with that of a private brokerage
house. The usual advice of buying and selling is also given by investment banks.
There is no demarcating line between the investment banking and other forms of banking in India. This has been
observed majorly of late. ll banks nowadays want to provide their customers the best of services and create a niche
for themselves and that is why apart from investment banks, all other banks too are aiming at making it big.
t the macro level, investment banking is related with the primary function of assisting the capital market in its
function of capital intermediation, i.e., the movement of financial resources from those who have them !the investors",
to those who need to make use of them for producing #$% !the issuers". &ver the decades, investment banks have
always suited the needs of the finance community and thus become one of the most vibrant and e'citing segment of
financial services.
#lobally investment banks handle significant fund(based business of their own in the capital market along with their
non(fund service portfolio which is offered to the clients. ll these activities are broadly segmented across three
platforms ( equity market activity, debt market activity and merger and acquisitions !)*" activity. In addition, given
the structure of the market, there is also a segmentation based on whether a particular investment bank belongs to a
banking parent or is a stand(alone pure investment bank.
Investmentbanks in India are challenging type of organization that support capital wants
of a business venture. Executing personal post, submitting bond, performance as a go-
between and supplementary merger and acquisition are some of the signicant features of
Investment banking in India.
!op "# Investment $anks in Indiao%ers large number of nancial optional services by
tracking the economic trends, besides as long as nancial help to corporate and retail
customers. &ome of them are'-
" ( $a)a) *apital
http://www.jpinvestment.co.cc/http://www.jpinvestment.co.cc/http://www.jpinvestment.co.cc/http://www.jpinvestment.co.cc/ -
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!he $a)a) *apital +roup is one of the famous Investmentconsultant and inancial lanning
rms in India. It is expert under the group I of erchant $ankers by &E$I.$a)a) *apital
provides specially made iscal lanning facilities and investment consultation to the
investors, organizational investors, corporate, high income patrons and /on-0esident Indians
1/0Is2.
$eing one of the biggest distributors of economic goods, $a)a) capital provides an wide
range of investment schemes such as universal insurance, life insurance, mutual funds,
etc to both public and personal institutions.
3- icici securities ltd.
I*I*I &ecurities 4td is India5s chief equity house, I*I*I &ecurities 4td o%er back-to-back
banking solutions through its wide sharing network to canter to the varied needs of its retail
and corporate clients. !he rm is listed under the nancial power of &ingapore 1&2 and
inancial &ervices power, 67 and has an reliable place in the core divisions of its functional
areas such as consultant services, scal good sharing, Equity *apital arkets optional&ervices, etc.
8- I9*
I9* is initiated in "::; in *hennai< I9* undertake the liability of as long as nancial
support to 883 pro)ects accruing a earnings of up to 0s 3, 3#, =## million. !he sectors under
I9*5s nancial support be infrastructure, agric related business, transportation, healthcare,
tourism and others.
= ( 7otak ahindra capital corporation
7otak ahindra *apital corporation is inventor and leader in equity capital markets, 7otak
Investment $anking has undertaken the developmental work of most ground breaking
advances in the Indian capital markets comprising the launch of book building and capable
Institutional lacements in India. !he investmentbank has an impressive path record of
devious a range of sectors and has played a ma)or position in the government5s marker
disinvestments.
>- &$I *apital arkets
&$I *apital arkets is India5s leading investmentbank and system consultant, aiding local
rms in capital recruitment activities for last many years. !he rm started it operations in
":?@ and is a completely owned secondary of the &tate $ank of India. Asian growth $ank
1A+$2 possesses "8.?=B stakes in equity segment of &$I*A&.
@- !ata investment corporation ltd.
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A non-banking nancial company 1/$*2, !I*4 is scheduled with the 0eserve $ank of India
under the group of 5Investment *ompany5. !he rm5s commercial behavior constitute
mostly of endow in ancient investmentsin equity of the rms in a variety of sectors. !he
chief source of go back for the rm entails income on investment trading and income
accrued on dividend.
;- Avendus capital
An investmentbank as long as mergers and acquisitions, xed returns, controlled nance,
intended optional facilities and rivate Equity &yndication to its customers ranging from
investors to corporate. !he bank has a powerful investigate capability which it utilizes to
close business deals in antagonistic situation. It presently concentrate on sectors where
Indian rms have planned growth benet that is Cealthcare, harmaceuticals, I! &ervices,
*onsumer goods, manufacturing, etc.
? ( 6!I securities 4td.
6!I &ecurities 4td authorized as a self-governing specialized body in "::=, 6!I &ecurities
4td., is one of the famous investmentbank of India. After the annihilation of 6nit !rust of
India 16!I2 Act, the total share fund of 6!I&E4 is now controlled by manager of particular
enterprise of 6!I. !he rm has been contribution all sorts of investment linked behavior
which incorporate investmentbanking and commercial consultation services.
:- yes bank
!his Investment banking friendship is busy in the categorization, understanding and
execution of deals for their clients in diverse sectors and nations. &ome of the typical
dealings incorporate divestitures, condential equity syndication, mergers D acquisition andI discussion.
"# ( cholamandalam investment D nance ltd.
A combined economic service supplier of three rms namely *holamandalam 9$& inance
4imited 1*942, 9$& *holamandalam 9istribution 4imited and 9$& *holamandalam
&ecurities 4imited, *holamandalam 9$& operates in "@ international markets. 9$& provides
a general range of services to small and medium sized venture, corporate, customers and
comprehensive banking behavior crossways center East and Asia.
INVESTMENT BANKING IN INDIA
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An Investment Banker is total solutions provider as
far as any corporate, desirous of mobilising capital, is
concerned. The services range from investment
research to investor service on the one side and from
preparation of offer documents to legal compliances
and post issue monitoring on the other. There exists
a long lasting relationship between the Issuer
Company and the Investment Banker. A !erchant
Banker could be defined as An organisation that
acts as an intermediary between the issuers and the
ultimate purchasers of securities in the primary
security market
!erchant Banker has been defined under the
"ecurities # $xchange Board of India %!erchant
Bankers& 'ules, ())* as any person who is
engaged in the business of issue management either
by making arrangements regarding selling, buying or
subscribing to securities as manager, consultant,
advisor or rendering corporate advisory service in
relation to such issue management.
!erchant Banking, as a commercial activity, took
shape in India through the management of +ublic
Issues of capital and oan "yndication. It was
originated in ()-) with the setting up of the
!erchant Banking ivision by A/0 1rindlays Bank.
The main service offered at that time to the
corporate enterprises by the merchant banks
included the management of public issues and some
aspects of financial consultancy. The early and mid2
seventies witnessed a boom in the growth ofmerchant banking organisations in the country with
various commercial banks, financial institutions,
broker3s firms entering into the field of merchant
banking.
Issues +ead )anaged by arvy In the
last - ears
The /redentials
!anagement of Capital Issues
!anagement of Buybacks and
takeovers
+rivate +lacements of debt and
4uery
!ergers and Amalgamations
oan "yndication
#lossary of ey Terms
http://www.karvy.com/corporatefin/mbd.htmhttp://www.karvy.com/corporatefin/mbd.htmhttp://www.karvy.com/corporatefin/mbdTheCredentials.htmhttp://www.karvy.com/corporatefin/capissuesmgmt.htmhttp://www.karvy.com/corporatefin/buybackmgmt.htmhttp://www.karvy.com/corporatefin/buybackmgmt.htmhttp://www.karvy.com/corporatefin/privplace.htmhttp://www.karvy.com/corporatefin/privplace.htmhttp://www.karvy.com/corporatefin/manda.htmhttp://www.karvy.com/corporatefin/loansynd.htmhttp://www.karvy.com/ipo/glossary.htmhttp://www.karvy.com/corporatefin/mbd.htmhttp://www.karvy.com/corporatefin/mbd.htmhttp://www.karvy.com/corporatefin/mbdTheCredentials.htmhttp://www.karvy.com/corporatefin/capissuesmgmt.htmhttp://www.karvy.com/corporatefin/buybackmgmt.htmhttp://www.karvy.com/corporatefin/buybackmgmt.htmhttp://www.karvy.com/corporatefin/privplace.htmhttp://www.karvy.com/corporatefin/privplace.htmhttp://www.karvy.com/corporatefin/manda.htmhttp://www.karvy.com/corporatefin/loansynd.htmhttp://www.karvy.com/ipo/glossary.htm -
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'eform measures were initiated in the capital market from ())*, starting with the
conferring of statutory powers on the "ecurities and $xchange Board of India %"$BI& and
the repeal of Capital Issues Control Act and the abolition of the office of the Controller of
Capital Issues. These have brought about significant improvement in the functional and
regulatory efficiency of the market, enabling the !erchant Bankers shoulder greater legal
and moral responsibility towards the investing public.
KARVY AS AN INVESTMENT BANKER
5arvy is well networked with *66 full2fledged branches and 786 Investor "ervice Centers
with a workforce of over 7866 personnel drawn from various disciplines.
5arvy Investor "ervices imited, a "$BI registered !erchant Banker is a (669 subsidiary
of 5arvy Consultants imited and is among the top (6 merchant Bankers in India today.
The parent Company i.e. 5arvy Consultants imited was founded by a group of
professionals in ():* and today it has evolved as integrated financial services company of
repute, offering various financial services to suit every re4uirement;need of our
customers. By virtue of its access to millions of Indian "hareholders, in addition to
companies, banks and financial institutions, 5arvy has in the process built up a positivereputation with regulatory authorities and other government agencies. 6 public;rights issues as !erchant Bankers. uring
the last two years we have handled the share buyback issues of TT5 I1 imited, "irpur
+aper !ills imited, Bhagyanagar !etals imited, A ? Thomas 1roup2/elliampathy Tea and
+roduce Company imited, Chordia @ood +roducts imited, eritage @oods %India& imited,
Titanor Components td, +unab Communications imited, etc. to name a few.
=e have also handled;are handling the 'ights;+ublic issues of hanalakshmi Bank,handapani @inance, !oschip, 5arur ?ysya Bank, ux osiery Industries td, "ah
+etroleums imited, +aradyne Infotech imited, ash +apers imited, "+ Industries
imited, +rovogue %I& imited, Tulip IT "ervices imited, 1ati imited as lead managers to
name a few. =e have also been appointed as advisor to some of the 1
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'$C, +@C, "IBI, etc.
As an Investment Banker, 5arvy providesD
E !anagement of Capital Issues
E !anagement of Buybacks, Takeovers and elisting offers
E +rivate +lacement of ebt and $4uity
E !ergers and Amalgamations
E oan "yndication
Source : Investment Banking Department
KARVY AS AN INVESTMENT BANKER
A""I1/!$/T" A/$ B 5A'?
PUBLIC ISSUES
S.No. Name of the Issuer Issue Sie
!Rs. I" #a$hs%
&ur Ro#e
( FC< Bank *G,666 Co2!anager
* ux osiery Industries td (,666 ead !anager
7 ?iaya Bank *6,666 Co2!anager
G 'amakrishna @orgings td (,(86 ead !anager
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8 ?ishal $xports 66 ead !anager
- IBI @lexi Bonds (: >6,666 ead !anager
> IBI @lexi Bonds () -6,666 ead !anager
: IBI @lexi Bonds *6 :6,666 ead !anager
) IBI @lexi Bonds *( (,66,666 ead !anager
(6 ICICI August *667 -6,666 ead !anager
(( ICICI G: ead !anager
* The 5arur ?ysya Bank imited 7-66 ead !anager
7 Borax !orari imited ()- ead !anager
G !oschip "emiconductor Technology
td
((>6 ead !anager
8 Coonoor Tea $states Co td ead !anager
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- Agro utch @oods imited ead !anager
TAKE(&VER ASSIGNMENTS
S.No. Name of the Issuer &ur Ro#e
( TT5 imited ead !anager
* Advanced !icronic evices td ead !anager
7 ?enkataramana otels td ead !anager
G Thiagaraar !ills imited ead !anager
8 =+I imited ; industhan Fdyog imited ead !anager
- 'aasi 'efractories td ead !anager
> industhan Fdyog td ead !anager
: 5erry Host $ngineering td ead !anager
) "tewarts and loyds of India td ead !anager
(6 '' 1reenhands td ead !anager
(( TT5 ealthcare td ead !anager
(* +hoenix !ills imited ead !anager
BUY(BACK &))ERS
S.No. Name of the Issuer &ur Ro#e
( Titanor Components imited ead !anager
* +unab Communications td ead !anager
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DELISTING &))ERS
S.No. Name of the Issuer &ur Ro#e
( "pencer # Company td ead !anager
* "haradha Terry +roducts imited ead !anager
7 Idea "pace solutions td
G "'+ Tools imited
DEBT ISSUES
S.No. Name of the Issuer Issue Sie
!Rs. I" #a$hs%
&ur Ro#e
( A+ +ower @inance Corporation td 7),*>) Arranger
* A+ =ater 'esources evelopment
Corporation
8-,:67 Arranger
7 +unab "tate Industrial
evelopment Corporation
*6,666 Arranger
G imachal +radesh Industrial
evelopment Board
*6,666 Arranger
8 A+ +ower @inance Corporation td *8,666 Arranger
- hanalakshmi Bank imited *,666 Arranger
ES&S*ES&P
S.No. Name of the Issuer &ur Ro#e
( +C" Technologies td !erchant Banker
* "uven ife "ciences td !erchant Banker
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7 =ipro imited !erchant Banker
G +olaris "oftware Tech. td !erchant Banker
8 Aptech imited !erchant Banker
- C Technologies imited !erchant Banker
> 1ati imited !erchant Banker
: !atrix aboratories imited !erchant Banker
C&RP&RATE )INANCE ACTIVITIES
S.No. Name of the Com+a", Nature of Assi-"me"t
( Bharat otels imited ?aluation of Business
* ?erdant Technology td ?aluation 'eport
7
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G !ars 'estaurants imited +ublic Issue
8 +aradyne Infotech imited +ublic Issue
- +lus +aper @oodproducts imited +ublic Issue
> Bartronics India imited +ublic Issue
: Tulip IT "ervices imited +ublic Issue
) "+ Industries imited +ublic Issue
(6 +rovogue India imited +ublic Issue
(( 'ohit @errotech imited +ublic Issue
(* ash +apers imited @urther +ublic Issue
(7 Beeyu +ower @inance Corporation Bonds Issue
(: "IBI Bonds Issue
() /B Bonds Issue
ISSUES IN PIPELINE
S# Name of the Com+a", Nature of Ma"ate
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No
( $ssel "hyam Communications imited +ublic Issue
* /avayuga $ngineering Company imited +ublic Issue
7 +ioneer $mbroideries imited @urther +ublic Issue
G /C Industries imited 'ights Issue
8 Agro utch Industries imited 'ights Issue
Top;Back !B ome;5arvy ome
SEBI (Merchant Bankers) Regulations, 199
)erchant Bankers have been barred from undertaking activities other than related to the securities
market. The 01BI !)erchant Bankers" 2egulations, 3445 have been amended on $ecember 34,
3446 to provide that7
a. the applicant should be a fit and proper person8
b. a merchant banker has to seek separate registration for its underwriting or portfoliomanagement activities8
c. the categorisation of merchant bankers I, II, III and I9 has been dispensed with8
d. a merchant banker, other than a bank or a public financial institution, has been prohibitedfrom carrying any activities not pertaining to the securities market8 and
e. the applicant should be a body corporate other than non(banking finance company.
The )erchant Bankers 2egulations were amended on :anuary 53, 344; to provide time
upto :une -
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securities market. The 2eserve Bank of India has e'empted merchant banking companies
from the provisions of 2eserve Bank of India ct, 34-= relating to compulsory registration
!section =>3", maintenance of liquid assets !section =>3B", creation of reserve fund
!section =>3/ " and all the provisions of the recent $irections relating to deposit acceptance
and prudential norms.
)erchant banking companies, to be eligible for the above e'emption, are required to satisfy
the following conditions7
i. such companies are registered with the 01BI under section 35 of the 01BI ct, 3445 and arecarrying on the business of merchant banker in accordance with the 2ules ? 2egulationsframed by the 01BI8
ii. they acquire securities only as part of their merchant banking business8
iii. they do not carry on any other financial activities as mentioned in section =>3 !c " of
the 2BI ct, 34-=8
iv. they do not accept ? hold public deposits.
Nee for Re-istratio"
"$BI "tarted the process of registration of some of the intermediaries associated with the process of
issue management. This is done to ensure professionaliation of intermediaries and to curb the
malpractices indulged in by some of intermediaries.
The merchant banks have to be registered with "$BI and no firm can carry on any activity as a
!erchant banker, unless it holds a certificate granted by the board under the regulation of "$BI. The
investment banks serves as an intermediaries between issuing company and investing clients.
=hen investment banks serve as the lead managers for the securities of a client, it is necessary that
they themselves are credible in order to gain the investor confidence.
The registration procedure serve this purpose. By setting out certain eligibility criteria for the purpose
of registration, the regulatory bodies seek to ensure that the investment banks, which handle the
various needs of the clients, have the re4uired infrastructure and resources to do so.
$ligibility Criteria
"$BI has prescribed certain criteria in order to be register as merchant banks. These criteria are
included in "ecurities and $xchange Board of India %!erchant Bankers& 'ules, ())*.
To be eligible to carry out activities of merchant banker, the applicant must be a body corporate other
than a /on Banking @inance Company. The applicant himself must be a 4ualified professional in
finance, law or business management from an institute recognied by the 1overnment, the applicant
also must employ two competent persons to carry out the dealings of a merchant banker.
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The applicant, his director, partner or principal officer must not have been involved in any lawsuit
associated with the securities market and they also must not have been convicted at any time for any
offence involving moral turpitude.
"$BI has also set out the capital ade4uacy re4uirement to the persons waiting to be registered as
merchant bankers. The applicant must have a minimum /et worth of 's. 8 Crore. The maximum
underwriting exposure for an investment bank should not exceed *6 times its total net worth. If theindustry practice is to keep an exposure of around (8 times the net worth, it would be termed as the
JIndustry Capital Ade4uacy 'e4uirementK as against regulatory suggestions.
In the term of regulations, the firms must meet the capital ade4uacy in both the countries from where
the capital flows out as well as where it flows in. The procedure for registration must be followed and
the relevant forms should be submitted by the merchant bankers.