This article is about the history of banking as developed by merchants, from the Middle Ages onwards. Through the primary market companies or corporations sell their stock and bonds directly to the investors — both individual and institutional — thereby obtaining the necessary funds needed for setting up a new project or expansion of an existing unit.
Introduction to Merchant Banking: Investment Banks or Merchant Banks specialise in underwriting stocks and bonds of corporate, handling mergers and acquisitions and rendering a range of other financial advisory services.
In India, the regulatory authorities have made it obligatory for the corporate raising funds by issuing commercial papers CP to get their CP issue rated by any of the credit-rating agencies operating in the country. This company was the forerunner in developing the crown jewel of the English Empire.
Amidst the swift changes sweeping the financial world, Merchant Banking has emerged as an indispensable financial advisory package. On the other hand, the investors subscribing to debt instruments, viz.
For example, a company with several years of successful business experience decides to go for a major expansion with substantial capital expenditure.
Who are merchant bankers? Today a merchant banker is who has the ability to merchandise -- that is, create or expands a need -- and fulfill capital requirements.
In discretionary schemes, the portfolio managers have the flexibility of investing whereas in non-discretionary schemes the portfolio managers have to take permission from the investor before making any particular investment.