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Recent Development and Challenges

Recent developments in the merchant banking industry in India have been driven by several factors, including an active stock market during 1985-1992, expected growth in new stock issues in 2010, and increased foreign investment. However, merchant banks still face challenges such as limited scope of work due to SEBI guidelines, blame for client inefficiencies, high net worth requirements, and a poor market for new stock issues.

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1K views2 pages

Recent Development and Challenges

Recent developments in the merchant banking industry in India have been driven by several factors, including an active stock market during 1985-1992, expected growth in new stock issues in 2010, and increased foreign investment. However, merchant banks still face challenges such as limited scope of work due to SEBI guidelines, blame for client inefficiencies, high net worth requirements, and a poor market for new stock issues.

Uploaded by

VRajamanikandan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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2.3.

5 Recent Developments in Merchant Banking and


Challenges Ahead The recent developments in Merchant
banking are due to certain contributory factors in India.
They are.
1.The Merchant Banking was at its best during 1985-1992 being
when there were many new issues. It is expected that 2010 that
it is going to be party time for merchant banks, as many new
issue are coming up

2.The foreign investors - both in the form of portfolio
investment and through foreign direct investments are venturing
in Indian Economy. It is increasing the scope of merchant
bankers in many ways.

3.Disinvestment in the government sector in the country gives a
big scope to the merchant banks to function as consultants.

4.New financial instruments are introduced in the market time
and again. This basically provides more and more opportunity
to the merchant banks.

5.The mergers and corporate restructuring along with MOU and
MOA are giving immense opportunity to the merchant bankers
for consultancy jobs However the challenges

faced by merchant bankers in India are

1.SEBI guideline has restricted their operations to Issue
Management and Portfolio Management to some extent. So, the
scope of work is limited.
2.In efficiency of the clients are often blamed on to the
merchant banks, so they are into trouble without any fault of
their own.

3.The net worth requirement is very high in categories I and II
specially, so many professionally experienced person/
organizations cannot come into the picture. 4.Poor New issues
market in India is drying up the business of the merchant
bankers
oth in the for
m of portfolio investment and through
foreign di
rect

Foreign Banks


Merchant Banks

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