PROJECT REPORT ON MERCHANT BANKING IN INDIA

NIKHIL S NAIR DPGD/JL10/0823 SPECIALIZATION: - FINANCE

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPEMNT & RESEARCH MAY, 2012

INDEX

SR NO.

TITLE

PAGE NO.

INTRODUCTION

RESEARCH OBJECTIVE

11

RESEARCH DESIGN / METHODOLOGY

15

RECOMMENDATIONS

45

FINDINGS AND OBSERVATIONS

48

CONCLUSION

58

REFERENCES

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INTRODUCTION

INTRODUCTION

MERCHANT BANKING HISTORY

In late 17th and early 18th century Europe, the largest companies of the world were merchant adventurers. Supported by wealthy groups of people and a network of overseas trading posts, the collected large amounts of money to finance trade across parts of the world. For example, The East India Trading Company secured a Royal Warrant from England, providing the firm with official rights to lucrative trading activities in India. This company was the forerunner in developing the crown jewel of the English Empire. The English colony was started by what we would today call merchant bankers, because of the firm's involvement in financing, negotiating, and implementing trade transactions. The colonies of other European countries were started in the same manner. For example, the Dutch merchant adventurers were active in what is now Indonesia; the French and Portuguese acted similarly in their respective colonies. The American colonies also represent the product of merchant banking, as evidenced by the activities of the famous Hudson Bay Company. One does not typically look at these countries' economic development as having been fueled by merchant bank adventurers. However, the colonies and their progress stem from the business of merchant banks, according to today's accepted sense of the word.

THE HISTORICAL MERCHANT BANK

Merchant banking, as the term has evolved in Europe from the 18th century to today, pertained to an individual or a banking house whose primary function was to facilitate the business process between a product and the financial requirements for its development. Merchant banking services span from the earliest negotiations from a transaction to its actual consummation between buyer and seller. In particular, the merchant banker acted as a capital sources whose primary activity was directed towards a commodity trader/cargo owner who was involved in the buying, selling, and shipping of goods. The role of the merchant banker, who had the expertise to understand a particular transaction, was to arrange the necessary capital and ensure that the transaction would ultimately produce "collectable" profits. Often, the merchant banker also became involved in the actual negotiations between a buyer and seller in a transaction.

THE MODERN MERCHANT BANK

During the 20th century, however, European merchant banks expanded their services. They became increasingly involved in the actual running of the business for which the transaction was conducted. Today, merchant banks actually own and run businesses for their own account, and that of others. Since the 18th century, the term merchant banker has, therefore, been considerably broadened to include a composite of modern day skills. These skills include those inherent in an entrepreneur, a management advisor, a commercial and/or investment banker plus that of a transaction broker. Today a merchant

banker is who has the ability to merchandise -- that is, create or expand a need -- and fulfill capital requirements. The modern European merchant bank, in many ways, reflects the early activities and breadth of services of the colonial trading companies.

Most companies that come to a U.S. merchant bank are looking to increase their financial stability or satisfy a particular, immediate capital need.
Professional merchant bankers must have: 1) an understanding of the product, its industry and operational management; 2) an ability to raise capital which might or might not be one's own (originally merchant bankers supplied their own capital and thereby took an equity interest in the transaction); 3) and most importantly, effective skills in concluding a transaction - the actual sale of the product and the collection of profit. Some people might question whether or not there are many individuals or organizations who have the abilities to fulfill all three areas of expertise.

CAPITAL ASSISTANCE
In providing financial assistance, merchant banks offer a full understanding of all facets of the capital markets. This includes all types of debt and equity financing available from both the domestic and international markets. A merchant banker, cognizant of capital costs, looks for the best sources of capital, including its restrictions and dollar limitations. It should be understood that interest rates are not the only definition of capital costs. Restrictions on availability, prepayment terms, and operating effectiveness can often outweigh what might appear to be inexpensive capital with low interest rates. Too often, capital includes costs which force an entrepreneur or a business to undertake undesirable

actions. In the short-run, some actions might be necessary, but often in the long run are detrimental. The traditional merchant banker understands these capital limitations and can structure a transaction, which is beneficial to all sides of the table -- not just the capital source. He also knows how to substitute one type of capital for another, sometimes utilizing internal sources from asset repositioning or cash creation from improvements in working capital. He understands fully the risk versus return elements necessary to complete the capital procurement process.

FINANCIAL MARKETS
Financial Markets provides services to institutions and large and medium-sized enterprises. Its customer-based activities are organized into specialized businesses operating in money markets, fixed-income securities and derivatives. Services are provided through three front offices: trading, sales and research. A new trading system, Click and Deal, was introduced in 2000, giving customers direct access to the trading room. Financial Markets also acts as an adviser and executor of Asset & Liability Management for Fortis. Together with Information Banking, Financial Markets provides sophisticated services to institutional investors. Its sharper focus on risk-adjusted returns is supplemented by a high quality of information, advice and customized solutions. Merchant Banking Fortis supports institutional and professional customers through its Merchant Banking business. Financial Markets, Investment Banking and Information Banking services are provided under a one-stop concept. Customers are increasingly demanding interrelated concepts, and Merchant Banking responds to this demand by
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offering cutting-edge, high-quality, dedicated services. Fixed-income trading made an impressive contribution to overall profit, and issues triggered a resounding growth in sales. Foreign exchange trading performance recovered during the year, compensating for the earlier disappearance of intra-European exchange markets. The volatile exchange rate between the US dollar and the euro generated increased capital movements and restored volume. Money market results, however, were depressed by the rise of short-term interest rates. In the year under review, Financial Markets strengthened its reputation as a firstrate trading partner for primary bonds and became one of the leading banks on the Eurobond market. In cooperation with Moodys rating agency, Merchant Banking is currently developing a European benchmark credit default model for unlisted companies. In 2001 a rating advisory desk was launched to help corporate customers negotiate with rating agencies, thus enabling these companies to attract new sources of finance. Advanced rating instruments will also benefit institutional investors by expanding their investment alternatives

Investment Banking
Investment Banking serves top institutional investors and large enterprises by handling all market transactions in equity products. This business line capitalized on the increased size and position of all Fortis activities, and thus managed to boost volume on its Benelux home market. Primary market activity in Europe jumped remarkably from its 1999 level, particularly in the first half of the year. Investment Banking aspires to a top five ranking in all relevant European markets. To that end, it expanded its activities in Spain and France, and Greenfield operations will be set up in Germany and Italy in 2001. In 2000 Investment Banking launched the Globe project to ensure simple and straight-through processing of all stock exchange transactions. Corporate Finance & Capital Markets specializes in mergers and acquisitions, initial public offerings and secondary offerings, structuring and financial advice on capital markets. The banks activities in mergers and acquisitions again showed vigorous growth in 2000. The current trend towards concentration in industry and services is likely to continue in 2001, inspired by market harmonization in the euro-zone.

Information Banking
Information Banking performs clearing, custody, securities lending and financing, offshore fund services and related activities. The business line has become a recognized specialist in the investor services industry, offering services to third-party professional players in the financial markets. Interest, fees and commissions have shown strong growth, benefiting from volume growth of both new and existing customers in the financial markets. Clearing activity in Europe increased its market share substantially. The acquisition of a US-based clearing company has intensified the ambition to serve market operators and financial institutions globally. This goal is supported by the strong position in Europe in stock lending, repo/swap and securities financing markets. Information Banking has gained undisputed recognition for the quality of its services as a custodian. The business line holds in custody approximately EUR 500 billion in assets, focusing on medium-sized institutions in Europe that require tailor-made service. The business line also acts as a depository for Fortis group assets. Through state-of-the-art information systems, based on a unique integrated platform, Information Banking is permanently linked to various trading, clearing and settlement systems and to the main financial markets. Likewise, customers can connect their systems in a variety of ways. The communication and delivery systems are in the process of being web-enabled. In 2000 Information Banking received several awards for its custody and offshore services.

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RESEARCH OBJECTIVE

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OBJECTIVE AND SCOPE OF THE STUDY

STRUCTURE OF MERCHANT BANKING IN INDIA

RABO India Securities, a wholly owned subsidiary of Rabo India Finance, started its merchant banking activities with an initial capital investment of Rs 5.5 crore, a press release. Rabo India Securities (RIS) will offer investment banking products such as advice on transactions ranging from capital structure to maximization of shareholder value and protection against takeovers. The licence also allows RIS to execute open offers on behalf of clients and to participate in the capital raising. It also plans to introduce products relating to mergers and acquisitions, initial public offers and bond offerings, in addition to expanding services such as underwriting of securities. Mr Sanjiv Bhasin, Managing Director and Chief Executive Officer for RIF, was quoted as saying, "Obtaining the merchant banking licence enhances our ability to provide a comprehensive customised range of products and services to prospective and existing wholesale clients."

New HR Initiatives SEBI okays gold exchange funds No more extension to Clause 49 deadline
Market regulator Securities and Exchange Board of India (Sebi that there will be no
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extension to the Clause 49 deadline There will be no extension to the Clause 49 deadline Clause 49, which is popularly known as Corporate Governance clause, makes it mandatory for all companies that there should be at least 50 per cent independent directors on its Board. The Sebi Board has approved insertion of a provision for launch of gold exchange trade funds, besides introducing refund of payments through the electronic clearing system, Mr Damodaran . The Board has also decided after Jagdish Kapoor Committee report that transaction in access of Rs 5 lakh would require biometric identification system and those below five lakh will require PAN Card. Mr Damodaran all investors would be brought into the biometric identification system over a period of time in a phased manner. The Board has also approved to introduce the grading of initial public offering on an optional basis, he added. On the eve of the deadline set by Sebi for appointment of independent directors on boards of listed companies, as many as 13,000 professionals have posted their resume on a website acting as a meeting platform for director aspirants and companies. Demolishing the myth created by listed companies that there are not enough professionals in the country, about 13,000 have enrolled in the website (primedirectors.com ) created by Prime Database, its Managing Director Prithvi Haldea. Of these, profiles of 7,732 professionals have already been hosted on the website while the profiles of about 5,200 professionals were under processing. An analysis of the profiles revealed the candidates were highly experienced. For example, there are 279 who already hold 448 independent directorships on listed companies, 390 are IIM graduates, 178 are/were professors at IITs/IIMs/IISc, 700 are graduates from foreign universities

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like Harvard, Wharton, Kellog and Stanford. Meanwhile, Sebi has warned four brokers for irregularities in maintaining and delay in delivery of contract notes, failure in collecting upfront margins and non-maintenance of unique client code. Two of the brokers are members of the National Stock Exchange, while one each is registered with Calcutta Stock Exchange and Uttar Pradesh Stock Exchange, a SEBI press note today . Sykes & Ray Equities (I) Ltd was pulled up for delay in delivery of contract, while Nirpan Securities was reprimanded for irregularities in maintaining the contract notes, failure to collect upfront margins and for non-maintenance of unique client code. Both brokers are members of NSE. CSE member Kanodia Stock Broking (Pvt) Ltd was warned for not maintaining client registration forms and for failing to make payments to clients within the statutory 48 hours. UPSE member Atmaram Kejriwal & Co was upbraided by Sebi for not maintaining margin deposit book and order book and failing to appoint compliance officer and direct money transactions between members.

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RESEARCH DESIGN & METHODOLOGY

15

RESEARCH DESIGN AND METHODOLOGY

Issue of Prospectus: 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. The merchant banker has to be registered with SEBI. Principal steps in the issue of prospectus are as follows:

Design and vetting of prospectus: 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 first by the merchant banker before a public issue is made.

Nature of Instrument: The merchant banker has to advise the company on the choice
of instrument, equity, preference share, convertible debenture or non-convertible debentures. The amount of capital to be raised is mentioned in detail in the prospectus. It should also show the uses of funds raised by the issue.

Financial Results: Prospectus has to give past financial results of the company as well
as the projections of the companys operations in future. It must mention the details of the companys business and outlook for the future.

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Risk factors: The most important aspect of contents of the Prospectus is the risk factors
of the companys business that must be clearly spelt out. Prospectus should give factual position and list out the risks in business it is operating. It should not draw unrealistic or unduly rosy picture.

Pricing of the Issue:

The merchant bankers in consultation with the company

decide the pricing of the issue. If it is equity, the issue price, in debentures, the rate of interest has to be decided. In case of convertible debentures, the terms of conversion into equity have to be clearly spelt out. Since the pricing of equity is not regulated to formula, and is governed by free pricing mechanism, realistic pricing has to be decided and mentioned in the prospectus.

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

Appointment of Registrars: The registrars to the 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 despatch of prospectus and application form: After the prospectus
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is filed with the Registrar of Companies, the company should print the prospectus and the application form.

Filing of Initial Listing Application: Within 10 days of filing the prospectus, the
initial listing application must be made to the concerned stock exchanges, along with the initial listing fees.

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. The must be published at least 10 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 of Underwriters: If the issue is under subscribed, 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 exchange(s).

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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.

Cost of Public Issue: The cost of public issue is normally between 8 to 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 to the issue, fees for registrars to the issue, printing expenses, postage expenses, advertising and publicity expenses, listing fees, stamp duty.

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INVESTMENT & MERCHANT BANKING

Its track record, portfolio and information of its Trustee Company and Asset Management Co. SEBI has also prescribed investment limits and norms, limits on expenses, spread between sale and repurchase prices, time period for despatch of statements and payments. All these regulations go in protecting small investors interest. SEBI also requires NAVs of schemes and their entire portfolio to be disclosed periodically. There has been substantial improvement in the disclosure of quality of information and its periodicity. Transparency in disclosure of mutual fund schemes information has gone a long way in improving investor confidence. SEBI also deals with investors complaints and their redressal quickly by following up with companies, stock exchanges, mutual fund and other intermediaries. In its effort to protect small investors interest, SEBI continually reviews operations of all capital market functionaries and adopts suitable changes.

Quality of Management
The management of the company has become one of the prime considerations in valuation of equity shares. Some of the factors giving indication of good quality management indication can be professional managers running the day to day management, capability of management to innovate and ability to face competition, transparency in management policies, high level of corporate and accounting disclosures, unblemished track record in project implementation, arms length distance in dealing with group companies, protecting of minority shareholders etc. With greater emphasis being

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placed on corporate governance the investors have started shunning companies which are not so good quality and thus these companies even though may be declaring good EPS numbers do not get a fair PE multiple ratings.

Dividend Payout Ratio

On studying the cross section data of a sample of large number of companies it has been found that the Dividend payout ratios and Per multiples have a direct relationship. This basically implies that companies which declare high rates of dividends from the earnings they generate are appreciated by the investors. The investor thus attach high PE multiples to these companies.

Size of the company

Size of a company becomes equally important in a rating a stock in the terms of PE multiples. Generally, The leading players in the industry are able to sustain bad times even though the profitability is affected. On the other hand, small players are able to grow in the industry when the outlook is good, but in rough times the possibilities of these units becoming unviable is quite high.

Quality of Earnings
For the financial analyst besides the earnings being important, equally important is the quality of earning. By quality we imply that the source of earnings is from core business
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operation and not due to financial engineering, change in accounting policy, one time provision write back, tax deferment/planning income from trading in commodities, treasury operation or income from other sources like sale of financial asset or real estate. One of these acts of management of the company may boost the bottom line or EPS of the company but these are not sustainable sources of revenue stream.

Stability of Revenue
Broadly, the companies can be divided into two categories the cyclical stocks and the non cyclical. Cyclical industries are the ones which gain the most in periods of economic slow down or recession. Whereas non cyclical industries are defensive in nature these companies are unaffected by the economic slow down. The companies which have stable revenue stream generally tend to get higher valuations in terms of PE multiples.

Nature of Business
The size of revenue may be the same for two different companies but their valuations may grossly differ. As the valuation depend also on the nature of business, in case the revenue of the company is being generated from commodity based business then the ratings are much lower than the companies which have brand based business. As the entry barriers in brand based business are much stronger than in commodity based business.

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Extent of Institutional ownership

The extent of institutional ownership gives general 2U general investor level on comfort about the credibility of the management and operations of the company. The companies in which financial institutions have large stakes also have nominees on the board who are supposed to ensure that the general investors interest are protected. In the Indian context, companies having a high Foreign Institutional Investor holding are valued higher by the market.

Dematerialisation & Stock

The National Securities Depository Limited (NSDL) is an organisation promoted by IDBI, UTI and National Stock Exchange of India to provide electronic depository facilities for securities traded in the equity and debt market. The National Securities Depository Limited has been registered by SEBI as Indias first depository to facilitate trading and settlement of securities in dematerialisation form. Dematerialisation is a process by which the physical certificates of an investor are taken back by the company/register and actually destroyed and an equivalent number of securities are credited in the electronic holdings of that investor. This is done at the request of the investor. An investor will have to first open an account with a depository participant and then request for the dematerialisation of his certificates through the depository participant so that the dematerialised holdings can be credited into that account.

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BANKERS FOR MERCHANT BANKING AN INTRODUCTION: Corporation Bank is also one of the leading Merchant
Bankers in India, offering specialised services to Banks, PSUs, State owned Corporations, Local Statutory bodies and corporate sector. They are Category I Merchant Banker authorised by Securities and Exchange Board of India for Issue Management (Public / Rights / Private Placement Issues), Underwriting of Issues, Consultantcy / Advisory Services to an issue including Corporate Advisory Services etc. They are also SEBI registered Bankers to an Issue with network of dedicated Capital Market Service Branches to handle "Capital Market related assignments". It Undertakes project appraisals connected with resource raising plans from Capital Market/ Debt Markets and facilitate tie-ups with Banks / Financial Institutions and Potential Investors. Their uniqueness is extending services under single window concept covering the following areas: Merchant Banking Commercial Banking Investments Bankers to Issue - Escrow Bankers Underwriting Loan Syndication

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They are one of the leading Merchant Bankers in India, having handled issues ranging from Rs.1 crore to Rs.1500 crores, involving various types of industries, banks, statutory Bodies etc. and have an edge in handling

SPECTRUM OF SERVICES :
Equity Issue (Public/Rights) Management Debt Issue Management Private Placement Project Appraisal Corporate Advisory Services Mergers and Acquisitions Buy Back Assignments Share Valuations

ISSUE MANAGEMENT SERVICES :

Project Appraisal Capital structuring Preparation of offer document Tie Ups (placement) Formalities with SEBI / Stock Exchange / ROC Underwriting

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Promotion /Marketing of Issues Collecting Banker / Banker to an issue Post Issue Management Refund Bankers

PROJECT APPRAISAL CAPABILITY:

Corporation Bank have a separate INDUSTRIAL ADVISORY DIVISION / PROJECT FINANCE DIVISION consisting of experienced and technically qualified personnel for appraisal of all industrial projects and an exclusive AGRICULTURAL

CONSULTANCY SERVICES SECTION for appraising agro based projects.

MARKETING EDGE / PRODUCTS TO RETAIL INVESTORS:

Keeps the list of Potential Investors - Institutions, Provident, Pension & Gratuity Funds, High Net Worth Individuals and others updated and continuously assess their investment appetites and help issuers in effective marketing of the products.

Stock Exchanges
An effective monitoring and surveillance mechanism is an important element contributing to the efficiency and integrity of stock exchanges. The automation process initiated at the BSE, NSE, OTCEI and other exchanges has made it possible to put such a monitoring mechanism in place. The reach of the capital market is also increasing significantly through the same process of automation. SEBI allowed expansion of the
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trading terminals of screen based trading systems of stock exchanges to cities having no stock exchange. Expansion to cities with stock exchanges has also been permitted, subject to an understanding with the local exchange allowing the installation of outside terminals within its jurisdiction. The participating exchange would keep its membership open to the brokers of the other local exchanges. It will ensure an adequate arrangement for resolving investor grievances and for timely settlement of arbitration cases arising out of trades executed on the extended terminals. The expansion of Bombay On Line Trading (BOLT) system of the stock exchange, Mumbai to the trading systems of other exchanges will be subject to general conditions. These include ensuring adequate monitoring and surveillance mechanism, stipulation of usual margins, capital adequacy, intra-day trading limits fixed for the broker stock exchange and the introduction of trade guarantees. The expansion of trading networks will lead to healthy competition between various stock exchanges and increase their efficiency. SEBI has directed all stock exchanges to set up clearing houses or clearing corporations and to provide trade guarantees. This would reduce counterparty risks and enable investors trading through the exchanges to take advantage of settlement of transactions through a depository. Uniform norms and procedures for timely resolution of bad deliveries have been prescribed and are soon expected to become operational with the setting up of Bad Delivery Cells in the exchanges. The National Securities Clearing Corporation Limited (NSCCL) is entrusted with the task of guaranteeing settlement of trades in the capital market segment of the NSE. It has made considerable progress in enhancing clearing facilities in other regions by establishing regional clearing facilities. The setting up of Delhi Regional Clearing House and other regional clearing facilities of
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the NSCCL, will enable the regional relocation of the settlement facilities. This will increase the efficiency of the system and lead to timely settlement of transactions on the NSE. Stock Exchanges have been disallowed from renewing contracts in cash group of shares from one settlement to another. They have to institute a buy-in or auction procedure on the lines of that being followed by the National Stock Exchange. A time limit of four months has also been prescribed for the disposal of arbitration cases by the exchanges. In view of the falling delivery percentages, exchanges have been asked to collect daily margins on the notional loss of a broker for every scrip. Quarterly margins have been imposed on the basis of concentration ratios. The expansion of the NSE trading network, and the trading networks of the Mumbai and other stock exchanges, the expansion of the clearing facilities of the NSCCL to centres outside Mumbai, the setting up of clearing corporations or clearing houses by the other exchanges, and the expansion of the network of depository participants is expected to generate healthy competition between the stock exchanges, stock brokers and other market participants. This is expected to provide transparent and efficient services to investors, as well as bring investors in diverse parts of the country within a nation-wide trading and settlement framework.

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Venture Capital Funds

The SEBI Act requires SEBI to regulate venture capital activity. This area is of particular importance to our markets and needs to be nurtured. Hence, the regulations (November 1996) provide for a lot of flexibility. The regulations allow investments only from "institutional investors" and "high net worth" individuals who are in a position to assess and evaluate the investment risk in such funds. Regulations allow venture capital funds to make equity investments, invest in unlisted companies, finance turnaround companies and permit them to provide loans and other forms of assistance. There is no restriction on the period within which the funds raised should be utilised. The same could be listed on a stock exchange after a period of 3 years from the date of initial setting up subject to listing agreements and appropriate regulations. Venture capital funds may be set up as companies or trusts. The entry of institutional investors and high net worth individuals through venture capital activities is expected to provide an important source of institutional funds to fledgling firms.

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Merchant banking- an overview

Companies raise capital by issuing securities in the market. Merchant bankers act as intermediaries between the issuers of capital and the ultimate investors who purchase these securities. Merchant banking is the financial intermediation that matches the entities that need capital and those that have capital. It is a function that facilitates the low of capital in the market

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SCOPE OF MERCHANT BANKING ACTIVITIES Merchant banking activity helps:

In channelising the financial surplus of the general public into productive investment avenues. To coordinate the activities of various intermediaries to the share issue such as the registrar, bankers, advertising agency, printers, underwriters, brokers etc. To ensure the compliance with rules and regulations governing the securities market

Functions of a merchant banker

The following comprise the main functions of a merchant banker:

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, marketing of the issue, allotment and refund, listing on stock exchanges.

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.
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Corporate advisory services- Merchant bankers offer customised solutions to their

clients financial problems. The following are the main areas in which their advice is sought:

Financial structuring includes determining the right debt-equity ratio and gearing
ratio for the 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.

Project advisory services- Merchant bankers help their clients in various stages of the
project undertaken by the clients. They assist them in conceptualising the project idea in the initial stage. Once the idea is formed, they conduct feasibility studies to examine the viability of the proposed project. They also assist the client in preparing different documents like the detailed project report.

Loan syndication- Merchant bankers arrange to tie up loans for their clients. This takes
place in a series of steps. Firstly they analyse the pattern of the clients cash flows, based on which the terms of borrowings can be defined. Then the merchant banker prepares a detailed loan memorandum, which is circulated to various banks and financial institutions and they are invited to participate in the syndicate.

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The banks then negotiate the terms of lending on the basis of which the final allocation is done.

Providing venture capital and mezzanine financing- Merchant bankers help

companies in obtaining venture capital financing for financing their new and innovative strategies. India Reserve Bank of India (Central bank) State Bank of India & 7 Associates State Bank of India State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Indore State Bank of Mysore State Bank of Patiala State Bank of Saurashtra State Bank of Travancore

Nationalized banks
Bank of India Bank of Baroda Canara Bank Corporation Bank Indian Bank Indian Overseas Bank
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Punjab & Sind Bank Punjab National Bank Vijaya Bank Central Bank of India Union Bank of India Allahabad Bank United Bank of India Bank of Maharashtra Andhra Bank Dena Bank Oriental Bank of Commerce UCO Bank Vysya Bank Karur Vysya Bank Lakshmi Vilas Bank

Major private banks

HDFC Bank ICICI Bank IDBI Bank UTI Bank IndusInd Bank Kotak Mahindra Bank Yes Bank
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Federal Bank Catholic Syrian Bank HSBC ABN AMRO Standard Chartered CITI

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Merged or Defunct banks in India

Arbuthnot & Co Bank of Bombay (now part of the State Bank of India) Bank of Calcutta (now part of the State Bank of India) Bank of Chettinad Bank of Madras (now part of the State Bank of India) Binny & Co

NEW LAUNCHES OF MERCHANT BANKERS RHB Merchant Bank Runs Windows Server 2003 Directory Services RHB
Sakura Merchant Bankers Berhad (RHB Sakura) is one of Malaysia's leading merchant banks. It is principally involved in the provision of corporate finance and advisory, corporate banking, debt capital markets, treasury services and Islamic finance. The principal activities of its subsidiaries are stock broking, asset management, unit trust management and nominee services. RHB Sakura has been awarded Malaysias Best Domestic Equity House 2003 by Asiamoney magazine. The merchant bank, was adviser and joint lead manager and underwriter to two of the countrys largest initial public offerings (IPOs) in recent times, Maxis Communications Berhads RM3.1 billion offering and PLUS Expressways Berhads RM2.3 billion offering. RHB Sakura managed IPOs totaling RM5.41 billion in value which accounted for about 75% of the total value of IPOs during the year.

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THE SITUATION
Treasury services is one of the core businesses of RHB Sakura but by last year, its legacy treasury management system which it had been using since 1994 was due for an upgrade. The mission critical treasury management system is one of the bank's key systems and it handles money market transactions, as well as its corporate banking business. It is also linked to its accounting system.

In September 2002, RHB Sakura decided to upgrade its existing treasury management system to one that runs on the Microsoft platform, says Mahathir Dato' Mohd Ismail, RHB Sakura's General Manager, Finance & General Services. The new system which is designed to run on Windows 2000 requires Directory Services. Microsoft proposed a solution which will co-exist the important Directory Services on Windows Server 2003 with the Treasury Management System on Windows 2000. After internal discussions, RHB Sakura took up the offer to participate in Microsoft's Early Adopters Programme (EAP) for Windows Server 2003, which was then in beta testing stage. According to Mahathir, RHB Sakura took a calculated decision to go for a relatively new operating system. If the solution did not work smoothly on Windows Server 2003, it would have delayed our upgrading programme, he adds. Mahathir however Microsoft's reputation for world-class software and Microsoft

Malaysia's assurance of technical support for RHB Sakura's implementation swung the pendulum in Windows Server 2003's favour.

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We decided it was something seriously worth considering, Mahathir says. RHB Sakura had other options on the table as it evaluated the platform for the new treasury system in the earlier months, including UNIX. The front-end of the upgraded treasury system was designed to run on Windows. But we had the option of choosing either Windows or UNIX for the back end, says Mahathir. Economically, its not a good thing to have two systems running and managing both would also be a problem. So, choosing the Microsoft platform for both the front and back ends was the right decision, says Mahathir.

Solution
Computer Systems Advisers (M) Berhad together with Microsoft Consulting Services (MCS) provided the technical assistance to RHB Sakura to evaluate, test and deploy two units of Windows Server 2003 as Domain Controllers for the bank's upgraded treasury management system. This include testing the functionality and stability of the new treasury system on the Windows Server 2003 Active Directory structure. The implementation has gone relatively smoothly. We have not encountered any major problems with Windows Server 2003, says Mahathir. RHB Sakura currently has about 200 users running on a mix of Windows 2000 Professional and Win9X operating systems, accessing various applications in a single Active Directory Service which offers File & Print services as well. In the case of the old treasury management system, it was running on a proprietary Hewlett-Packard system comprising the HP MPE/iX operating system and HP 3000 hardware. Currently, 50 users will have access to the new system and RHB Sakura is planning to
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migrate another 100 users from Novell Netware to Windows Server 2003. We are also pleased that Microsoft kept to its assurance in providing full support for the project. We have had very good support and back-up from MCS and CSA. Everything is progressing smoothly, we have no complaints.

Benefits Automating business processes

The new solution running on Windows Server 2003 will help RHB Sakura achieve greater efficiency gains, particularly in the area of fully automating several of its business processes, management reporting and statutory reporting to the relevant authorities. It makes our work much easier as we have to capture data and generate numerous reports on a daily, weekly, fortnightly, monthly, semi-annual and annual basis, he adds.

Enhanced Security
A highly secured IT system is a prime concern for banks. RHB Sakura is no different. Security will always top the list of our concerns. The last thing we want is for someone to mess up our systems. The first thing we looked at in this system was security, Mahathir says. Windows Server 2003 offered a number of significant security enhancements over Windows 2000. That is a major plus for us. Windows Server 2003 is the first operating system since Microsoft launched its Trustworthy Computing initiative pledging to make all its software secure by design,
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secure by default and secure in deployment.

Flexibility in administration
Windows Server 2003 offers a flexibility, without compromising on security, which RHB Sakura appreciates. For example, Windows Server 2003 provides the option to rename an active directory a feature which is absent in Windows 2000, says Mahathir. Mahathir does not anticipate having to add more IT staff to handle the Windows Server 2003 platform. We run a lean IT section supporting about 200 users. System administration is easier with Windows Server 2003, he concludes.

Solid Foundation for growth

For RHB Sakura, the treasury management system is mission critical as it handles voluminous transactions with very little room for the system to fail. For us, it is vital that our IT infrastructure be on a reliable platform and Windows 2003 gives us that confidence, says Mahathir. He this confidence in Microsoft's most advanced operating is further reflected in RHB Sakura's plan to migrate another 100 users from Novell Netware to Windows Server 2003. That tells you about the system that we have put in place the features that we need are all there.

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Common agency for share registry

Instead of taking action against those very few companies which would have been guilty of having adopted unfair practices, knowingly or otherwise, causing inconvenience or loss to investors, SEBI has chosen to direct all the companies to appoint a single agency the company itself or a Registrar and Transfer (R&T) agent to handle the registry work relating to both physical and demat holding. The practice followed by almost all the listed companies before the issue of the circular was:

Appoint R&T agents only for the shareholding in dematerialised form

Handle requests from investors for conversion of their holding in physical form into electronic holding, which covered entire process receipt of the request for conversion along with the original share certificates; Verify the documents so received and prepare the advice to the R&T agents (RTAs) to inform the depository concerned for confirmation of the conversion into demat form; and Handle the transfer/transmission of shares held in physical form inhouse. In this arrangement, companies were better able to monitor the work done by the RTA the requests from shareholders being processed by companies to be forwarded to RTA on a fortnightly/weekly basis, the RTA simply communicated electronically to the depository (NSDL/CDSL as the case may be) for updating of the holding in demat form at the depository's end. Every week, an updated list of shareholders in demat from was electronically would be obtained by the RTA and forwarded to the company concerned. This list would be reviewed by the companies to ensure that all the confirmation given by

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them were included in the list as also to scan through the list to have an idea of the shareholding as of a date. The RTA in such an arrangement was only a `courier' who would interact between the company and the depository. All the work related to any corporate action such as payment of dividend, allotment of bonus/rights shares, even in respect of shareholdings in demat form, was done under the supervision of the company it was the RTA who was officially the nominated agency for share registry work for electronic holding too. The number of complaints from shareholders during this period was much less compared to the earlier period when share transfers were mostly in physical form. Further, one cannot equate the role of an RTA for shares in physical form to its responsibilities for shares in demat form. The track record of the RTAs in handling the public/rights issue/bonus issue/share transfers in physical form is well-known. However, the number of shares transfers taking place in physical form are far less today; most of the investors have opted for dematerialised holding to avail of the benefits accruing to them as a result of converting their physical holding into holding in electronic mode and trading in demat form. In the current context, there is little inclination on RTAs' part to provide better investor service; on the other hand, the damage that may be caused by these RTAs are manifold for the following reasons: The business of RTA as such is not remunerative and they cannot afford to pay attractive wages for their employees, with the result that they employ deficient people and the quality of the services suffer. Terms of employment not being conducive, high rate of labour turnover is a common feature with all RTAs. This leads to emergence of fresh batch of employees who are
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novice in the field. For RTAs, this factor merits the least importance and they are more concerned about the increased volume of business/new clients rather than improving the infrastructure efficiency. Cumulative effect of the above two factors results in very poor management of the day-to-day affairs of the RTAs, affecting the level of service and defeating the very purpose for which the RTAs are engaged by companies. With cut-throat competition in this line of business, many RTAs are closing down business and, in these circumstances, it is only the investors who are affected the most. However, renowned groups of companies have set up their own RTAs to cater to the requirement of all the companies in the group; some big companies have obtained the SEBI recognition as a RTA for their inhouse share registry But all firms cannot afford to get RTA registration for their inhouse share registry since the connectivity with each of the depository requires huge capital outlay, while the effective utilisation of the facilities for their captive purpose will be negligible. Thus, barring a few companies/groups of firms, that have their own RTAs, all listed companies are forced to surrender their inhouse share registry that are equipped to handle shares in physical form only, in favour of the RTAs. The complaints from investors that may be received by companies/referred to SEBI in the near future would certainly increase manifold, thanks to the level of services provided by the RTAs. This at least should make SEBI review its indiscreet decision, forcing companies to appoint RTAs, but it is only the investors who would have to bear the brunt for no fault of theirs.

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Powers of SEBI
It is surprising that while SEBI has quoted sections 11(1) and 11B of the SEBI Act 1992 while directing stock exchanges for amending the clause 24 of the listing agreement compelling companies to file the draft scheme for the approval of the stock exchanges, it has chosen to merely issue a circular to stock exchanges, depositories and custodians for appointment of common agency for share registry work by companies. No amendment to the Listing Agreement is sought by SEBI. It is surprising that corporates have surrendered to the whips of SEBI, without even examining whether the directions are within SEBI's powers.

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RECOMMENDATIONS

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RECOMMENDATIONS

FUTURE OF SEBI
THE Securities and Exchange Board of India (SEBI) wants to increase by another 500 the list of companies that would be required to file their annual reports in electronic format with it. It has recently sent out a communication to the stock exchanges with a list of companies. But as it happens, SEBI still has some distance to go in enforcing compliance with regard to the initial list of companies announced by it in July this year. Of the 200 companies identified by SEBI for electronic filing of documents under the Electronic Data Information Filing and Retrieval (Edifar) system, annual reports of 122 companies are still not available on its Web site. Market participants attribute this to a lack of proper disclosure norms. They argue that it is as yet unclear how the norms are to be applied and compliance enforced. Should it apply to companies whose accounting year ended on a date after the new stipulations came into force? Alternatively, should it apply to documents where physical copies have to be filed with stock exchanges on any date after the new regulations came into force? There are no clear answers from either the stock exchanges or the market regulator. Some companies have claimed that the requirement of electronic disclosure of annual reports would apply to finalisation and distribution of annual reports that are made after the new rules came into existence. A case in point is that of HDFC Bank. An official of the bank that in their case the AGM was held on May 30, 2002 while the electronic filing

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came into effect in June. Since all legislations were prospective, they are not required to file the annual report for 2001-02 in electronic format, the official claimed. If HDFC Bank's argument is to be accepted quite a few others could easily claim the privilege of such exemption. Companies such as HLL, Nestle, Glaxo have closed their accounts as of December 2001 and consequently have had their AGMs held much before the new stipulation came into effect. SEBI officials who spoke on condition of anonymity that monitoring of the electronic filing was the responsibility of the stock exchanges and action would have also to be taken by them. Filing of the information in electronic format was made compulsory by the market regulator by amending the listing norms of the exchange by inserting clause 51 to the Listing Agreement. So technically, a company failing to file its documents in electronic form is in violation of the listing agreement and hence it is the responsibility of the stock exchange. But officials with the stock exchanges on their part contend that it is difficult for them to find out whether a company had filed the documents in the manner required. They say that the fact that companies have to directly upload these documents onto the SEBI Web site maintained with technical support from National Informatics Centre (NIC) means that they will not be able to identify errant companies in this regard. Call it non-compliance of the regulatory norms or merely a technical problem as some have contended it is, the Edifar set up with much fanfare in June this year, on the lines of `EDGAR' a creation of the Securities and Exchange Commission of the US, has still some distance to go before it can claim to rank on par with its US counterpart.
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FINDINGS & OBSERVATIONS

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Merchant bankers to form panel to review public issue process

MERCHANT bankers are forming a "core committee" to review the process of public issues and fix definitive responsibilities for each of the intermediaries involved. This was decided in a meeting between the chief executive officers of merchant banking companies and Mr. G.N. Bajpai, Chairman and Mr. A.K. Batra, Whole-time member, Securities and Exchange Board of India. According to sources, the meeting was not about "finger pointing and placing blame" for what happened during the ONGC deal, and the focus was entirely on "what needs to be done in the future." Two of the prime suggestions raised by the merchant bankers were for the processes to be simplified and for responsibilities to be fixed between the intermediaries. The committee would revisit each of the processes involved in the offer. They would specially view it from "possible points of inflection" and proactively seek to plug holes before they morph into areas of concern, stated a participant. Further, it was clarified to SEBI that for various processes the merchant banker strictly plays only a coordination role. They felt it would not be possible for merchant bankers to be held responsible for each of these processes. "The merchant banker functions as a coordinator for a lot of the processes during the issue and is not in a direct position to prevent mishaps, if any. In view of this, the responsibility should also be restricted to what can be directly controlled by the merchant banker," a source. The core committee would also put in place various compliance and reporting requirements to ensure that "human error" is nipped in the bud. The constituents of the core committee are expected to be announced within the next few
49

days, according to merchant banking sources. Concerns were also raised about the quality of infrastructure among intermediaries, especially registrars. The merchant bankers and SEBI conceded that with issue sizes increasing substantially and the manifold increase in the number of retail applications, there has to be an upgradation of the infrastructure that the intermediaries employ. This not only includes computer hardware and software, but also the level of staffing in intermediaries, stated a source. The Association of Merchant Bankers of India (AMBI), which has been dormant during the last few years is being called to take an active part in the industry and in interacting with regulators and other intermediaries, claimed sources.

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SOURCE OF FUNDS
An enterprise in India has access to various types of short-term and long term financing. Short-term financing, mainly for working capital purposes, is usually provided by the commercial banks as a mix of cash credit and bills discounting facilities. There is also an active short-term money market for intercorporate specific-period borrowings. The RBI has permitted issuance of commercial paper by later corporations fulfilling certain conditions. The maximum maturity period for commercial paper is six months. Such paper is sold at a discount and redeemed at face value. Commercial paper rates of interest are below the bank prime lending rate. Certificates of Deposits (CD) can be issued by scheduled commercial banks at a discount from face value,with a maturity period ranging from 3 months to 1 years. Commercial working capital finance for exports is provided by the commercial banks which are in turn refinanced for this activity by the Export Import Bank of India (EXIM Bank). Long-term financing is available through various equity and debt instruments. Equity instruments include common and preferred stock and may be used to raise finance by public issue upon obtaining requisite approvals. The guidelines issued by the Securities and Exchanges Board of India for disclosures and investor protection must be complied with. The main sources of long-term debt are development finance by the all-India and state financial institutions, who lend mainly for investment in priority sector, and debentures (cumulative and non cumulative), which is a capital market instrument. A debt-equity norm of 1.5:1 is generally acceptable. A minimum level of promoter's contribution is also
51

required, which is non-transferable during a lock-in period of 5 years. Medium-term finance for non-priority sectors is also provided by commercial banks, who also participate with the financial institutions in financing priority sector projects. Foreign currency loans may also be accessed through lines of credit available to banks and financial institutions. Direct access to overseas lenders is regulated under foreign exchange controls. Foreign currency requirements are often met through supplier's credit or through loans from the foreign collaborator. Venture capital finance is not available extensively. A few units, mostly in the public sector, have been set up which provide equity/loan support to companies entering high-technology/high-risk areas. The total amount of capital available through this route is to date insignificant. The Government of India has issued guidelines for venture capital companies. All local sources of financing are available to foreign participation companies incorporated in India, regardless of the extent of foreign participation. Under Foreign Exchange Regulations, foreigners or non-residents, including foreign companies, require the permission of the Reserve Bank of India for borrowing from a person or company resident in India.

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INDUSTRIAL FINANCE IN INDIA

The major post-independence institutional innovations of relevance to long and medium term finance for the industry can be grouped as below : National Level Industrial Development Banks Industrial Development Bank of India (IDBI) Industrial Finance Corporation of India (IFCI) Industrial Credit and Investment Corpn. of India (ICICI) Small Industries Development Bank of India (SIDBI) Industrial Reconstruction Bank of India ( IRBI) Shipping Credit and Investment Company of India (SCICI)

Specialised Financial Institutions

Technology Development & Information Company of India Limited (TDICI) Risk Capital & Technology Finance Corporation Limited (RCTC) Tourism Finance Corporation of India (TFCI)

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Investment Institutions:
Unit Trust of India (UTI) General Insurance Corporation of India (GIC) Life Insurance Corporation of India (LIC)

State Corporations:
State Industrial Development Corporations State Finance Corporations

INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI)

IDBI initially having confined itself to medium and long- term credit to industry, now has expanded its services to include anything a corporate customer would ask for. Already into a wide range of activities in the financial sector, it is soon to start a commercial bank.

INDUSTRIAL FINANCE CORPORATION OF INDIA (IFCI)

Major activities are lending money with or without security, guarantees, leasing and hire purchase, ware housing, consultancy and merchant banking in and outside India, bill marketing, factoring, custodial services, dealing in foreign exchange and mutual funds.

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INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA (ICICI)

ICICI, established in 1955 has spun off the largest number of subsidiaries of all the financial institutions in India, including some famous names like SCICI, TDICI, Crisil, I-SEC and ICICI Asset Management Company.

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)

Small Industries Development Bank of India (SIDBI) established as a wholly owned subsidiary of Industrial Development Bank of India (IDBI) is the principal financial institution for promotion, financing and development of industry in the small scale sector.

SCICI - SHIPPING CREDIT & INVESTMENT COMPANY OF INDIA

The SCICI is a special financial institution catering particularly to the deep sea fishing sector providing term loans in rupees and foreign currencies for such purposes. Besides this, SCICI also provides financial guarantees, buyers / sellers lines of credit, leasing finance and merchant banking services for raising funds in the capital market. In selected cases, it also offers participation in equity. The rates of interest charged by SCICI are 18 to 20% per annum on rupee loans. On foreign currency loans the rates are 11 to 12% per annum on fixed rate loans and 2.5% to 3.5% over LABOR on floating rate loans. The promoters' contribution is expected to be 20% of project cost and the debt/equity ratio required is 2:1. SCICI takes up financing of larger projects in the range of over Rs.5 million. The projects are assessed based on the background/experience of the promoters,
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past track record, quality of management, technical financial and economic viability and a host of other factors. Where corrective measures are required to improve the viability prospects, the promoters are advised suitably.

STATE CORPORATIONS State Financial Corporations (SFCs)

State Financial Corporations (SFCs), operating at the state-level, form an integral part of the development financing system in the country. They function with the objective of financing and promoting small and medium enterprises for achieving balanced regional socio- economic growth, catalysing higher investment, generating greater employment opportunities and widening the ownership base of industry. At present, there are 18 SFCs in the country. SFCs extend financial assistance to industrial units by way of term loans, direct subscription to equity / debenture, guarantees and discounting of bills of exchange.

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BANKING IN INDIA
Banking in India is controlled by the Reserve Bank of India (RBI). Commercial Banks and Co-operative Banks are the two main categories of banks in the country. Commercial Banks fall into four classes Public sector banks, Private sector banks, Foreign Banks and Regional rural banks. There are 28 banks in the public sector, comprising the State Bank of India and its 7 associate banks and the rest are nationalised banks. There are 18 large private sector banks. There are 38 Private sector banks in total and 196 Regional rural banks. The foreign banks number 24. The public sector banks account for 90 per cent of the total banking business in India. Foreign banks numbering 24 with a total of 141 branches specialise in foreign trade and international banking. Co-operative banks serve mainly the needs of agriculture and allied activities, rural based industries and to a lesser extent, trade and industry in urban centres. The National Bank for Agriculture and Rural Development (NABARD). The National Bank for Agriculture and Rural Development (NABARD), in keeping with its role as an apex institution in the organised rural credit structure provides refinance facilities to various financial intermediaries. NABARD devises suitable policies and operational arrangements, from time to time, in order to vitalise the rural credit delivery system and to augment the flow of credit for rural development. NABARD provides finance for seasonal agricultural operations. Refinance assistance to Regional Rural Bank for enabling them to conduct their various activities including assistance under minor irrigation, grant of loans under IRDP, dairy development, farm mechanisation, etc. In so far as commercial banks are concerned, NABARD provides only refinance against the term loans issued by them under schematic landing for agriculture.
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CONCLUSION

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CONCLUSION
Merchant banking play a very important role of an encouraging and supporting force to the entrepreneur,corporate sector and the investors,. With this study we have find out that New issue market is growing with the fast pace.Now many Foreign investors are entering into the market.Foreign investors are putting a lot of money in this sector, There is a need of lot of merchant bankers who can manage all these operations.Now many financial institutions are changing their policies .The policy of decentralization and encouragement of small and medium enterprise will further increase the demand for technical and financial services which can be provided by merchant bankers.. We can see the development of debt market.The development of debt market will offer

tremendous opportunities to merchant bankers.This has further extended the role of merchant bankers to extended the role of merchant bankers as market makers for these instruments. As a result of liberalization and globalization the competition in the corporate sector is becoming intense . To survive in the competition, company are reviewing their strategy, structure and functioning .This offer good opportunities to merchant bankers. Therefore we can say that that the scope of merchant banking is vast and there lies immense opportunities ahead of merchant bankers. They should develop adequate infrastructure including expertise in order to provide full range of merchant banking services to corporate sector.

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REFERENCES

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REFERENCES

Books 1. Khan, M.Y., (1998) Financial Services, Tata McGraw

Hill, New Delhi. 2. Mishra, (1996) Venture Capital Financing, Shipra

Publication, New Delhi. 3. Pandey, I.M., (1999) Venture Capital - The Indian Experience, Pub.:

PHI, New Delhi. Research Articles & Journals 1. Aggarwal, Vipin. SEBI Venture Capital Guidelines: An

Appraisal, Charted Secretary, March 1998, pp. 227 -228. 2. Anandram, Sanjay, Venture Capital: The Writing on the

Wall, ICFAI Reader, Jan. 2004. 3. B. Ratna Ravishankar, Risk Finance: Venture Capital and

Private Equity Finance, The Chartered Accountant, Feb. 2005, pp. 1022-1029. 6. Chary. T. Satyanarayana, Working of Venture Capital

Funds, Udyog Pragati, Jan-March 2004.

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7.

Gompers, P. and Lerner, J. An Analysis of compensation in

the Venture Capital Partnership, Journal of Financial Economics, 51, 1999. 9. Subhash, K.B. & Govindakutty Nair, T. Globalisation and

venture Capital System, Udyog Pragati, July -Sept. 2004. pp.1-2. 10. Lerner, J. Venture Capitalists and the Decision to go

Public, Journal of Financial Economics, 35, pp. 294 -316.

Internet 1. 2. 3. 4. www.goolesearch.com www.goole.com www.indiainfoline.com www.sebi.com

5. www.vcline.com 6. www.financemedia.co m

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