SCOPE FOR MERCHANT BANKING IN INDIA Scope for merchant banking in India [1] depends upon the following

factors: Size and dynamics of the market: Indian market is growing. In fact India is one of the largest emerging markets. Obviously, public issues, FDI, debt raising are on rise. Lots of new and green fried projects are happening. Merchant bankers have lots space to contribute. Restrictions-liberalization: More liberal the market is, more things are left to be decided by the corporate. Merchant bankers assist in decision making and hence their scope increases. With significant market freedom, merchant bankers work has increased many folds. Banking policies: RBI prefers that commercial banks do not indulge in merchant banking business directly. They should setup a subsidiary for the purpose. This limits scope of commercial banks and gives space to merchant bankers. This policy also results in fair business practices. Corporate culture: Corporate can do project appraisal & strategic restructuring in house as well. If the corporate prefer third-party independent assessment, then only they will engage merchant bankers. Otherwise merchant bankers role is only statutory as in issue management. Corporate dynamics: More happening in business gives more opportunities to merchant bankers. Mergers, takeover, acquisition, new Greenfield projects, fund raising for government institutions, active money market are all providing better business prospectus to merchant bankers.

Merchant Banking in India K.C. Gupta and Joginder Singh