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Merchant vs. Investment Banking Explained

Merchant banks primarily offer financial services and advice to corporations on managing their money, while investment banks help both corporations and governments raise capital through underwriting and securities issuance. The main differences are that merchant banks invest their own capital and offer smaller-scale financing options, while investment banks focus on facilitating large public offerings and trades securities on behalf of clients. Some examples of organizations in each field are merchant banks like Puneet Advisory Services and investment banks like JP Morgan and ICICI Securities. Both play important roles in providing financial services, but have distinct approaches to working with clients.

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Shweta Singh
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421 views12 pages

Merchant vs. Investment Banking Explained

Merchant banks primarily offer financial services and advice to corporations on managing their money, while investment banks help both corporations and governments raise capital through underwriting and securities issuance. The main differences are that merchant banks invest their own capital and offer smaller-scale financing options, while investment banks focus on facilitating large public offerings and trades securities on behalf of clients. Some examples of organizations in each field are merchant banks like Puneet Advisory Services and investment banks like JP Morgan and ICICI Securities. Both play important roles in providing financial services, but have distinct approaches to working with clients.

Uploaded by

Shweta Singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

MERCHANT BANKING

vs.
INVESTMENT BANKING

Presentation by:
Shikha Gaba
Rahul Nigam
Vipan Kumar
Saket Ajmera
Parineeta Sharma
Ayan Chakraborty
Merchant Banking

Merchant bank is a financial institution primarily


engaged in offering financial services and advice
to corporations on HOW to use their money.
Merchant Banking
• Perform international financing activities
• Project consulting and financing
•Identifying promising projects
•Prepare feasibility studies
•Prepare in-depth project reports
•Assist invest in obtaining licenses
•Arrange & negotiate foreign collaboration
•Capital Restructuring
•Working Capital Finance
•Syndication of loans
•Lease Financing
Investment Banking

An Investment bank is a financial institution that


assists corporations and governments in raising
capital by underwriting and acting as the agent in
the issuance of securities. An investment bank
also assists companies involved in mergers and
acquisitions, derivatives, etc. Further it provides
ancillary services such as market making and the
trading of derivatives, fixed income instruments
 foreign exchange, commodity, and equity
securities.
Difference between merchant banking &
Investment banking
• Merchant Banks offer financial services and advices to
wealthy individuals and corporations. 
Investment banks are financial institutions supporting
governments and corporations, that help to raise
capital.
• Main difference between merchant banking and
investment banking is mode of wealth
management and services offered. Merchant banks
invest their own capital in business operation of clients.
Investment bank primarily trades and distributes
securities of their clients while raising capital.
Difference continued……
• Investment banks focus on initial public offerings (IPOs)
and large public and private share offerings whereas
Merchant banks tend to operate on small-scale
companies and offer creative equity financing, bridge
financing, and a number of corporate credit products
• Merchant banks still offer trade financing products to
their clients whereas Investment banks rarely offer
trade financing because most investment banking
clients have already outgrown the need for trade
financing and the various credit products linked to it.
Merchant bankers

Five Organizations dealing in Merchant Banking


•  Puneet Advisory Services Pvt Ltd
• Allianz Securities Ltd 
• Bajaj Consultants Pvt Ltd
• DSP Merrill Lynch Ltd
• Canara Bank
Services provided
• Lead & Manage IPO.
• Manage Rights and Public Issues.
• Manage De-Listing of Shares.
• Manage Qualified Institutional Placement of
Shares.
• Manage Take-over and Acquisitions of Indian
Companies.
• Issue Certificates for ESOP as per SEBI provisions.
• Manage Public Issue of Corporate Debt
Instruments.
Investment Bankers

Five Organisations dealing in Merchant Banking


• SBI Capital Markets ltd
• JP Morgan
• ICICI Securities
• Kotak Mahindra
• UBS Investment Bank
Functions of Investment Banking:
• Investment banking helps public and private
corporations in issuance of securities in the
primary market. They also act as intermediaries
in trading for clients.
• Provides financial advice to investors
• Assisting the investors in purchasing and trading
securities
• Managing financial assets
• Advising for mergers and acquisitions
THANK YOU

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