Merchant Banks are a very important factor in the capital markets. They have a big role to play especially, in placing equity in the primary markets, through the Initial Public Offers route.

Public money or savings play a vital role in financing many big projects. Thousands of crores are raised every year from the markets either through equity or debt from the market. The merchant banks play a crucial role in helping the corporates raise money from there markets.

The SEBI issued guideline for the merchant bankers in April, 1990

The merchant banks undertake following activities:

1. Project finances advice.

2. Project appraisal

3. Capital restructuring

4. Issue management

5. Loan syndication

6. Foreign currency finances.

7. Investment management

8. Mutual Funds

9. Lease finance

10. Bills Discounting

11. Mergers & Acquisition

12. Working capital finance

13. Government consents

14. Arranging fixed deposits

15. Corporate counselling

16. Underwriting

17. Non-Resident investments

18. Restructuring of sick units.

19. Hire purchase

20. Money market operations