Merchant Banking is the process of lending money to a business, usually to buy inventory or other assets. Merchant banking is a process that has been around for centuries. The first recorded merchant banker was in Italy in the 1700s. Merchant banking has evolved over time, and now it is done through banks and other financial institutions. The most common form of merchant banking now is when a bank lends money to a business to buy inventory or other assets. There are many different types of merchant banking, but this article will focus on this one type. Merchant Banking can be done through various financial institutions, but this article will focus on banks because they are the most common form of lending.
What is Merchant Banking in India?
In India, merchant banking is an essential part of the financial services industry, and it has been around since the late 1800s when British merchants started to invest in Indian businesses. Merchant bankers specialize in advising companies on mergers and acquisitions, capital-raising, and other corporate finance activities. The main difference between them and other investment bankers is that they do not buy or sell securities for their accounts. Presently, a merchant banker in India can be understood as a person involved in the issue management business either by constructing arrangements regarding selling, buying, or contributing to the safety as an advisor, consultant, manager concerning the issue management. Merchant banking means services associated with financial services, consultation, management, advice, solution, and counselling to big corporate houses.
Objectives of Merchant Banking
Merchant banking provides capital to businesses that are not publicly traded on a stock exchange. Merchant banking aims to help these companies grow their business by providing them with the necessary capital. Merchant banks are usually found in the financial sector and provide raising capital, mergers and acquisitions, and other financial services.
Growth of Merchant Banking in India
The Indian merchant banking industry has seen significant growth in the past few years. With the rise of start-ups and e-commerce giants like Flipkart and Amazon India, there has been a need for more investments in Indian companies. This has led to an increase in the number of merchant bankers in India.
There are many reasons for this growth which include:
– The rise of start-ups
– The rise of e-commerce giants like Flipkart and Amazon India
– Increase in investments
– Rise in mergers and acquisitions
The Indian banking sector is one of the most dynamic in the world. It has seen a lot of change over the past few years. The recent demonetization move by Prime Minister Modi and the implementation of Goods and Services Tax (GST) have had a significant impact on this sector. The Indian banking sector has seen a lot of change over the past few years, with demonetization and GST having a significant impact on it. India is now one of the fastest-growing economies in the world, with an increasing number of people joining its workforce. This has led to increased demand for credit, especially from small and medium enterprises (MSMEs) which are often ignored by banks because they are considered risky investments. Some of the best merchant banking examples in India are Axis Bank Ltd., Kotak Mahindra Capital Company Ltd., Tata Capital Markets Ltd. and Reliance Securities Ltd.