Page 137 - DCOM208_BANKING_THEORY_AND_PRACTICE

Banking Theory and Practice

Notes Credit syndication services overlap with the activities of project finance and project counselling.
But the loan syndication also includes the preparation of applications for financial assistance
from financial institutions/banks.

Issue Management and Underwriting

Issue management and underwriting refers to the activities relating to the management of the
public issues of corporate securities, viz. equity shares, preference shares, and debentures of
bonds, and are aimed at mobilization of money from the capital market.
Following are some of the popular services provided by merchant bankers in this regard:
1. Preparation of an action plant.
2. Preparation of CCI application and assisting in obtaining consent/acknowledgement.

3. Preparation of budget for the local expenses for the issues.
4. Selection of issues Houses and advertising agencies for undertaking pre and post-issue
publicity.

5. Obtaining the approval of institutional underwriters and stock exchanges for publication
of the prospectus.
6. Drafting of prospectus

7. Selection of institutional and broker underwriters for syndicating/underwriting
arrangements.

Portfolio Management

Portfolio management can be defined as making decisions for the investment of cash resources
of a corporate enterprise in marketable securities by deciding the quantum, timing and the type
of security to be bought.
The services covered are as follows:

1. Undertaking investment in securities.
2. Undertaking review of Provident fund investment, Trust investment, etc.
3. Undertaking investment for non-resident Indians, on both repatriation and
non-repatriation basis.
4. Collecting and remitting interest and dividend on investment.
5. Carrying out a critical evaluation of investment portfolio.
6. Safe custody of securities in India and overseas.

7. Providing advice on selection of investments.

Working Capital Finance

The finance required for meeting the day-to-day expenses of an enterprise is known as ‘Working
Capital finance’.
1. Assessment of working capital requirements.

2. Preparing the necessary application to negotiations for the sanction of appropriate credit
facilities.

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