APRESENTATION

ONNON- BANKING FINANCIAL

COMPANIES

PRESENTED BY-PARAS VIJRAHUL GODSEVINKESH PATELPRIYANKA SHAHANE

MEANING AND CONCEPT-A Non Banking Financial Company (NBFC) is:

1. a company registered under the Companies Act, 1956 of India,

2. engaged in the business of Loans and Advances, 3. Acquisition of Shares, Stocks, Bonds, Insurance

business or Chit Fund Business,4. But does not include any institution whose principal

business is that includes agriculture or industrial activity,

5. or the sale, purchase or construction of immovable property.

NON BANKING FINANCIAL COMPANIES

1) Leasing Companies.

2) Housing Finance Companies.

3) Venture Capital Funds.

4) Merchant Banking Organization.

5) Credit Rating Agencies.

6) Factoring and Forfeiting Organizations.

7) Stock broking firms.

8) Depositories.

TYPES OF NON BANKING FINANCE

COMPANIESThe various NBFC’s are :-

introductionto

MERCHANT BANKING

MEANING AND CONCEPT-

MERCHANT BANKING

An organization that –

1. acts as an intermediary between the issuers and the purchasers of securities in the primary market,

2. that helps companies to raise capital,

3. underwrites corporate securities,

4. provides advisory services to its clients.

1. Corporate Counseling.2. Project counseling.3. Project finance.4. Underwriting.5. Portfolio Management.6. Working Capital Finance.7. Off Shore Financing.8. Mergers, Amalgamations and Takeovers.9. Venture Capital Financing.10. Arrange for rehabilitation of sick projects.

MERCHANT BANKING

VARIOUS SERVICES RENDERED -

MERCHANT BANKING

TYPES OF MERCHANT BANKING COMPANIES -

There are four types of MB Companies :-

Category I MB : can act as Issue managers.

Category II MB : can act only as co-managers.

Category III MB : can act as co-managers but cannot

undertake portfolio management.

Category IV MB : can merely act as consultant or advisor to

issue of capital.

SEBI’s authorization is a must to act as merchant bankers. Authorization criteria include-

Professional qualification in Finance, Law or Business

Management.

Infrastructure like Office space, Equipments and Man

power

Capital Adequacy.

Past track of record, experience, general reputation and

fairness in all transactions.

MERCHANT BANKING

SEBI GUIDELINES -

Half-yearly Unaudited Financial Statements has to be submitted.

Prohibition of buying Securities of their clients, based on the

unpublished price sensitive information.

Every MB shall appoint a ‘Compliance Officer‘ to monitor

compliance of the Act.

An initial Authorization Fee, Annual Fee and Renewal Fee may

be collected by SEBI.

A Lead Manager has an Underwriting Obligation of 5% of size of

Issue or Rs.25 lakhs whichever is less.

MERCHANT BANKING

SEBI GUIDELINES -