defination

In banking, a merchant bank is a financial institution primarily engaged in offering financial services and
advice to corporations and to wealthy individuals. The term can also be used to describe the private
equity activities of banking.[1] The chief distinction between an investment bank and a merchant bank is
that a merchant bank invests its own capital in a client company whereas an investment bank purely
distributes (and trades) the securities of that company in its capital raising role. Both merchant banks
and investment banks provide fee based corporate advisory services including in relation to mergers and
acquisitions.

Meaning

needs of commercial international finance, stock underwriting, and long-term company loans. This
type of bank primarily works with other merchant banks and financial institutions with its prominent
role being that of stock underwriting, and the bank works in the realm of private equity where
securities of a company are not available for public trading.

Of the most common private equity investment strategies, these include venture capital, leveraged
buyouts, distressed investments, growth capital, and mezzanine capital. Leveraged buyouts generally
obtain majority control over existing or mature firms, whereas growth capital and venture gains invest
in younger or emerging corporations without obtaining the majority of control.

Merchant Banking Then and Now

Merchant banking began practice during the Middle Ages in Italy and was introduced by grain
merchants, making them the original banks.

In today’s world, merchant banking involves many activities to include credit syndication, portfolio
management, mergers and acquisitions counseling, and acceptance credit, etc. Today’s merchant
banks do not have the same characteristics of their predecessors.

Activities

The Bank is registered with SEBI as Category – I Merchant Banker for providing all the major
Merchant Banking services. Our gamut of Merchant Banking services includes:

 Issue Management Services – to act as Book Running Lead Manager/Lead Manager for
the IPOs/FPOs/Right issues/Debt issues
 Project appraisal
 Corporate Advisory Services
 Underwriting of equity issues
 Banker to the Issue/Paying Banker
 Refund Banker
 Monitoring Agency
 Debenture Trustee
 Marketing of the issue through a strong network of QIBs/HNIEs/Corporates and Retail
investor. The Bank itself is one of the major investor in the market having a treasury of
45000 crores.
Our Software for handling the Refund Banker is one of the best systems in the industry. Its
unique features provides online payment of the instrument by our 2470 branches in 733 centers,
online status of paid instruments, 100% reconciliation at any point of time etc.

The Bank has an exclusive and specialized Capital Market Service Branch at New Delhi for
providing Merchant Banking Services to the Corporate.

Depository Services

Bank offers Depository Services to its clients and has designated large network of branches to
cater to their demat requirements through Depository Participant of NSDL and CDSL
depositories. We also provide the Speed –e facility to demat account holders to submit their
delivery instructions through Internet. The Bank has recently launched “online securities trading
facility” in strategic alliance with IDBI Capital Market Services Ltd.

Financial services

1. ISSUE MANAGEMENT: UPFC provides expert services to manage public issues of the
companies successfully, It has already managed Public Issues as a lead Manager with great
success.
2. UNDERWRITING: In order to provide a protective umbrella to the public issues of its clients,
UPFC also underwrites the issue.
3. SUBSCRIPTION TO EQUITY SHARE: UPFC subscribes to the equity shares reserved under FI
quota, to enable the company to market the public issue effectively.
4. ADVISORY SERVICES: UPFC, with its long experience, advises its clients for various advisory
services such as capital Structuring, loan syndication etc.
5. PROJECT CERTIFICATION: UPFC also certifies the projects going to capital markets for raising
funds. This is a specialized activity of the Corporation.
6. OTHER FINANCIAL SERVICES: As a part of its commitment to provide professionalised
financial services to its clients, UPFC also offers Bill Discounting, Equipment Leasing & Hire
Purchase Services, Short- term loan, Brand Equity loan, etc to meet diversified requirements of
it's clients.