chandni final project (autosaved)41

1Merchant Banking

UNIVERSITY OF MUMBAI

PROJECT ON

MERCHANT BANKING

Bachelor of Commerce

Banking & Insurance

Semester -V

(2009-2010)

Submitted By

Chandni.H.Shah

Roll No.41

LAXMI CHARITABLE TRUST

SHRI CHINAI COLLEGE OF COMMERCE & ECONOMICS

ANDHERI (EAST) MUMBAI-400069

T.Y.Bcom (Banking & Insurance)SEM-V

2Merchant Banking

UNIVERSITY OF MUMBAI

PROJECT ON

MERCHANT BANKING

Bachelor of Commerce

Banking & Insurance

Semester V (2009-2010)

Submitted

In Partial Fulfillment of the requirements for the Award of

Degree of Bachelor of Commerce - Banking & Insurance

By

Chandni.H.Shah

Roll No.41

LAXMI CHARITABLE TRUST

SHRI CHINAI COLLEGE OF COMMERCE & ECONOMICSANDHERI (EAST) MUMBAI-400069


3Merchant Banking

Declaration

I -------------------------------------- student of T.Y.B.Com (Banking &

Insurance) Semester V (2009-2010) SHRI CHINAI COLLEGE OF COMMERCE

& ECONOMICS hereby declare that I have completed the project on

---------------------------------.

The information submitted is true and original to the best of my

knowledge.

----------------------

Signature of student

------------------ ----

Name of the Student

CERTIFICATE

This is to certify that Miss ---------------------------------- student of T.Y.B.Com

(Banking & Insurance) Semester V (2009-2010), SHRI CHINAI COLLEGE OF

COMMERCE & ECONOMICS, has successfully completed the project on

“MERCHANT BANKING” under the guidance of Prof. Nishikant Jha.

Course Co-ordinator Principal

Project Guide/Internal Examiner

External Examiner


4Merchant Banking

ACKNOWLEDGEMENT

This goes to all who have knowingly or unknowingly been a

great support for me to accomplish this piece of work.

Entrance, hard work, gradual progress and an exciting year, that is

how I have reached this level and now as I stand at the threshold of the aside

world, I take a look of the past year which I have spent in this college, our

performance with the devotion of the profession and all the fun I had was like a

beautiful dream come true.

First of all I would like to take this opportunity to thank the

Mumbai University for having projects as a part of the Banking and Insurance

curriculum.

Many people have influenced the shape and content of this project,

and many supported me through it. Secondly, I would like to thank my College

Principal Dr. MALINI JOHARI for supporting in everything and then our

Coordinator, Prof. NISHIKANT JHA for encouraging me in everything I did

and for supporting me. I express my sincere gratitude to Prof. NISHIKANT

JHA for being my Project Guide and for assigning me a project on Merchant

Banking which is an interesting and exhaustive subject. And also to the librarian

and working and non-working staff of our college for providing all kind of

support that was needed for the project.

Prof. NISHIKANT JHA has been an inspiration and role model

for this topic. Her guidance and active support has made it possible to complete

the assignment.


5Merchant Banking

EXECUTIVE SUMMARY

Although merchant banking activity was ushered in two decades ago, it was

only in 1992 after the formation of Securities and Exchange Board of India that

it is defined and a set of rules and regulations in place. Today a merchant

banker is who has the ability to merchandise that is, create or expand a need and

fulfill capital requirements.

I have given an overview about the financial markets and the role of merchant

bankers in the growth of these markets. My project covers how the merchant

banks works, rules & regulations laid by SEBI & its impact on the merchant

banking activities. Their importance in the economy is expected to grow even

further in the coming years with an increasing proportion of household savings

getting invested in corporate & other securities. I have covered several services

provided by Merchant Bankers & the role of Merchant bankers in providing

those services to the business world.

Finally, to get the practical knowledge about merchant banking activities I have

visited ICICI Bank.


6Merchant Banking

INDEX

SR.NO. CONTENTS PAGE NO.

1. Introduction 1

2. Definition & Meaning 2

3. History of Merchant Banking 44. Growth of Merchant Banking in India 5

5. Registration Of Merchant Bankers 6

6. Objectives Of Merchant banking in Prevailing Economy 7

7. Need and Importance of Merchant Bankers 8

8. Role of Merchant Banker 10

9. Problems of Merchant Bankers 12

10. Organizational setup of Merchant Banking in India 13

11. Qualities of good Merchant Banker 15

12. Responsibilities of Merchant Banker 18

13. Services rendered by Merchant Bankers 21

14.Merchant Banking-Future Development

37

15. Merchant Banks & Commercial Banks 4116. Survey Form 4317. Survey report 4418. Self Evolutions & suggestions 46-4719. Visit To Bank 4820. Conclusion 49


7Merchant Banking

21. Bibliography 50

Introduction

Merchant banking

The dictionary meaning of merchant bank refers to an organization that

underwrites corporate securities and advises such clients on issues like

corporate mergers, etc. involved in the ownership of commercial ventures. This

organization may be a bank, corporate body, firm or proprietary concern.

Merchant banking started with the management of public issues and loan

syndication and has been slowly and gradually covering activities like project

counseling, portfolio management, investment counseling and mergers and

amalgamation of the corporate firms. Although, merchant banking organizations

present a long list of services they contemplate to render to their clients but the

main services so far being rendered by them are those as authorized by the

SEBI.


8Merchant Banking

Definition

The first authoritative definition for the term ‘Merchant Banker’ has been given

in the Rule 2 (e) of SEBI (Merchant Bankers) Rules, 1922. Accordingly, “A

Merchant Banker means any person who is engaged in the business of Issue

Management either by making arrangements regarding selling, buying or

subscribing to Securities as Manager, Consultant, Adviser of rendering

Corporate Advisory Service in relation to such Issue Management”.

Sec/5 (b) of the Banking Regulation Act, 1949 defines Banking as “accepting,

for the purpose of lending or investment of deposits of money from the public,

repayable on demand or otherwise and withdraw able by cheque, draft, order or

otherwise”.

The Notification of the Ministry of Finance defines a merchant banker as, “any

person who is engaged in the business of issue management either by making

arrangements regarding selling, buying or subscribing to the securities as

manager, consult, adviser or rendering corporate advisory service in relation to

such issue management”.

Meaning

Merchant banking is an activity that includes corporate finance activites, such as

advice in complex financing mergers and acquisition advice, and at times direct

equity investment in corporation by banks.

Merchant banking implies investment management. Companies raise capital by

issuing securities in the market. Merchant bankers act as intermediaries between

the issuers of capital and the investors who purchased securities. Merchant


9Merchant Banking

banking is the financial intermediation that matches entities that need capital

and those that have capital for investment.


10Merchant Banking

History of Merchant Banking

Origin of merchant banking

The origin of merchant banking can be traced back to the 13 th century when the

development of international trade and finance took place. The early merchant

bankers were traders of commodities. These bankers also acted as bankers to the

kings of European States and financed continental wars and coastal trades. The

earlier merchant bankers used to lend their name to the lesser known traders by

accepting bills through which they guaranteed that the holder of the bill would

receive full value on the date of payment. Although merchant banking activity

was ushered in two decades ago, it was only in 1992 after the formation of

Securities and Exchange Board of India that it is defined and a set of rules and

regulations in place. Hence the name merchant was used because of its roots in

merchant trade.


11Merchant Banking

The Growth of merchant banking in India

In India prior to the enactment of Indian Companies Act, 1956,managing agents

acted as issue houses for securities, evaluated project reports, planned capital

structure and to some extent provided venture capital for new firms. Few share

broking firms also functioned as merchant bankers.

Formal merchant activity in India was originated in 1969 with the merchant

banking division setup by the Grind lays Bank, the largest foreign bank in the

country. The main service offered at that time to the corporate enterprises by the

merchant banks included the management of public issues and some aspects of

financial consultancy. Following Grind lays Bank, Citibank set up its merchant

banking division in 1970.The division took up the task of assisting new

entrepreneurs and existing units in the evaluation of new projects and raising

funds through borrowing and equity issues. Management consultancy services

were also offered. Merchant bankers are permitted to carry on activities of

primary dealers in government securities. Consequent to the recommendations

of Banking Commission in 1972, that Indian banks should offer merchant

banking services as part of the multiple services they could provide their clients,

State Bank of India started the Merchant Banking Division in 1972. In the initial

years the SBI’s objective was to render corporate advice and assistance to small

and medium entrepreneurs.

The commercial banks that followed State Bank of India were Central Bank of

India, Bank of India and Syndicate Bank in 1977.Bank of Baroda, Standard

Chartered Bank and Mercantile Bank in 1978 and United Bank of India, United

Commercial Bank, Punjab National Bank, Canara Bank and Indian Overseas


12Merchant Banking

Bank in late ‘70s and early ‘80s. Among the development banks, ICICI started

merchant banking activities in 1973 followed by IFCI (1986) and IDBI (1991).

Registration of merchant bankers

Registration with SEBI is mandatory to carry out the business of merchant

Banking in India. An applicant should comply with the following norms:

The applicant should be a body corporate

The applicant should not carry on any business other than those

connected with the securities market

The applicant should have necessary infrastructure like office space,

equipment, manpower etc.


13Merchant Banking

Objectives of Merchant Banking in Prevailing Economy:

* To study the significance of Merchant Banking towards the development of

securities industry.

* To analyze issue management regulations.

* To analyze the functions of Merchant Banking in relation to rules and

regulations of SEBI.

* To evaluate the performance of Merchant Bankers, both activity performance

and operational and financial performance.

* To draw a conclusion and suggestions based on the analysis and experiences.


14Merchant Banking

Needs and Importance of Merchant Bankers

Followings are the needs and importance of merchant banking:

1. Important reason for the growth of merchant banking has been

developmental activity throughout the country, exerting excess demand

on the sources of funds for ever expanding industry and trade, thus,

leaving a widening gap unabridged between the supply and demand of

inventible funds.

2. All Indian financial institutions and experienced resources constraint to

meet the ever increasing demands for funds from the corporate sector

enterprises. In the circumstances corporate sector had the only alternative

to avail of the capital market services for meeting their long-term

financial requirements through capital issues of equity and debentures.

3. With the growing demand for funds there was pressure on capital market

that enthused the commercial banks, share brokers and financial

consultant firms to enter into the field of merchant banking and share the

growing capital markets.

4. With the result, all the commercial banks in nationalized and public

sector as well as in private sector including the foreign banks in India

have opened their merchant banking windows and are competing in this

field.

5. There has been a mushroom growth of financial consultancy firms and

broker firms doing advisory functions as well as managing public issues

in syndication with other merchant bankers.

6. The need of merchant banking institutions is felt in the wake of huge

public savings lying still untapped.


15Merchant Banking

7. Merchant banks can play highly significant role in mobilizing funds of

savers to investible channels assuring promising return on investments

and thus can help in meeting the widening demand for investible funds

for economic activity.

8. Merchant banks have been procuring impressive support from capital

market for the corporate sector for financing their projects. This is

evidenced from the increasing amount raised form the capital market by

the corporate enterprises year after year.

9. Merchant bankers, with their skills, updated information and knowledge,

provide this service to the corporate units and advise them on such

requirements to be complied with for raising funds from the capital

market under different enactments viz. Companies Act, Income-tax Act,

Foreign Exchange Regulation Act, Securities Contracts (Regulation) Act

and various other corporate laws and regulations.

10. Thus, the merchant bankers help the industry and trade to raise funds and

the investors to invest their saved money in sound and healthy concerns

with confidence, safety and expectation for higher yields.


16Merchant Banking

Role of Merchant Banker

The role of merchant banker is dynamic in the wake of diverse nature of

merchant banking services.

1) Merchant banker’s dynamism lies in promptly attending to the corporate

problems and suggests ways and means to solve it. The nature of merchant

banking services is development oriented and promotional to help the industry

and trade to grow and survive. Merchant banker is, therefore, dedicated to

achieve this objective through his dynamism. He is always awake to renew his

skills, develop expertise in new areas so as to equip himself with the knowledge

and techniques to deal with emerging new problems of corporate business

world.

2) He has to keep pace with the changing environment where government rules,

regulations and politics affecting business conditions frequently change; where

science and technology create new innovations in production processes of

industries envisaging immediate renovations, diversifications, modernizations

or replacements of existing plant and machinery or other equipments putting

new demands for finances and necessitating overhauling of the capital structure

of the firms.

3) Merchant banker has to think and devise new instruments of financing

industrial projects. He has to guide the wider section of the community

possessing surplus money to invest in corporate securities and other productive

investment channels.

4) He has to help the industry in different forms to ensure that it runs risk free

and devoid of uncertainty by assisting the promoters with his knowledge and

skills to resolve the problems being faced by them. He has to watch the interest


17Merchant Banking

and win over the confidence of the government, its agencies, along with the

entrepreneurs, the investors and the whole community.

5) He must bridge the communication gap between different sections and

resolve the problem being faced in different areas concerned with the business

world.

To discharge the above role, a merchant banker has to be dynamic. In the days

ahead, merchant bankers have very significant role to play tuning their activities

to the requirements of the growth pattern of the corporate sector, the industry

and the economy as a whole which is, in it, a challenging task and to meet these

challenges merchant bankers will have to be more vigorous and strategic in

playing their role. They will have also to adopt new ways and means in

discharging their role.


18Merchant Banking

Problems of Merchant Bankers

1. SEBI guidelines have authorized merchant bankers to undertake issue related

activities only with an exception of portfolio management. These guidelines

have made the merchant bankers either to restrict their activities or think of

separating these activities from the present one and float new subsidiary and

enlarge the scope of its activities.

2. SEBI guidelines stipulate a minimum net worth of Rs.1 crore for

authorization of merchant bankers. Small but professional and specialized

merchant bankers who do not have a net worth of Rs.1 crore may have to close

down their business. The entry is denied to young, specialized professionals into

merchant banking business.

3. Non co-operation of the issuing companies in timely allotment of securities

and refund of application money is another problem of merchant bankers. The

guidelines have put the responsibility on the merchant bankers. They have to

seek the co-operation of the issuing company to shoulder the responsibility.


19Merchant Banking

Organizational setup of merchant bankers in India

In India a common organizational setup of merchant bankers to operate is in the

form of divisions of Indian and foreign banks and financial institutions,

subsidiary companies established by bankers like SBI, Canara Bank, Punjab

National Bank, Bank of India, etc. Some firms are also organized by financial

and technical consultants and professionals. Securities and Exchange Board of

India has divided the merchant bankers into four categories based on their

capital adequacy. Each category is authorized to perform certain functions.

From the point of organizational setup India’s merchant banking organizations

can be categorized into four groups on the basis of their linkage with parent

activity. They are:

(A) Institutional Base

Where merchant banks function as an independent wing or as subsidiary of

various private/Central Governments/State Governments financial institutions.

Most of the financial institutions in India are in public sector and therefore such

setup plays a role on the lines of government priorities and policies.

(B) Banker Base

These merchant bankers function as division/subsidiary of banking

organization. The parent banks are either nationalized commercial bank or the

foreign banks operating in India. These organizations have brought

professionalism in merchant banking sector and they help their parent

organization to make a presence in capital market.

(C) Broker Base

In the recent past there has been an inflow of qualified and professionally

skilled brokers in various stock exchanges of India. These brokers undertake


20Merchant Banking

merchant banking related operations also like providing investment and

portfolio management services.

(D) Private Base

These merchant banking firms are originated in private sector. These

organizations are the outcome of opportunities and scope in merchant banking

business and they are providing skill-oriented specialized services to their

clients. Some foreign merchant bankers are also entering either independently

or through some collaboration with their Indian counterparts. Private sector

merchant banking firms have come up either as the sole proprietorship or public

limited companies. Many of these firms were in existence for quite some times

before they added a new activity in the form of merchant banking services by

opening new divisions on the lines of commercial banks and All India Financial

Institutions.


21Merchant Banking

Qualities of good merchant bankers

Merchant bankers are individual experts who organize and manage the

merchant banks. The operations of merchant banks are, therefore, influenced by

the personality trait of these individuals. For the success of merchant banks’

operations, the qualities which merchant bankers should have are discussed

below:-

1. Leadership – Merchant banker should posses all relevant skills, updated

knowledge to interact with the clients and effectively communicate.

Leadership is synonymous with followers who follow the one who leads.

2. Aggressive action – Aggressiveness is a personality trait of a good leader

but in merchant banking it has a wider connotation. Aggressive merchant

bankers are always looking for new business. Once a business

opportunity has been located, the merchant banker has got to obtain the

mandate for the merchant banking assignment from the clients at once

which will depend upon his own communication skills, persuasiveness

and the background of the organization to which he belongs. A good

merchant banker is one who does not allow his client to think anything

outside except what has been advised. Therefore, promptness in grasping

the clients’ problems and providing better choice amongst alternative

solutions evidence aggressive approach in the profession to hold the

client’s interest in entirety for the present as well as the future.

3. Co-operation and friendliness – No doubt, these two characteristics are

the symbols of good leadership but it hardly needs to be stressed that

cooperation and friendliness coupled with persuasiveness are the main

instruments with which a merchant banker mixes with the people, gathers

information, obtains business mandate and renders satisfactory services to


22Merchant Banking

the clients. Business of an honest merchant banker spreads with

geometrical propagation when he shares the thoughts of his clients with

sympathetic gestures and offers pragmatic suggestions without greed or

favors. Very often, rude, intemperate and indifferent disposition or blunt

out burst withdraw fortunate business opportunities forever. These are the

vices unbecoming of a merchant banker and should be eschewed.

Friendliness and cooperation must flow as natural traits in the merchant

banker to win over the trust of the clients like a doctor or lawyer who

retain their clients permanently.

4. Contacts – Success of a merchant banker depends upon his sociable

nature and the richness of wider contacts. A merchant banker is supposed

to be acquainted deeply with all the constituents of merchant banking.

The scope of contact encompasses intimate contiguity and acquaintances

within his own organization, Central and State Government Offices

where compliances under various relevant enactments are to be reported,

Indian and foreign banks, financial institutions at Central and State levels,

promoters/directors/owners and chief executives of the private and public

enterprises which would be prospective beneficiaries of merchant

banking services, printers, advertising agencies, brokers and stock

exchange dealers, advocates and solicitors and members of the press

whose services are availed of in executing merchant banking

assignments. Merchant banker should widen contacts and references and

continue to maintain them in goodness, honour and humour by meeting

people in person, through writing and in special gatherings.

5. Attitude towards problem solving – The most important personality

trait of a merchant banker is his attitude towards problem solving.

Positive approach to understand the view point of others, their difficulties

and their adverse circumstances is possible only when a person is skilled


23Merchant Banking

in human relations particularly the inter-personal and intra-personal

behavior. Effective communication and proper feedback are the pre-

requisites for creating a positive attitude towards problem solving which

could be gains partly through learning process and partly as an in-born

quality. This trait is a subject matter of personality development but is so

important that it must be treated as a separate objective quality of a good

merchant banker.

6. Inquisitiveness for acquiring new skills, information and knowledge –

Merchant bankers live on the wits they earn by giving information to

needy clients. Therefore, they should keep abreast with latest information

in the area of the service product, they market. This is possible if

merchant bankers posses the quality of inquisitiveness.

The above qualities of a merchant banker are only illustrative. All good

qualities in merchant bankers are difficult to be defined so elaborately.

Nevertheless, merchant banker should possess super business acumen,

managerial abilities, administrative capacities and salesmanship so as to

understand the problems of trade and industry, devise ways and means to sort

out and resolve those problems and sell the service product to the needy clients.


24Merchant Banking

Responsibility of Merchant Banker

To the Investors

Investor protection is fundamental to a healthy growth of the Capital Market.

Protection is not to be conceived as that of compensating for the losses

suffered. The responsibility of the Merchant Banker in ensuring the

completeness of the disclosures is of paramount importance in view of the

fact that entire reliance is based on offer Document either Prospectus or

Letter of Offer because an independent agency like a Merchant Banker has

done the scrutiny.

Capital structuring

The Merchant Bankers while designing the capital structure take into

account the various factors such as Leverage effect on earnings per share, the

project cost and the gestation period, cash flow ability of the company, the

cost of capital, the considerations of management control, size of the

company, and general economic factors. These exercise are done mainly in

order to meet the fund requirement of the company taking due cognizance of

the investor’s preference.

Project Evaluation and due Diligence

Due diligence and project evaluation is another major responsibility of the

Merchant Banker. Where the project has already been appraised by a

bank/financial institution, the Merchant Banker relies on the said appraisal

before accepting an assignment. However, where the project has not been

appraised by as bank/financial institution, the Merchant Bank undertakes a

detailed evaluation of the project before taking up an assignment for issue

management.


25Merchant Banking

Legal aspect

The factors that are looked into in case of the legal aspects are:

a) Compliance with the SEBI guidelines and the various guidelines issued

by the Ministry of Finance and Department of Company Affairs.

b) Pending litigation’s towards tax liabilities or any criminal/civil

prosecution any of the directors for any offenses.

c) Fair and adequate disclosures in the prospectus.

Pricing of the Issue

The Merchant Banker looks into the various factors while pricing the issue.

Some of the factors are past financial performance of the company, Book

value per share, stock market performance of the shares. The Merchant

Banker has a vital role to play in pricing of the instrument.

Marketing of the Issue

Marketing of the issue is a vital responsibility of the Merchant Banker. The

first stage is Pre-issue marketing for placement of the issue with the financial

institutions, banks, mutual funds, FII’s and NRI’s. The second stage is the

marketing of the issue to the general public through various vehicles such as

press, brokers, etc.

Bought out Deals

The concept of wholesale but out of public offerings by the Merchant

Bankers started off with over the Counter Exchange of India where a

Merchant banker acts also as a sponsor and either takes up the entire issue to

be offered wholly of jointly with other co-investors and off-loads the same to

the public at a later date by an offer for sale. Major amendments were made


26Merchant Banking

to the SEBI regulations regarding Merchant Bankers. The duration of this

transaction period has not officially been announced.


27Merchant Banking

Services Rendered By Merchant Bankers

Among the important financial intermediaries are the merchant bankers. The

services of Merchant bankers have been identified in India with just issue

management. It is quite common to come across reference to merchant banking

and financial services as though they are distinct categories. The services

provided by merchant banks depend on their inclination and resources -

technical and financial. Merchant bankers (Category 1) are mandated by SEBI

to manage public issues (as lead managers) and open offers in take-overs. These

two activities have major implications for the integrity of the market. They

affect investors' interest and, therefore, transparency has to be ensured. These

are also areas where compliance can be monitored and enforced.

Merchant banks are rendering diverse services and functions, which are as

follows:-

1. Issue Management

2. Corporate Advisory Services Relating To Issue

3. Underwritings

4. Dealing In Mergers & Acquisition Activity

5. Project counseling

6. Loan Syndication

7. Restructuring services

8. Capital assistance

9. Corporate advisory Services

10.Factoring service

11.Asset Securitization

12.Forex Services

13.Hire-Purchase Service

14.Lease Finance Companies


28Merchant Banking

15.Venture capital

ISSUE MANAGEMENT:

The public issue of securities is the core of merchant banking function. At

one time it was constructed as the sole function. Merchant bankers were

identified as issue houses. It was later perceived that they provide other

financial services. When companies seek to raise resources for

implementation of a new project or finance expansion or modernization or

diversification of an existing unit or fund long term working capital

requirement, they retain the services of a merchant banker. To a large extent

the type of issue would vary with the purpose for which funds are raised.

Merchant bankers when retained as managers to issue will have to assist the

company in all the stages connected with public issue.

The merchant bankers help corporate to raise money from the markets

through the issue of shares, debentures, bonds etc. They are designated as

managers to the issue. Their main business is to attract public money to

capital issues.

They usually render the following services:

Drafting of prospectus and getting it approves from the stock exchanges.

Obtaining consent/acknowledgement from SEBI.

Appointing bankers, underwriters, brokers, advertisers, printers etc.

Obtaining the consent of all the agencies involved in the public issue.

Holding road shows, to sell the issue. These shows are held for the analysts,

brokers & institutional investors. The purpose of these shows is to answer

queries from these people about the company and the project for which the

funds are being raised.

Deciding the pattern of advertising.


29Merchant Banking

Deciding the branches where application money should be collected.

Deciding the dates of opening and closing of the issue.

Obtaining the daily report of application money collected at various

branches.

Obtaining subscription to the issue.

After the close of the issue, obtaining consent of stock exchange for deciding

basis of allotment etc.

CORPORATE ADVISORY SERVICES RELATING TO THE ISSUE

In India, the pricing of issues is now freely decided by the company, with

valuable inputs from the merchant bankers, who have to sell the issue at the

decided price. The pricing of the issue especially in a public issue is very

important. The pricing has to be such that the investors will be attracted to

invest in the issue at that price, at the same time the company should get the

premium that it is looking for. After all, the premium can play a very role in

deciding the company’s capital structure, as larger the premium lesser will

be the requirement for borrowed funds.

The promoter also needs to decide whether to go in for a fresh issue or to go

for a rights issue. However this will depend mainly on the quantum of funds

that the company needs to raise. The success of the issue is dependent on the

selection of the right type of security. In this matter, the expert advice of

merchant bankers is of immense importance.

In the issue management the merchant bankers have to coordinate the

various agencies to the issue. The success of the issue depends on the

cooperation of all the agencies involved.

The merchant bankers offer following services during the public issues:


30Merchant Banking

Preparing an action plan and budget for the total expenses for the issue.

Preparation of application to SEBI and assistance in obtaining the consent

from SEBI.

Drafting of the prospectus.

Selection of underwriters, Brokers etc.

Selection of bankers to the issue.

Selection of advertising agency for publicity.

Obtaining approval of the institutional underwriters and stock exchanges for

publication of the prospectus.

Companies are free to appoint one or more agencies as Managers to an issue.

SEBI guidelines insist that all issues should be managed by at least one

authorized merchant banker, functioning either as the sole or lead manager to

the issue. Ordinarily, not more than two merchant bankers should be

associated as lead managers, advisors and consultants to a public issue. In

issues of over Rs. 100 crores, the number could be up to a maximum of four.

The responsibilities of merchant bankers in management of public issues are

many. Some of these are:

We have seen that many unscrupulous promoters have raised money from

the market. This has hurt the investors a lot and has also made investors

nervous about stock market investments. This in turn affects the functioning

of stock markets both the primary and the secondary markets. It is therefore

necessary that merchant bankers are satisfied with the viability of the project,

which they can then sell to the investors with confidence. It is therefore

important for the reputation of merchant bankers, to only associate

themselves with good issues.


31Merchant Banking

The merchant banker should act as the custodians of the investors money and

this puts a lot of responsibility on them. To discharge this function the

merchant bankers have to exercise due diligence independent by verifying

the contents of the prospectus and the reasonableness of the views expressed

therein.

It is the responsibility of the merchant bankers to get the securities listed on

all the stock exchanges mentioned in the prospectus. With the introduction of

Demat accounts the complaints about allotment have surely gone down. It is

the responsibility of the merchant bankers to ensure timely refunds and

allotment of securities to the investors.

The merchant bankers have to certify that they verified everything and that

they believe it to be true. This assures the investing public about the safety

of their investment. The precautions by the merchant bankers would ensure

that all the fake companies, whose intention is to defraud the investors, don’t

have access to the market.

UNDERWRITING

Underwriting is like insurance against the failure of an issue. It is a

guarantee to the issuing the company, that the money that it requires for its

project will definitely be raised. It means that even if the issue is not fully

subscribed to by the public, the underwriters will make up the short fall.

Underwriting involves the underwriter agreeing to subscribe directly, or to

procure subscription for the unsubscribe portion of the issue, which is not

taken up. For the risk that the underwriter takes, he is paid commission.

New companies entering the markets for the first time, always face number

of problems in raising funds from the market. One of the biggest problems of


32Merchant Banking

course that the company is not well known to the investors and many of

them will be unwilling to invest their money in such ventures. Many a times

even existing companies may find it difficult to raise money, due to some

reasons. Issuing companies therefore approach different underwriters with a

request to underwrite the issue.

Underwriters on their part need to satisfy themselves about the viability of

the project and also about the integrity of the promoters of the company. It

must be noted that when an issue is under subscribed, the underwriters will

pick the shares and only if the project is good enough, then in future they can

sell the shares in the market and get not only their money back, but can also

make a decent profit as well.

It is obligatory for the merchant bankers to accept a minimum 5%

underwriting in the issue subject to a ceiling. By taking underwriting in an

issue managed by them, they show their full commitment to the issue that

they are managing.

Dealing in MERGERS AND ACQUISITIONS activity

Mergers and acquisitions (M&A) and corporate restructuring are a big part

of the corporate finance world. Every day, Wall Street investment bankers

arrange M&A transactions, which bring separate companies together to form

larger ones. When they're not creating big companies from smaller ones,

corporate finance deals do the reverse and break up companies through spin-

offs, carve-outs or tracking stocks.


Mergers & Acquisitions is an area where Merchant Bankers act as

intermediaries in negotiating on one with corporate interested in hiving of


33Merchant Banking

divisions/companies which are not with in the purview of the long-term

business strategy of the group/company, and on the other hand for Corporate

interested in non organic growth by acquiring companies/units for reason

strategic or non strategic in nature. Mergers can be beneficial for both the

entities, as due to competition the companies unable to survive or prosper on

their own may like to merge and face competition and achieve growth

targets. Takeovers may be hostile or friendly in nature, hostile takeovers are

without the consent of the company and company being takeover may work

out an anti takeover strategy to counter the threat. Merchant Bankers provide

following services in M&A: -

Identification of potential takeover targets.

Financial & Technical appraisal of the merger/takeover proposal.

Negotiation with the parties for arriving at the suitable price or

exchange ratio.

Assistance in obtaining necessary approval & addressing procedural &

legal issues.

PROJECT COUNSELLING

Project counseling is very important and lucrative merchant banking services

which only very few merchant bankers having advantages of knowledge,

skills and experience over others are able to render satisfactorily. The

corporate seek advice in respect of identification of profitable investment

opportunities in the related business areas (like forward/backward

integration) or as part of diversification process. The merchant bankers carry

out detailed studies on product demand patterns, cost structures, etc., to

enable the corporate in preparation of feasibility study may involve

arrangement of a foreign collaboration, advice on technical parameters and

also legal issues.


34Merchant Banking

Scope of services

Project counseling services are needed by industrial entrepreneurs in India in

the following areas: -

Preparation of project report

Deciding upon the financing pattern to finance the cost of the project.

Aspects of project appraisal with financial institutions/banks.

Project report

Project report consists of technical process, location, management profile,

means of financing, reports on market surveys and market explorations.

Merchant bankers advise the clients on project preparation. Merchant

bankers, on behalf of their clients, engage technical consultants specialized

in the specific area, and marketing experts to prepare technical feasibility

report and market survey reports. Merchant bankers maintain the list of such

experts approves by financial institutions and assign the work to these

experts.

Project report purpose

Project report about the proposed activity is prepared to obtain government

approvals particularly in the following areas:

Grant of industrial license to undertake specified industrial activity.

Foreign investment and technology tie-up.

Grant import license for importing raw material, plant, machinery and

equipments.

Grant of foreign exchange allocation for import of capital goods or raw

materials, etc.


35Merchant Banking

Grant of subsidies and other concessions from the government at center

or state levels or from government sponsored agencies, etc.

LOAN SYNDICATION

It refers to assistance rendered by merchant banks to get mainly term loans

for projects. Such loans may be obtained from a single development finance

institution or a syndicate or consortium as in the case of large term loans.

Merchant banks can also help corporate clients to raise syndicated loans

from commercial banks.

Scope of service

Once the client company has decided about the project proposed to be

undertaken, the next step is looking for the sources wherefrom funds could

be procured to implement the project. The responsibility of locating the

sources of finance, approaching these sources by putting in requisite

prescribed applications and complying with all the formalities involved in

the sanction and disbursal of loan rests with the merchant bankers who

provide the service of loan/credit syndication.

Loan syndication in the case of domestic borrowing is undertaken with the

institutional lenders and the banks. Amongst institutional lenders the

following institutions are the main suppliers of the long and medium term

funds with which the merchant bankers contact, liaison and arrange loans

working for and on behalf of their clients.

1. All India financial institutions

i. Industrial Finance Corporation of India (IFCI)

ii. Industrial Development Bank of India (IDBI)

iii. Industrial Credit & Investment Corporation of India Ltd (ICICI)


36Merchant Banking

2. State level financial bodies

i. State Financial Corporations (SFCs)

ii. State Industrial Development Corporations (SIDCs)

iii. State Industrial & Investment Corporations (SIICs)

3. All India level investment institutions

i. Life Insurance Corporation of India (LIC)

ii. Unit Trust of India (UTI)

iii. General Insurance Corporation of India (GIC) & its subsidiary

companies.

4. Commercial banks: Commercial banks join in consortium loan being

provided by the above institutions.

5. Mutual Funds & Venture Capital Funds: these funds generally invest in

equity but mutual funds contribute to the issues of Debentures/Bonds on

private placement basis as well as subscribe to public issues.

RESTRUCTURING SERVICES

Merchant bankers assist the management of the client company to

successfully restructure various activities, which include mergers and

acquisitions, divestitures, management buyouts, joint venture among others.

To help companies achieve the objectives of these restructuring strategies,

the merchant banker participates in different activities at various stages

which include understanding the objectives behind the strategy (objectives

could be either to obtain financial, marketing, or production benefits), and

help in searching for the right partner in the strategic decision and financial

valuation of the proposal.


37Merchant Banking

CAPITAL ASSISTANCE

In providing financial assistance, merchant banks offer a full understanding

of all facets of the capital markets. This includes all types of debt and equity

financing available from both the domestic and international markets.

It should be understood that interest rates are not the only definition of

capital costs. Restrictions on availability, prepayment terms, and operating

effectiveness can often outweigh what might appear to be inexpensive

capital with low interest rates. Too often, capital includes costs, which force

an entrepreneur or a business to undertake undesirable actions. In the short-

run, some actions might be necessary, but often in the long run are

detrimental. The traditional merchant banker understands these capital

limitations and can structure a transaction, which is beneficial to all sides of

the table -- not just the capital source.

He also knows how to substitute one type of capital for another, sometimes

utilizing internal sources from asset repositioning or cash creation from

improvements in working capital. He understands fully the risk versus return

elements necessary to complete the capital procurement process.

CORPORATE ADVISORY SERVICES

Merchant bankers offer customised solutions to solve the financial problems

of their clients. Advice is sought in areas of financial structuring (as shown

in the Modern Manufacturing case above). Merchant bankers study the

working capital practices that exist within the company and suggest

alternative policies. They also advise the company on rehabilitation and

turnaround strategies, which would help companies to recover from their

current position.


38Merchant Banking

FACTORING SERVICE

Factoring involves the outright sale of account receivable. By such sale a client

(the exporter or manufacturer) transfers his/her ownership of the accounts to a

factor (an organization, firm). The factor buys all the client’s outstanding

invoices and takes over all the subsequent dealings with the

buyer/importer/customer. It is short-term debt financing.

Here three parties are involved-:

1. The factoring organization /firms

2. The manufacturer/exporter/seller

3. The importer/customer/buyer

Role of Merchant Banker in Factoring

The merchant banker may act as factor organization with a view to earning a

great amount of commission. The factor provides the following services:

(a) Financing

(b) Advisory services if necessary

(c) Collection of bills/Account Receivable against sales proceeds.

(d) Maintenance of sales ledger

(e) Provide further if necessary

(f) Covering losses if there are any

ASSET SECURITIZATION


39Merchant Banking

It is a process through which some inactive assets (mortgage assets) are

converted into cash/active assets. It is long-term debt financing. Here assets

are converted into long-term bonds. The whole process is done by the

Special Purpose Vehicle (SPV). In this approach, the merchant banker for

issuance of security bonds against the assets with a matching of time and

terms between mortgage property and security bonds. Here the selection of

asset is generally considered on the basis of the following:

(I) Quality of assets

(ii) Certainty of repayment

(iii) Good ranking from the credit rating agency.

The process of asset securitization takes place in the following firms:

a) Originating Institutions/Firm

b) Special Purpose Vehicle (SPV)

c) Merchant Banker (MB)

FOREX SERVICES

This aspect of banking is becoming increasingly important as the forex flow

in the country is increasing and the international markets are funding the

operations of the corporate in India. The success of any business is measured

by the fund management; this makes treasury management as a very critical

finance function. Management of treasury profit center requires a wide

variety of knowledge in the area of global money markets and financial

instruments such as deposit certificates, treasury bills, forecasting, source

evaluation and cost of domestic and foreign currency funds. Treasury and

risk management ensures cost effectiveness in planning strategies in this era

of deregulation.


40Merchant Banking

Role of merchant banker in Forex function

The currency values, interest rates, share index and commodities affect the

financial derivatives like futures, swaps and other tools of risk management.

Corporates therefore employ well-trained professionals to manage treasury

and forex functions so that they can ensure competent management. Thus,

this service is provided to Corporates through merchant bankers. Merchant

bankers assess various markets to advice Corporates or other banks that

needs currency. Merchant bankers constantly update about the policies of the

regulatory bodies, monitors the current prices, makes predictions based on

the analysis of trends etc.

HIRE PURCHASE SERVICE

It involves a system under which term loans for purchases of goods and

services are advanced to be liquidated in stages through a contractual

obligation. The goods whose purchases are thus financed may be consumer

goods or producer goods or they may be simply services such as air travel.

Hire purchase credit may be provided by the seller himself or by any

financial institution. However, unlike in other countries, the emphasis in

India is on the provision of instalment credit for productive goods and

services rather than for purely consumer goods.


Merchant Banker undertakes the activity of financing for hire-purchase

Activities. The merchant banker looks more to the credit-worthiness and

Business morality of the buyer than the value of security.


41Merchant Banking

LEASE FINANCE COMPANIES

Lease finance companies provide finance to acquire the use of assets for a

stipulated period of time without owning them. The user of the asset is

known as the lessee, and the owner of the asset is known as the Lessor.

Leasing is medium-term arrangement for finance.


Merchant Bankers helps in assessing the credit risk of industrial borrowers.

The merchant bankers provide help in evaluating lease proposals. He

analyse the merits and demerits of lease finance with reference to a given

proposal and leave it to their clients to decide on the appropriate source and

type of finance, thus enlarging their range of choices and the variety of

services available to them.

VENTURE CAPITAL

Venture capital is money provided by professionals who invest alongside

management in young, rapidly growing companies that have the potential to

develop into significant economic contributors. Professionally managed

venture capital firms generally are private partnerships or closely-held

corporations funded by private and public pension funds, endowment funds,

foundations, corporations, wealthy individuals, foreign investors, and the

venture capitalists themselves.


42Merchant Banking


Merchant Bankers assist ventures proposals of technocrats, with high

technology, which are new, and high risk. To seek assistance from venture

capital funds or companies.

They also provide technical, financial & managerial services & help the

company to set up a track record.

The assistance should mainly be for equity support; through loan support to

supplement this may be extended.


43Merchant Banking

Merchant Banking-Future Development

Time and again the Merchant banking Industry in India witnessed experienced

and underwent significant changes. The very purpose for which these firms are

commences their services should be taken care of and they should mould their

policy decision and activities to move in tune with the main objectives of

Investor’s protection and to create healthy environment in capital markets. No

doubt, Merchant Banking firms are subject to a host of control measures,

regulations and rules framed and guided by SEBI. To some extent, frequent

changes and /or amendments to policies and control measures, though needed

for smooth working of the securities Industry, proves to be detrimental to the

very existence of the Merchant Banking system in the country. The SEBI’s Act

1992 confers power upon SEBI to supervise and control the affairs of the

Merchant Banking firms in India.

The various studies which had been undertaken in India for evaluating the

performance of Merchant Banking firms and the implications of these on

securities industry. No single study has been emerged so far pertaining to the

evaluation of Merchant Banking firms and in-depth study on their activities as

well as operational and financial performance in the light of changing

regulatory environment.

In recent past, the small investor has turned his back on the primary capital

market. Issue after issue as failed to capture his imagination, rekindle his

enthusiasm, and reinforce his faith. He has lost all hopes of appreciation of his

investment. And this when all these years millions have though capital market,

ate capital market and dreamt capital market. It needed an extraordinary effort

and skill the drive the small investor away! High premiums, false premiums


44Merchant Banking

and gray market operations. The professed protector of his interests first laid

down the dictum of proportionate allotment, then of minimum subscription, all

working against his interests. This would make an observant student of the

stock market infer that there is some game plan afoot to dethrone the small

investor from his prominent; he was believed to be the king.

With the coming to SEBI, an organization that was ostensibly brought into

existence to guard the interest of the small investor, hopes ran high that the

small investor would now have a safe playing field. But these hopes were soon

belied. Far from guarding the interests of the investing public, SEBI embarked

on a course of action, which has positively hurt them. The latest fiat of EBI bans

corporate advertising after the receipt of acknowledgement card by a company

wanting to go public. SEBI’s this action has caused the closure of an

information window. Now 50 million potential investors are deprived of

official and authentic information given by the Issuer. It is hard to understand

reasons for this drastic and totally uncalled for action. While there has been no

official explanation for this fiat, there is reason to believe that it may be based

on a wrong perception of the role for corporate advertising.

All this has been done perhaps because the corporate and intermediaries is to

follow the practices of Western capital markets here, oblivious of the fact that

our capital markets are altogether different in structure, in systems and in the

number of participants Freedom of commercial expression could be exploited

by some to serve their own ends, just a s freedom of speech and expression

could be abused but this has not led our Government to put arbitrary restrictions

on our freedom.

Merchant Bankers have reason to believe they will be handicapped without the

marketing support. But the worst sufferer would be the investor, especially the

small investor it is this class, which forms the backbone of the capital market.


45Merchant Banking

As a result of the ban, the small investor would be deprived of the opportunity

to study the corporate profile of the Issuer. In the absence of adequate

information, they will have to depend on manipulated facts and information fed

by unreliable sources.

The Indian primary capital market is basically a retail market. It consists of

innumerable investors who take own individual investment decisions.

Whatever, the system, it is this market that will bring in the funds. If these

markets destabilized, the investors will look for alternative avenues to invest

their funds. SEBI in its one of the first documents on “SEBI and Investor

Protection, Development and Regulation of Securities Market” clearly specifies

significance of regulating capital market and its future plans for fulfilling the

twin objectives viz., Development of capital market and investor protection are

explained in introductory paragraphs. It speak out that, “The decade of the

1980 witnessed a phenomenal growth and development of the securities market,

demonstrated its potential not only to mobilize the savings of the household

sector but also to allocate it with some degree of efficiency for industrial

development. The dilution of the holdings of the multinational companies at

affordable prices in the latter part of the 1970s had generated considerable

interest, which was, carries well into the next decade. Several companies’ came

in the early part of the 1980s and successfully raised large resources from the

market especially through debt instruments, which further sustained investor

interest. There were several changes in Government policy, which significantly

influenced industry and aided the market. India was then entering the phase of

liberalization and decontrol which was to accelerate and gather momentum in

the 1980s.

By the end of the decade, the securities market in India came to be firmly

integrated with the financial system of the country. With the corporate sector


46Merchant Banking

increasingly relying on the securities market for meeting their long-term

requirement of funds, the securities market their long-term requirement of

funds; the securities market competed on equal terms with the Development

Financial Institutions, which were the traditional purveyors of long-term capital.

The emergence of the securities markets into the main stream of the financial

system of the country was thus one of the major economic processes of the

1980s – an inevitable outcome of the maturing process of the financial system.

They brought about notable changes in the capital structure of the companies

across industries, gave birth to new intermediaries and institutions in the

securities market and created a new awareness and interest in investment

opportunities in the securities market among investor. In spite market, its

quality lagged far behind and there was absence of adequate professionalism

and fair competition among the various players in the market. Besides, the

regulatory framework then prevailing was fragmented difficult, if not effective.


47Merchant Banking

Merchant banks and commercial banks -:

There are differences in approach, attitude and areas of operations between

Commercial banks and merchant banks. The differences between merchant

Banks and commercial banks are summarized below.

No Commercial banks Merchant banking

1 Commercial banks basically deal in

debt related finance and their

activities are appropriately arrayed

around credit proposals, credit

appraisal and loan sanctions.

The area of activity of merchant

bankers is equity and related finance.’

they deal with mainly funds raised

through money market and capital

market.

2 Commercial banks are asset oriented

and their lending decisions are based

on detailed credit analysis of loan

proposal and the value of security

offered against loans. They generally

avoid risk.

The merchant bankers are management

oriented. They are willing to accept

risks of business.

3 Commercial bankers are merely

financiers.

Merchant bankers include project

counseling, corporate counseling in

areas of capital restructuring

amalgamations, mergers, takeover

etc.discountin and rediscounting of

short-term paper in money markets,

managing underwriting and supporting

public issues in new issue market and


48Merchant Banking

acting as brokers and advisers on

portfolio management in stock

exchange. Merchant banking activities

have impact on growth, stability and

liquidity of money markets.

SURVEY FORM

The word survey means to verify. This is the form issued by me to know the

view of general public in India.

Q.1) Do you know what merchant banking is?


49Merchant Banking

No Yes Can’t say

Q.2) Do you know any of the services rendered by merchant banker?

No Yes Can‘t say

Q.3) Do you know who are the players in merchant banking?

No Yes Can‘t say

Q.4) Merchant Bankers provides services to?

Corporate’s Individual’s

Q.5) who controls the working of merchant banking?

RBI SEBI IRDA

Q.6) SBICAP is related to which of the following bank?

SBI ICICI Can‘t say

Name:

Occupation: Project Guide:

Signature: Place: Mumbai

Survey Report


50Merchant Banking

General Comment/opinion:

The above Pie Diagram depicts the result of a survey which was conducted by

me among 100 people from the age group of 20 to 50 years comprising of

students, business professionals and people from corporate sector.

The diagram is derived from the three question of the survey form:

1. Do you know what merchant banking is?

2. Do you know any of the services rendered by merchant banker?

3. Do you know who the players in merchant banking are?

Thus, the result was clear that most of the people are unaware about the concept

of merchant banking which was not very surprising for me. Statistically 60% of

the people in the overall survey don’t know anything about merchant banking.

Only 30% of the people who know about this concept where the people from

the corporate sector.

Thus I can conclude from my survey that most of the people don’t know

anything about merchant banking and should be made aware of.


51Merchant Banking

Self Evolution


52Merchant Banking

Form the above survey report, my personal view is that in India the people are

not awareing about the merchant banking service. The only 30% of people

know about these services, and that includes the people or person like

companies’ owner, chairperson, director, industrialist etc. But the general public

and small business man or un-educated people are not awaring about this

service.

From the above survey report, I come to know the two things which affecting to

India to become a developed country they are as follow-:

Education

Awareness

From the above my personal view is that the banks should improve their

marketing skills for the merchant banking services. So general public also

can use this service and enjoy their life.

Suggestion On The Project


53Merchant Banking

From the above project my personal suggestion are as follows-:

The bank should improve their marketing skills.

They have to attract their regular customers by providing these services.

They have to launch new products & schemes to attract the customer.

The bank should provide good facilities to their employees & fulfill their

needs.

The banks have improved their network connection with customers by

providing different-different services.

The banks have to improve their network connection not only in india but

also with outsider countries in the world.

The banks have to provide better NRI’s services to NRI’s people.

Visit to Bank

Bank visited: ICICI Bank Limited


54Merchant Banking

Date- 27 th Aug,2009

Person Interviewed: Anand.Gunediwal

(Branch Manager)

Bhayandar (w)

Question asked:

1. What is merchant banking?

Ans. Merchant banking is a part of banking services provided to

corporate sector.

2. What is the need for merchant banking in India?

Ans. Business world in India is growing day-by-day .So merchant banking

services are highly required by them.

3. What is the importance of merchant banking?

Ans. People enjoy those services which are not provided to them by

commercial banks.

4. Do SBI undertake merchant banking services?

Ans. SBI is the first bank to take up merchant banking services in 1986.SBI

has won the “Best Merchant Banker Award 2004”by outlook money.

5. What Which activities does your bank undertakes?

Ans. Loans, deposits, credit-debit card, ATM’s etc.

6. What are the services provided? And why your service is better than the

other banks?

Ans. Our service is best because our bank is providing 24 hours services and

we have better network connection according to areas in all over world.

CONCLUSION


55Merchant Banking

The merchant banker plays a vital role in channelizing the financial surplus of

the society into productive investment avenues. Hence before selecting a

merchant banker, one must decide what the services for which he is being

approached are. Selecting the right intermediary who has the necessary skills to

meet the requirements of the client will ensure success.

It can be said that this project helped me to understand every details about

Merchant Banking and in future how it’s going to get emerged in the Indian

economy. Hence, Merchant Banking can be considered as essential financial

body in Indian financial system.

Market development is predicated on a sound, fair and transparent

regulatory framework. To sustain the growth of the market and crystallize the

growing awareness and interest into a committed, discerning and growing

awareness and interest into an essential to remove the trading malpractice and

structural inadequacies prevailing in the market, and provide the investors an

organized, well regulated market place in future.


56Merchant Banking

Bibliography

Books:

Manual of Merchant Banking – J. C. Verma (3rd & 4th Edition)

Merchant Banking Principles & Practices- H.R.MACHIRAJU

SEBI Manual for Merchant Bankers

Websites:

www.google.com

http://en.wikipedia.org/wiki/Merchant_bank

www.economictimes.com

www.sbicaps.com


http://www.economictimes.com/

http://www.google.com/

chandni final project (autosaved)41

Documents

merchant banking activity

merchant banker

mumbai university

college principal

nishikant jha

insurance curriculum

student of t

guidance of