DFIN403 MERCHANT BANKING & FINANCIAL SERVICES

Description

SESSION	JAN-FEB 2026
PROGRAM	MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER	IV
COURSE CODE & NAME	DFIN403 MERCHANT BANKING AND FINANCIAL SERVICES

 

 

Assignment Set – 1

 

 

Q.1. What do you mean by merchant banking? How merchant banks are different than commercial banks.

Ans 1.

Meaning of Merchant Banking

Merchant banking is an specialized type of banking that focuses on the financial needs of businesses as well as corporations. Merchant banks provide services like underwriting of securities, project finance, the management of portfolios, loan syndication and also advising on mergers or acquisitions. In India the activities of merchant banks are overseen by SEBI as per SEBI’s SEBI (Merchant Bankers) Regulations of 1992.

The notion was born in Europe in the

 

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Q.2. Explain the various functions and steps involved in issue management.

Ans 2.

Functions in Issue Management

Issue management is the procedure that a business uses to raise capital through the issue of securities to public or institutional investors. An SEBI-registered merchant banker who is the lead manager supervises all the activities during this procedure.

First, there is the an initial planning. The banker’s merchant analyst evaluates the financial health of the business as well as advises the kind and the size of the issue and suggests the best timing in light of the current market situations.

A second task is to prepare of the document for an offer. The merchant banker drafts documents such as Draft Red Herring Prospectus (DRHP) that contains all details about the business of the firm and financials, as well

 

 

Q.3. What is a mutual fund? Analyze the various factors to be considered when selecting a mutual fund.

Ans 3.

Meaning of Mutual Fund

A mutual fund is an expertly run investment vehicle that pool the funds of many investors and puts it in the form of a diverse portfolio of investments like bond shares, equity securities, Treasury securities, and financial instruments. The investors hold units, which are worth a certain amount depending on how the investment performs. investment.

In India Mutual funds are controlled by SEBI in accordance with the SEBI (Mutual funds) Regulations, 1996, and are structured as trusts managed through Asset Management Companies (AMCs). Investors gain from professional administration,

 

 

Assignment Set – 2

 

 

Q.4. Define credit rating? Discuss the advantages and limitations of a credit rating to the company.

Ans 4.

Definition of Credit Rating

Credit rating is a formal assessment of the creditworthiness of an individual or credit instrument. It is expressed in an a-grade by an established credit rating agency. The score indicates that the company’s capability and ability to pay back financial obligations on time. In India the major agencies are CRISIL, ICRA, CARE Ratings and India Ratings. They examine the creditworthiness of

 

 

 

Q.5. Explain the concept of mergers and acquisitions (M&A) and discuss the primary motivations behind companies pursuing mergers or acquisitions.

Ans 5.

Concept of Mergers and Acquisitions

M&A, often called M&A is a type of transaction in which the control and ownership of companies is transferred or the control of companies is transferred or. A merger occurs when two companies agree to combine to create a new entity. Acquisition occurs when one business purchases another, and assumes full control over the assets, liabilities as well as its ongoing business.

M&A can be classified as horizontal, which involves businesses in the same field; vertical,

 

Q.6. Write a note on Leasing.

Ans 6.

Concept of Leasing

The term “leasing” refers to a financial arrangement that lets the owner of an asset, referred to as the lender, lets an additional party, referred to as the lessee, to use it for a set period in exchange for regular payment, which is known as lease rentals. The lessee uses the asset but does not purchase it. After the period the asset will be returned to the Lessee, or the latter might purchase it at a residual value. The