720 Merchant Bankers Didnt Get Assignments In 96-97

The declining number of public issues in recent times has hit merchant bankers the hardest. As many as 720 of the total 1,162 merchant bankers in all categories had no assignments to handle during 1996-97. The 442 active merchant bankers included six financial institutions, 15 state corporations, 19 nationalised banks, six bank subsidiaries, 18 private sector banks, three foreign banks and 372 private merchant bankers, according to Prime Data Base.

About 58 merchant bankers who had lead managed public issues in 1995-96, did not handle any assignment in the previous financial year, says Prime's managing director, Prithvi Haldea.

Banks which did not lead manage in 1996-97 include Citibank, American Express, Credit Lyonnaise, Standard Chartered, State Bank of Mysore, Syndicate Bank, State Bank of Patiala and Uco Bank.

 

The average number of assignments handled by a merchant banker fell to 3.2 per cent from 5.5 per cent in 1995-96, Haldea said. He added that nearly 60 per cent of the total market mobilisation at Rs 11648 crore in 1996-97 was through mega debt issues, which were cornered by 10 merchant bankers.

In 1992-93, only 67 merchant bankers had handled the 528 public issue assignments. In the next fiscal there were 108 bankers handling 770 issues and the figure went up to 188 in 1994-95 for a whopping 1373 issues. The number shot to an all-time high of 261 in 1995-96 when 1428 issues were floated, he said adding in the last fiscal only 234 merchant bankers were active for the 753 issues that came up. Significantly, SBI Capital Markets maintained its top spot in lead management of public issues with mobilisation of Rs 7773 crore.

However, in terms of number of assignments, SBI Cap was placed third behind Prudential Capital Markets and DB Merchant with the latter improving from 12th position to second. As far as lead management of debt issues is concerned, Kotak led the table both in number of issues as well as amount mobilised, the data revealed.

Among the private merchant banks that did not do any business include Ashok Leyland, Nicco Uco, Parag Parikh, Weizmann, Western Indian, Videocon Leasing, Cholamandalam and Kirloskar.