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21-Jun-2024 13:24

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Merchant Banker - Roles and Responsibilities

Merchant Bankers play a very important role in the IPO process of EMERGE and also have a role in Post listing phase. Their responsibilities are higher on the EMERGE platform as in addition to the conventional role of managing and underwriting the IPO, they are also responsible for ensuring market making for a period of three years from the IPO.

  • Educating the applicant company

To inform and educate the applicant about capital market rules & regulations, the IPO process and post listing requirements.

  • Due diligence & DRHP Preparation

The merchant banker would be closely associated in preparing the new applicant's prospectus and other related listing documents. The Merchant Banker shall conduct a due diligence on the applicant and provide due diligence certificate as per Form A of Schedule VI of the ICDR including additional confirmations as provided in Form H of Schedule VI along with the offer document to the exchange. The other certifications as mentioned in ICDR, Schedule VI will be provided, if applicable.

  • Display of offer document on website.

The merchant banker shall display the offer document on its website after the final approval is obtained and the RHP is filed with RoC and SEBI.

  • Market Making arrangement

The Merchant banker shall ensure compulsory market making through the stock brokers of SME exchange in the manner specified by the Board in chapter XB, for a minimum period of three years from the date of listing of specified securities on SME exchange.

  • Underwriting arrangement

The merchant banker shall ensure that the issue is 100% underwritten and 15% of the underwriting should be by the merchant banker in own books.

  • Arrangement with nominated investors

In terms of provisions of Chapert XB of the ICDR, merchant bankers could enter into arrangements with nominated investors (PE funds & QIBs as defined therein) for facilitating market making and underwriting. The merchant banker shall disclose their arrangements with Nominated investors to the exchange in the Final Offer document.

Updated on: 03/01/2023