The regulator has now proposed to have two categories of investment banks based on their net worth.
Those with at least Rs 50 crore net worth will fall under Category 1 and will be allowed to undertake all activities that fall under Sebi’s ambit.
Meanwhile, those with net worth of at least Rs 10 crore will fall under the Category 2 not be allowed to handle main board issues.
Further, the regulator has proposed that merchant banks maintain a fourth of their net worth in “liquid” assets — those that can be easily converted into cash.
At present, there are over 200 registered merchant bankers in the country, which help companies launch an initial public offering (IPO) or a listed entity raise additional funds via qualified institutional placements or offer for sale.
Corporate Capital Ventures, a leading merchant banker, recently faced a raid resulting in temporary account freezes and a brief stock dip. Despite this, the associated companies are performing well and are expected to recover swiftly
