Merchant Bankers play a crucial role in Indiaís financial ecosystem by providing advisory, underwriting, and capital-raising services to companies. Registered with the Securities and Exchange Board of India (SEBI), they help businesses access funds through equity and debt markets while ensuring compliance with regulatory standards. Their primary function is to manage the process of public issues such as Initial Public Offerings (IPOs), Rights Issues, and Qualified Institutional Placements (QIPs).

Unlike commercial banks that focus on lending and deposits, Merchant Bankers specialize in financial consultancy and corporate finance. They assist companies in preparing offer documents, obtaining necessary approvals, pricing securities, and marketing the issue to investors. By coordinating with regulators, stock exchanges, and other intermediaries, they ensure a transparent and efficient fundraising process. Leading categories of merchant bankers include those who can manage public issues, provide portfolio management, or offer advisory services on mergers and acquisitions (M&A).

To operate legally, merchant bankers must be registered under SEBI (Merchant Bankers) Regulations, 1992. SEBI classifies them into four categories based on the range of services and responsibilities they can undertake. Category I merchant bankers have the highest authority and can manage public issues, whereas lower categories have limited functions such as advisory roles.

For investors and corporates alike, merchant bankers serve as trusted intermediaries who bridge the gap between companies seeking capital and investors looking for opportunities. Their expertise in valuation, due diligence, and regulatory compliance adds credibility to market transactions and enhances investor protection. In essence, Merchant Bankers strengthen Indiaís capital markets by ensuring fair practices, transparency, and efficient capital formation.