Corporate Advisory Services -a New Business Environment In The Making

Corporate advisory services are needed to ensure that a corporate enterprise runs

efficiently at its maximum potential through effective management of financial and other resources. It also rejuvenates old-line companies and ailing units and guides existing units in locating areas/activities of growth and diversification. Usually, Merchant Bankers provide these services. The corporate advisory services represent an important component of the portfolio of the activities of merchant bankers. Corporate advisory services, for a business enterprise, include the following services:

Provide guidance in areas of diversification based on the Governments economic and licensing policies.

Appraising product lines and analyzing their growth and profitability.

Forecasting future trends, and rejuvenating old line companies and ailing sick units by appraising their technology and processes and restructuring their capital base.

The move to help the ailing industrial units is a well thought out service by the merchant bankers which remained unattended for years. Now the merchant banks in India have recognized this gap and started helping ailing companies to overcome their problems. For example Punjab National Bank has developed special expertise in the area and contemplates to offer help in this sensitive area in one or more of the following ways, viz. (i) commissioning of diagnostic studies, (ii) assessment of revival prospects and preparation of rehabilitation plans, schemes of modernization and diversification, revamping of the financial and organizational structure, (iii) arranging approval of the financial institutions/banks for schemes of rehabilitation involving financial relief etc. assistance in getting soft loans from the financial institutions for capital expenditure and the requisite credit facilities from the bank, (iv) monitoring of rehabilitation schemes, and (v) exploring possibilities of takeover of sick units and assistance in making consequential arrangement and negotiations with financial institutions/banks and other interests/authorities involved. The corporate advisory services as explained do not cover all the services rendered by merchant banks to the corporate world. In fact there cannot be a finite list of these services. As new problems come up there would be a need for a new kind of corporate advice, which would solve those problems. Some merchant banks would take up the challenge and gear up their activities for providing the needed corporate advice. This leads to the emergence of new corporate advisory services. Therefore it can be rightly said about merchant banks, merchant banks are the institutions which identify and solve corporate problems. In addition to the corporate advisory services explained above the merchant banks may also provide the following services to the corporate world:

a) Help in Management Decisions.

b) Export Staff Placement and HRD Help.

c) Financial Reengineering.

d) Entrepreneurial Training and Development.

e) Technical Assistance

f) Quality Control & Product Mix.

g) Market Survey and Research.

h) Tax Planning.

by: Jennie Kakkad

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