What is Corporate Advisory Services? Explain the main Corporate Advisory Services?
The corporate advisory services are spread over a vast spectrum of corporate activity. Some of them are very well suited for investment banks, with the rest finding place with specialist advisory firms. The essence of corporate advisory services for investment banking relates to Business advisory, Restructuring advisory, Project advisory and Merger & Acquisition advisory. Corporate Advisory Services is an umbrella term that encompasses specialized advice’s rendered to corporate houses by professional advisers such as accountants, investment banks, law practitioners and host of similar service providers.
List of Main Corporate Advisory Services:
Making of public issue and issue management:
The services in this regard includes obtaining approval for the issue from the SEBI, arranging underwriting for the proposed issue, drafting and finalizing the prospectus and other related documents, selecting the registrar, arranging for press, broker’s and conferences and coordinating for printing, publicity and advertisements.
Project counseling and pinvestment studies:
The service refers to project finance and covers the study of the project and offering advisory assistance on the project viability and procedural steps for implementation.
This includes restructuring business portfolio, financial restructuring, organizational restructuring, portfolio optimization, business retention criteria, divestment strategies, diversification choice, financial engineering, shareholders value creation, debt equity mix, cost management and organizational design.
Capital structuring and restructuring:
This includes decision on appropriate debt equity ratio and minimizing cost of capital.
This service involves making arrangement for financing a large borrower by a number of financial institutions.
Liaison with foreign collaborators and making preparation for joint ventures:
This service requires advice on local laws, product risk, government regulations and guidance on negotiating foreign financial and technical collaboration agreements.
Raising foreign currency loans Euro issues, FCCB’s, etc:
The merchant banking departments of many foreign banks are rendering services in respect of foreign currency loans and merchant banks have an expertise in arranging Euro currency loans to Indian corporate units.
Mergers and acquisitions:
The steps involved in mergers are Formulation of scheme, Memorandum of association, Intimation to stock exchange and notification, Director’s approval of the proposed scheme, Shareholders approval, Application to the court, Meeting ordered by the court, Petition for confirmation of Amalgamation, Order of the court, Transfer of Assets and liabilities, issue of shares, etc.
Making valuation and valuation of assets:
This includes the factors like book value, appraisal value, market value and earnings per share.
Consultancy for rehabilitation of sick industrial units:
This service is to help and guide the sick industrial units.
Other corporate advisory services:
This includes corporate services and advice’s required to solve the problems.