| SELECTING A PUBLIC ISSUE PROPOSAL
Before selecting a Public Issue proposal, the Merchant banker has to keep in mind the following aspects:
Background of the Promoters/Management: Success of a company is very much dependent on the background of the promoters and the management viz., their education, business/technical expertise, financial strength capability and reputation, etc. If a new company is launched from the platform of an already existing group, having successful track record, it is well received in the market. Performance of the group/associate concerns or the holding company, against the promises made by them at the time of their public issues is also looked into seriously by the prospective investors. If the group/associate concerns are financially strong enough, they can also lend support to the public offering. Another important aspect, which should be considered by the Merchant banker before picking a Public Issue proposal is to see whether there is any pending litigation, defaults and disputes of the promoters for the company with any person, bank or institution.
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