Company Profile: Merchant Banker also has to look at the track record of the company and the quality of its management, industry in which it operates, product mix of the Company and business prospects of the product proposed to manufacture. He also needs to decide the profitability of the product and sustain ability of the project. Financial health also has to be gauged by probing the existing capital structure, debt equity ratio, level of gearing, nature and extent of various resources/provisions etc.
Project Profile: It is also considered whether the project is appraised by a Financial Institution, whether there is participation of Institutions in the financing of project, if any, and the level of financial participation of the Institution. Appraisal and funding of project by an Institution also certifies the viability of the project to an extent.
Capital Market Position: If the group/associate concerns are already listed on stock exchanges, the pattern of their share price movement should be analysed. Trading behaviour of shares of leading companies in the similar field should be compared with the share quotations of the group concern companies to see the stability in share quotations.
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