Definition
Merchant Banker / BRLM
A merchant banker, acting as Book Running Lead Manager (BRLM), is the SEBI-registered intermediary that manages an IPO from filing to listing.
The BRLMs draft the DRHP and RHP, conduct due diligence, market the issue to investors (the roadshow), build the book, advise on pricing and coordinate the anchor allocation. Large IPOs use several BRLMs together. They are paid a fee, often a percentage of the issue size.
SEBI holds merchant bankers accountable for the accuracy of disclosures in the offer document. Their reputation and track record influence investor confidence, and they sign a due-diligence certificate filed with the regulator.
Related terms
- Registrar to an IssueThe registrar is the SEBI-registered intermediary that processes IPO applications, finalises the basis of allotment and handles refunds and share credits.
- UnderwritingUnderwriting is the process by which an insurer evaluates a risk, decides whether to accept it, and on what terms and premium.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.