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CS Executive · Capital Market and Securities Laws · Basics of Capital Market

Kiran Industries plans a public issue of equity shares. It needs an SEBI-registered intermediary to manage the issue, handle due diligence, prepare the offer document and coordinate marketing and allotment with other agencies. Which intermediary should it primarily appoint?

Kiran Industries should appoint a merchant banker as lead manager. Merchant bankers are SEBI-registered intermediaries who manage public issues, conduct due diligence, prepare offer documents and coordinate other agencies. Depository participants, portfolio managers and investment advisers perform different roles unrelated to managing an issue.

  1. AMerchant banker (lead manager)Correct
  2. BDepository participant
  3. CPortfolio manager
  4. DInvestment adviser

Explanation

A merchant banker acting as lead manager manages public issues, carries out due diligence and coordinates the offer process. A depository participant only holds securities in dematerialised form for investors. A portfolio manager manages client portfolios and an investment adviser gives advice; neither manages issues.

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