This article throws light upon the top five underwriting agencies in India. The agencies are: 1. Brokers 2. Private Investment and Insurance Companies 3. Commercial Banks 4. Development Banks and Other Financial Institutions 5. Consortium Underwriting.

Agency # 1. Brokers:

The private firms of stock brokers have been underwriting issues from very early times. But their participation has been on ad-hoc basis as they have refrained themselves from underwriting activities at times. Their primary emphasis is on market potentiality of issues rather than the viability of the issues. The brokers primarily help in placement of issues and seldom perform the real job of underwriting.

They usually do not assume risk or guarantee the buying of issue in case of non-subscription. Further, the private brokers are interested only in short-term gains and are not interested to retain securities for a long-period. Even in cases, where they have to buy shares or debentures because of their underwriting obligations, they sell the same to promoters or others at the earliest opportunity.

Agency # 2. Private Investment and Insurance Companies:

There are many private investment companies, trust and insurance companies which also provide underwriting service in India. In the late thirties managing agents organised a number of companies and trusts like Industrial Investment Trust of Bombay and Birds Investment Ltd. Calcutta to underwrite mainly the issues of the companies managed by their managing agents.


As managing agency system was abolished in India in 1970, these companies and trusts are working as underwriters since then. The nature of underwriting services undertaken by private investment companies is very similar to that of brokers and they are the major sub-underwriters in the market.

Agency # 3. Commercial Banks:

Since 1955, commercial banks have also played an important role in the field of underwriting. But compared to their resources, their participation in underwriting business has not been substantial. Commercial banks are also, usually, not interested in holding for a long-period the underwritten shares or debentures.

Agency # 4. Development Banks and Other Financial Institutions:

Since 1995, development banks and a number of other lending direct financial institutions have emerged as a major group of underwriters. In addition to the direct finance to companies, they underwrite capital issues.

The nature and purpose of underwriting of capital issues by these institutions is quite different from other underwriters. Their emphasis is mainly on long term viability of the issuing company rather than marketability of securities. These institutions help the enterprises by holding the underwritten shares or debentures not taken up by public for a long period.

Agency # 5. Consortium Underwriting:


In the recent years, various financial institutions and banks have started underwriting of capital issues through consultations and collaborations of each other. Although there is no formal syndicate or consortium as such, yet it has become a very important from of underwriting of capital issues.