NISM Series IX Merchant Banking: Complete Syllabus, Exam Pattern & Eligibility (2025–2026 Guide)
If you're planning to appear for the NISM Series IX – Merchant Banking Certification Examination, this guide gives you everything you need to know — syllabus, exam pattern, eligibility, fees, passing marks, and the best preparation strategy. This is the official gateway to becoming a SEBI-certified merchant banker in India.
Start Preparing Now: Free NISM Series IX Mock Test | Chapter 1 Notes – Capital Markets What is the NISM Series IX Merchant Banking Exam?
NISM (National Institute of Securities Markets) Series IX is the certification examination for professionals involved in merchant banking activities in India. This exam is mandated by SEBI (Securities and Exchange Board of India) for individuals associated with SEBI-registered merchant bankers who are involved in issue management activities.
Passing this exam and obtaining the NISM Series IX certificate is a regulatory requirement — not just a career qualification. Without a valid NISM Series IX certificate, merchant bankers cannot discharge their regulatory responsibilities.
Why is NISM Series IX Important?
- Mandatory for SEBI-registered merchant bankers and their associated persons
- Demonstrates expertise in capital markets, IPO process, and securities regulations
- Required for career growth in investment banking, merchant banking, and capital markets
- Valuable for finance professionals aspiring to roles in issue management, M&A advisory, and SEBI compliance
NISM Series IX Exam Overview
| Parameter | Details |
|---|---|
| Examination Name | NISM Series IX: Merchant Banking Certification Examination |
| Conducting Body | NISM (National Institute of Securities Markets) |
| Mandated By | SEBI (Securities and Exchange Board of India) |
| Mode of Exam | Online (Computer-Based Test) |
| Total Marks | 100 |
| Number of Questions | 100 MCQs |
| Duration | 2 hours (120 minutes) |
| Passing Marks | 60 out of 100 (60%) |
| Negative Marking | 25% of marks for each wrong answer |
| Certificate Validity | 3 years from the date of passing |
| Exam Language | English |
NISM Series IX Exam Fees
| Fee Type | Amount |
|---|---|
| Examination Fee | ₹1,500 + GST |
| Re-attempt Fee (if failed) | ₹1,500 + GST per attempt |
The examination fees are non-refundable. You can pay online at the time of registration on the NISM website.
Eligibility for NISM Series IX Exam
There is no formal educational eligibility criterion for appearing in the NISM Series IX examination. Any individual can register and appear for the exam. However, it is specifically mandatory for:
- Associated persons of SEBI-registered merchant bankers
- Individuals involved in issue management activities
- Personnel who handle DRHP preparation, due diligence, and related compliance activities
NISM Series IX Complete Syllabus
The NISM Series IX syllabus is divided into 8 chapters:
Chapter 1: Introduction to Capital Markets
- Primary Market, Secondary Market, Money Market
- Equity, Debt, and Derivative Market Products
- Participants and Regulators in Indian Securities Market
- Role of Investment Banker in Private Equity
Chapter 2: Introduction to Merchant Banking
- Concept and Evolution of Merchant Banking (India and International)
- Regulatory Framework: Core Regulations and Support Regulations
- Key Acts: SEBI Act, SCRA, ICDR, LODR, SAST, Insider Trading, FEMA, PMLA, Companies Act
Chapter 3: Registration, Code of Conduct & General Obligations
- Activities covered under Merchant Banking
- Categories of Merchant Bankers
- Eligibility, Registration Fees, Renewal
- Code of Conduct and General Obligations
- Investor Grievance Redressal and SCORES
Chapter 4: Issue Management – Important Terms
- IPO, FPO, Rights Issue, QIP, Preferential Issue, OFS
- Book Building, Fixed Price, Differential Pricing
- ASBA, UPI, Green Shoe Option
- Investor Categories: RII, QIB, NII, Anchor Investor
Chapter 5: Issue Management – Process and Underwriting
- IPO Eligibility and Mandatory Conditions
- Appointment of Intermediaries
- Due Diligence and Offer Document Preparation
- Filing, Public Availability, Security Deposit
- Opening, Closing, and Listing of Issue
- Pricing, Underwriting, Allotment, Post-Issue Compliance
Chapter 6: Issue Management – General Obligations and Due Diligence
- Prohibition of Incentives, Research Reports, Publicly Available Documents
- Promoters' Contribution and Lock-in
- Preferential Issue, QIP, Rights Issue provisions
- Indian Depository Receipts (IDRs)
Chapter 7: Mergers, Acquisitions & Takeovers
- Definitions: Merger, Acquisition, Consolidation, Takeover
- SEBI SAST Regulations, 2011 – Open Offer Triggers, Size, Price, Process
- Exemptions and Conditional Offers
Chapter 8: Disinvestment, Buyback & Other Activities
- Disinvestment of Government PSUs
- Buy-Back of Securities (SEBI Regulations 2018)
- Delisting, Debt Securities, SME IPOs
- Share-Based Employee Benefits
- Alternative Investment Funds (AIFs)
Chapter-Wise Weightage (Approximate)
| Chapter | Topic | Approximate Weightage |
|---|---|---|
| 1 | Capital Markets Introduction | 8–10% |
| 2 | Merchant Banking Introduction + Regulations | 12–15% |
| 3 | Registration, Code of Conduct | 8–10% |
| 4 | Issue Management Terms | 10–12% |
| 5 | Issue Management Process + Underwriting | 20–25% |
| 6 | General Obligations + QIP/Rights/IDR | 15–18% |
| 7 | Mergers, Acquisitions, Takeovers | 8–10% |
| 8 | Disinvestment, Buyback & Others | 8–10% |
Focus Areas: Chapters 5, 6, and 2 carry the highest weightage. Prioritise these chapters in your preparation.
How to Register for NISM Series IX Exam
- Visit the official NISM website: certifications.nism.ac.in
- Click on "New Candidate Registration" and create your login
- Log in and select "NISM Series IX: Merchant Banking Certification Examination"
- Choose your preferred test centre and date
- Pay the examination fee online
- Download your admit card from your login dashboard before the exam date
How to Prepare for NISM Series IX Exam Step 1: Read the Official NISM Workbook
The NISM Series IX workbook is the primary study material. It covers all topics in depth. Always read the official workbook — short notes alone are not sufficient for a complete understanding.
Step 2: Use Chapter-Wise Short Notes
After reading the workbook, use structured short notes like this series to consolidate and revise key points. Focus on definitions, numbers, and regulatory provisions.
Step 3: Practice Mock Tests
Mock tests are the most effective way to prepare for the NISM Series IX exam. They help you:
- Identify weak areas
- Get comfortable with MCQ format
- Improve time management
- Understand how questions are framed
Step 4: Focus on Key Numbers and Definitions
The NISM Series IX exam heavily tests specific numbers (fees, timelines, percentages) and precise regulatory definitions. Create a revision list of all critical numbers.
Step 5: Revise Regulations
Be clear on which regulation governs which activity. Questions often test whether you know the correct regulation number, year, and scope.
NISM Series IX Certificate Renewal
The NISM Series IX certificate is valid for 3 years from the date of passing the exam. To renew the certificate, you must either:
- Appear for and pass the examination again, or
- Earn the required Continuing Professional Education (CPE) credits
Candidates who let their certificates lapse must re-appear for the full examination.
Start Your Preparation Today! Browse our complete NISM Series IX Short Notes Series covering all 8 chapters. Test your knowledge with our Free NISM Merchant Banking Mock Test. Thousands of students have cleared their NISM exams with PassNISM — be next! NISM Series IX Merchant Banking: Master Revision Sheet – All Key Numbers, Timelines & Definitions
This master revision sheet consolidates all the critical numbers, timelines, percentages, and definitions from the entire NISM Series IX Merchant Banking syllabus. Use this for last-minute revision before your exam. Every number listed here has appeared in past NISM Series IX examinations.
Also Read: NISM Series IX Syllabus & Exam Pattern | Free Mock Test Section 1: Merchant Banker Registration Numbers
| Requirement | Key Number |
|---|---|
| Minimum Net Worth (Capital Adequacy) | ₹5 crore |
| Registration Fee (one-time) | ₹20 lakh |
| Renewal Fee (from year 6 onwards) | ₹9 lakh every 3 years |
| Time to pay fees after intimation | 15 days |
| Investor complaint resolution period | 21 days |
| Record maintenance period | Minimum 5 years |
| Reporting of securities acquired | Within 15 days (or quarterly for underwriting) |
| Total underwriting commitment limit | 20 times net worth |
| SEBI established on | April 12, 1992 |
| PMLA effective from | July 1, 2005 |
Section 2: IPO/FPO Eligibility Numbers
| Requirement | Key Number |
|---|---|
| Minimum net tangible assets (last 3 years) | ₹3 crore per year |
| Average operating profit (3 years) | ₹15 crore |
| Minimum net worth (last 3 years) | ₹1 crore per year |
| Revenue from renamed business (if name changed) | At least 50% |
| Funds arranged for project (excl. IPO proceeds) | 75% through verifiable means |
| Max funds for general corporate purposes + unidentified acquisitions | 35% of issue proceeds |
| OFS: Shareholding > 20% can offer | Up to 50% of their holding |
| OFS: Shareholding < 20% can offer | Up to 10% of their holding |
| Minimum shares held before OFS (lock-in) | At least 1 year |
Section 3: Issue Process Timelines
| Event/Requirement | Timeline |
|---|---|
| Issue must open after SEBI observations | Within 12 months |
| SEBI observations period | 30 days from trigger date |
| RHP/Prospectus filing before opening | At least 3 working days |
| Minimum IPO open period | 3 working days |
| Maximum IPO open period | 10 working days |
| Extension if price band revised | At least 3 additional working days |
| Extension in force majeure/banking strike | Minimum 1 working day |
| Listing after issue close | T+3 days |
| DRHP public comment period | At least 21 days |
| Public notice after DRHP filing | Within 2 days |
| Security deposit by issuer | 1% of issue size |
| Minimum allottees in public issue | 1,000 |
| Oversubscription additional allotment | Up to 1% of net offer |
| Retail investor allotment cap | ₹2 lakh |
| Eligible employee allotment cap | ₹5 lakh |
| Interest on delayed allotment/refund | 15% per annum |
| Refund if listing rejected | Within 4 days |
| Underwriter must subscribe if called upon | Within 45 days of notification |
| Devolvement notice to underwriter | Within 10 days |
| Post-issue advertisement | Within 10 days of completion |
| Final post-issue report submission | Within 7 days of allotment or refund |
| Listing confirmation to bankers (Reg 53) | Before releasing funds to issuer |
| Financial info max age in offer document | 6 months from issue opening |
Section 4: Investor Allocation Percentages
| Category | Book Built – Reg 6(1) | Book Built – Reg 6(2) | Fixed Price |
|---|---|---|---|
| Retail Individual Investors (RIIs) | At least 35% | Up to 10% | At least 50% |
| Non-Institutional Investors (NIIs) | At least 15% | Up to 15% | Remaining |
| QIBs (total) | Not more than 50% | At least 75% | Remaining |
| Mutual Funds (within QIB) | 5% of QIB portion | 5% of QIB portion | – |
| Anchor Investors (within QIB) | Up to 60% of QIB portion | Up to 60% of QIB portion | – |
| NII Sub-category (₹2–10 lakh) | 1/3 of NII portion | 1/3 of NII portion | – |
| NII Sub-category (> ₹10 lakh) | 2/3 of NII portion | 2/3 of NII portion | – |
Section 5: QIP Key Numbers
| Provision | Key Number |
|---|---|
| QIP special resolution validity | 365 days |
| Minimum listing period for QIP eligibility | 1 year |
| Gap between two QIPs | Minimum 2 weeks |
| Monitoring agency trigger (issue size) | Exceeds ₹100 crore |
| QIP pricing: weeks of VWAP reference | 2 weeks before relevant date |
| Max discount on QIP price | 5% (with shareholder approval) |
| Minimum allottees (issue ≤ ₹250 crore) | 2 allottees |
| Minimum allottees (issue > ₹250 crore) | 5 allottees |
| Max single allottee share in QIP | 50% of issue |
| Max tenure of QIP convertible securities | 60 months |
| Lock-in for QIP convertibles (no exchange sale) | 1 year from allotment |
Section 6: Takeover Code (SEBI SAST) Key Numbers
| Provision | Key Number |
|---|---|
| Mandatory open offer trigger | Acquiring 25% or more voting rights |
| Minimum open offer size | 26% of total shares |
| Frequently traded shares threshold | 10% of total shares traded in 12 months |
| Tendering period duration | 10 working days |
| Tendering period opens after SEBI comments | Within 12 working days |
| Payment deadline post-closure | Within 10 working days |
| Post-offer advertisement deadline | Within 5 working days |
| Report within offer period for acquisitions | Within 24 hours |
| No trades (blackout before tendering) | Last 3 working days |
| Price adjustment period after offer (higher price paid) | Within 26 weeks |
| Dispatch of letter of offer to shareholders | Within 7 working days of SEBI comments |
Section 7: Preferential Issue and Lock-in Numbers
| Provision | Key Number |
|---|---|
| Allotment deadline after special resolution | 15 days |
| Pricing: VWAP reference period (shorter) | 10 trading days |
| Pricing: VWAP reference period (longer) | 90 trading days |
| Promoter lock-in (up to 20% of capital) | 18 months |
| Promoter lock-in (balance) | 6 months |
| Non-promoter lock-in | 6 months (1 year for unlisted convertibles) |
| Pre-allotment holding lock-in | 90 trading days |
Section 8: SME IPO and Buy-Back Numbers
| Provision | Key Number |
|---|---|
| SME IPO underwriting requirement | 100% underwritten |
| Lead manager minimum underwriting (SME) | 15% of issue |
| Market making period (SME) | At least 3 years from listing |
| Market maker inventory on allotment (SME) | 5% |
| Maximum buy-back limit | 25% of paid-up capital + free reserves |
| Buy-back final report to SEBI | Within 15 working days of period end |
| Debt issue minimum subscription | 75% of base issue size |
| Minimum public debt issue size | ₹100 crore |
Section 9: Important Regulatory Dates to Remember
| Event | Date/Year |
|---|---|
| SEBI established | April 12, 1992 |
| PMLA came into force | July 1, 2005 |
| SEBI SAST Regulations | 2011 |
| SEBI ICDR Regulations (current) | 2018 |
| SEBI LODR Regulations | 2015 |
| SEBI Insider Trading Regulations | 2015 |
| SEBI Delisting Regulations (current) | 2021 |
| SEBI Buy-Back Regulations (current) | 2018 |
| SEBI FPI Regulations | 2019 |
| UPI introduced for retail investors in IPOs | January 2019 |
| Currency futures launched on NSE | August 2008 |
| Merchant banking started in India (Grindlays) | 1967 |
| ICICI merchant banking division | 1973 |
| SBI Capital Markets | 1986 |
| ICICI Securities | 1995 |
| Glass-Steagall Act (US) | 1933 |
| Glass-Steagall repealed (US) | 1999 |
| Dodd-Frank Act (US) | 2010 |
Ready for the Exam? Now test yourself on all these numbers with our Free NISM Series IX Mock Test. Bookmark this page for quick last-minute revision. Good luck! NISM Series IX Merchant Banking Certification: Career Guide, Benefits & Comparison with Other NISM Exams
If you're considering the NISM Series IX Merchant Banking Certification, this guide will help you understand what this certification does for your career, how it compares to other NISM certifications, and who should pursue it. This is especially useful if you're entering the investment banking or capital markets space in India.
Study Resources: Complete NISM Series IX Short Notes | Free NISM Series IX Mock Test What Does the NISM Series IX Certificate Certify?
The NISM Series IX certificate certifies that the holder has demonstrated competence in:
- Understanding of Indian capital markets (primary and secondary)
- Regulatory framework for merchant banking in India
- IPO, FPO, Rights Issue, QIP, and preferential issue processes
- SEBI ICDR, LODR, Insider Trading, SAST, and related regulations
- Due diligence and offer document preparation
- Mergers, acquisitions, and takeover code compliance
- Buyback, delisting, SME IPOs, and debt securities issuance
Who Must Have the NISM Series IX Certificate?
The NISM Series IX certificate is mandatory for:
- Persons associated with SEBI-registered merchant bankers who are involved in issue management
- Professionals responsible for preparation of the Draft Red Herring Prospectus (DRHP)
- Personnel involved in due diligence for public issues
- Those handling SEBI filings and regulatory compliance for merchant banking activities
This certification is also highly valued by:
- Investment banking analysts and associates
- CA, CS, CFA, and MBA finance professionals
- Corporate finance professionals in large companies dealing with capital market transactions
- Legal professionals specialising in securities law
Benefits of NISM Series IX Certification 1. Regulatory Compliance
For professionals in merchant banking firms, holding a valid NISM Series IX certificate is a legal requirement. Without it, they cannot legally participate in issue management activities as required by SEBI.
2. Career Advancement
In the competitive investment banking and capital markets domain, the NISM Series IX certification differentiates you from non-certified professionals. It signals regulatory knowledge and commitment to professional standards.
3. Comprehensive Market Knowledge
The exam syllabus covers the entire spectrum of capital market activities — from IPO issuance to M&A to buybacks. This broad knowledge base is invaluable for any capital markets professional.
4. SEBI-Mandated Credibility
Being SEBI-mandated, this certification carries regulatory authority — employers and clients recognise it as a credible benchmark of competence.
5. Career Opportunities After NISM Series IX
Professionals with this certification can pursue careers in:
- Investment banking divisions of commercial banks (SBI Capital, HDFC Securities, etc.)
- Independent merchant banking firms (Axis Capital, JM Financial, Edelweiss, etc.)
- M&A advisory firms
- Regulatory compliance departments of listed companies
- SEBI-registered intermediaries
- Private equity and venture capital funds
NISM Series IX vs Other NISM Certifications – Comparison
| Certification | Focus Area | Difficulty Level | Who Needs It |
|---|---|---|---|
| NISM Series IX (Merchant Banking) | IPOs, M&A, Capital Markets, SEBI Regulations | High | Merchant bankers, Investment bankers |
| NISM Series V-A (Mutual Fund Distributor) | Mutual funds, investor suitability, NAV | Moderate | Mutual fund distributors, AMFI agents |
| NISM Series VIII (Equity Derivatives) | Futures, Options, Derivatives strategies | High | Derivatives dealers, Options traders |
| NISM Series XV (Research Analyst) | Equity research, financial analysis, reporting | High | Research analysts, Equity analysts |
| NISM Series XVI (Commodity Derivatives) | Commodity markets, commodity derivatives | Moderate-High | Commodity brokers, dealers |
| NISM Series X-A (Investment Adviser Level 1) | Investment products, portfolio management | Moderate | Investment advisers (Level 1) |
| NISM Series X-B (Investment Adviser Level 2) | Advanced portfolio management, ETFs, alternatives | High | Investment advisers (Level 2) |
| NISM Series XIII (Common Derivatives) | Derivatives across equity, currency, commodity | Moderate | Dealers in multiple derivative segments |
Is NISM Series IX the Right Exam for You?
You should pursue NISM Series IX if you:
- Work in or aspire to work in investment banking or merchant banking
- Are involved in IPO/FPO/QIP/Rights Issue transactions at your firm
- Are a CA, CS, CFA, or MBA Finance professional wanting to enter capital markets
- Are working in the compliance or legal department of a SEBI-registered intermediary
- Are studying for the SEBI Grade A examination (the merchant banking knowledge overlaps significantly)
NISM Series IX vs SEBI Grade A Exam
While the NISM Series IX is specifically about merchant banking regulations and practice, the SEBI Grade A exam covers a broader range of securities market topics including economics, law, and general finance. However, the merchant banking and capital market sections of SEBI Grade A have significant overlap with the NISM Series IX syllabus, making the two exams complementary preparation targets.
Tips to Clear NISM Series IX in One Attempt
- Read the Official Workbook First: The NISM workbook is the primary source. Do not skip it.
- Create a Numbers List: Collect all regulatory numbers, timelines, and percentages into a single sheet. This is the most frequently tested content.
- Know Your Regulations: Be clear on which regulation covers which activity. The exam tests your ability to match activities with their governing regulations.
- Practice at Least 500 MCQs: Mock tests simulate the exam environment and expose you to question patterns.
- Focus on Chapters 5 and 6: These carry the highest weightage and cover the practical IPO/issue management process in detail.
- Revise SEBI SAST Regulations: Open offer triggers, size, price, and process are frequently tested.
- Avoid Random Guessing: There is negative marking (25% for wrong answers). Only mark answers you are reasonably confident about.
Ready to Clear NISM Series IX? Start with our Chapter 1 Short Notes and work your way through all 8 chapters. Test your preparation with our Free NISM Merchant Banking Mock Test. PassNISM has helped thousands of students clear their NISM exams on the first attempt! NISM Series IX Merchant Banking Exam: 50 Most Important Questions & Answers + Common Mistakes to Avoid
This comprehensive Q&A guide covers the 50 most important questions from the NISM Series IX Merchant Banking Certification Examination syllabus. These are based on the most frequently tested concepts across all 8 chapters. Use this for final-stage revision and identify any gaps in your knowledge before the exam.
Comprehensive Study Resources: Complete Chapter-Wise Short Notes | Master Revision Sheet – All Key Numbers | Free Mock Test Chapter 1 & 2: Capital Markets and Merchant Banking Basics Q1. What is the primary function of the secondary market?
A: The secondary market provides liquidity to securities that have already been issued in the primary market. Investors buy and sell previously issued securities among themselves — the issuing company is not involved in secondary market transactions.
Q2. Which entity regulates the Indian securities market?
A: SEBI (Securities and Exchange Board of India) is the primary regulator. RBI regulates the money market, IRDAI regulates insurance, MCA regulates corporate affairs, and PFRDA regulates the pension sector.
Q3. When was SEBI established?
A: SEBI was established on April 12, 1992, under the SEBI Act, 1992.
Q4. Which was the first foreign bank to offer merchant banking services in India?
A: Grindlays Bank was the first, in 1967. Citibank followed in 1970.
Q5. Which was the first financial institution (not foreign bank) to set up a merchant banking division in India?
A: ICICI, in 1973, following the Banking Commission Report recommendation of 1972.
Q6. What is the purpose of the Glass-Steagall Act?
A: The Glass-Steagall Act (1933) in the US separated commercial banking from investment banking. It was relaxed in 1997 and fully repealed in 1999. The Dodd-Frank Act (2010) later reintroduced restrictions through the Volcker Rule.
Q7. What is a Green Shoe Option?
A: A Green Shoe Option is a post-listing price stabilisation mechanism that allows the issuer to allot equity shares in excess of the issue size by a maximum of 15%.
Q8. What is UPSI under the Insider Trading Regulations?
A: UPSI stands for Unpublished Price Sensitive Information — any non-public information that could materially impact share prices, such as financial results, dividends, mergers, or management changes.
Chapter 3: Registration and Code of Conduct Q9. What is the minimum net worth required to register as a merchant banker?
A: ₹5 crore, as specified under Regulation 7 of the SEBI (Merchant Bankers) Regulations, 1992. This must be maintained at all times.
Q10. What is the registration fee for a merchant banker?
A: ₹20 lakh as a one-time registration fee. Renewal fees are ₹9 lakh every three years from the sixth year onwards.
Q11. Can an NBFC register as a merchant banker?
A: No. Only body corporates other than NBFCs can undertake merchant banking activities and register with SEBI.
Q12. Within how many days must an investor complaint be addressed by a merchant banker?
A: 21 days from receipt of the complaint. SEBI must be kept informed.
Q13. What is SCORES?
A: SCORES is the SEBI Complaints Redress System — a centralised web-based platform introduced via a 2011 circular for handling investor complaints against listed companies and registered intermediaries. Merchant bankers must check SCORES daily.
Q14. For how long must merchant bankers maintain records?
A: A minimum of five years.
Q15. What is the underwriting commitment limit for a merchant banker?
A: Total underwriting commitments cannot exceed 20 times the merchant banker's net worth.
Chapter 4: Issue Management Terms Q16. What is the difference between an IPO and FPO?
A: An IPO is made by an unlisted company issuing securities to the public for the first time. An FPO is made by an already listed company issuing additional securities to the public.
Q17. What is ASBA?
A: ASBA (Application Supported by Blocked Amount) is a mechanism where the application money remains blocked in the investor's bank account until allotment. Only the allotted amount is debited; unallotted amounts are automatically unblocked.
Q18. Who are Anchor Investors?
A: Anchor investors are QIBs who participate in a public issue before it opens to the general public. Minimum application is ₹10 crore. Up to 60% of the QIB portion can go to anchor investors. They have a 30-day lock-in on allotted shares.
Q19. What is the maximum Green Shoe Option size?
A: 15% of the original issue size.
Q20. What is a QIP?
A: A Qualified Institutional Placement (QIP) is a route for listed companies to raise capital by issuing securities exclusively to Qualified Institutional Buyers (QIBs), without going through the full public issue process.
Chapter 5: Issue Management Process Q21. What are the financial eligibility criteria for an IPO on the Main Board?
A: Net tangible assets of at least ₹3 crore in each of the last three years; average operating profit of ₹15 crore over three years; net worth of at least ₹1 crore in each of the last three years.
Q22. How many days must an IPO remain open?
A: Minimum 3 working days, maximum 10 working days.
Q23. What is the minimum subscription required for an IPO?
A: At least 90% of the offer (through the offer document). In a composite offer, the 90% requirement applies only to the fresh issue component.
Q24. Within how many days must securities be listed after the issue closes?
A: T+3 days (T being the closing date), subject to listing approval and execution of the listing agreement.
Q25. What is the security deposit that an issuer must pay before opening a public issue?
A: 1% of the issue size available for public subscription, deposited with the designated stock exchange.
Q26. How many days must a DRHP be available for public comments?
A: At least 21 days.
Q27. What interest rate applies if an issuer delays allotment?
A: 15% per annum.
Q28. What is the minimum number of allottees required in a public issue?
A: 1,000 prospective allottees. If fewer, the issuer cannot proceed with allotment.
Q29. Within how many days must an underwriter subscribe to underwritten securities if called upon?
A: Within 45 days of notification.
Q30. When must the final post-issue report be submitted?
A: Within seven days of finalisation of the basis of allotment, or within seven days of refund (in case of issue failure).
Chapter 6: General Obligations, QIP, Rights Issue Q31. What is the minimum promoter lock-in period in an IPO?
A: For up to 20% of post-issue capital: 18 months. For the balance of promoter holdings beyond 20%: 6 months.
Q32. What is the minimum number of allottees for a QIP exceeding ₹250 crore?
A: At least 5 allottees, with no single allottee receiving more than 50% of the issue.
Q33. What is the lock-in for securities issued via QIP?
A: One year from allotment (except for sale on a recognised stock exchange).
Q34. Can a rights issue be withdrawn after the record date is announced?
A: No. If the issuer fails to proceed, it faces listing restrictions for 12 months.
Q35. What is the only permitted payment method for a rights issue?
A: ASBA is the only payment method allowed for eligible applicants in a rights issue.
Q36. What is the minimum subscription for IDRs?
A: At least 90% of the offer through the offer document.
Chapter 7: Mergers, Acquisitions and Takeovers Q37. What is the threshold for a mandatory open offer under SEBI SAST?
A: Acquiring 25% or more voting rights in a target company triggers a mandatory open offer obligation.
Q38. What is the minimum open offer size under SEBI SAST?
A: The open offer must be for at least 26% of the total shares of the target company.
Q39. Within how many working days must the letter of offer be dispatched to shareholders after SEBI's comments?
A: Within seven working days.
Q40. What is the duration of the tendering period in an open offer?
A: 10 working days.
Q41. Who must an acquirer appoint before making a public announcement for a takeover?
A: A SEBI-registered merchant banker who is not an associate of the acquirer.
Q42. What are "frequently traded shares" under the SAST Regulations?
A: Shares of a target company where the traded turnover on any stock exchange during the preceding 12 calendar months is at least 10% of the total number of shares of that class.
Chapter 8: Disinvestment, Buy-Back and Other Activities Q43. What is the maximum buy-back limit for a listed company?
A: 25% or less of the aggregate of paid-up capital and free reserves, based on the lower of standalone or consolidated financial statements.
Q44. Within how many working days must the merchant banker submit a final report to SEBI after the buyback period ends?
A: Within 15 working days.
Q45. What is the minimum subscription for a public issue of debt securities?
A: 75% of the base issue size. If not achieved, all application money must be refunded.
Q46. What is the SME IPO underwriting requirement?
A: The IPO must be 100% underwritten. The lead manager must underwrite at least 15% of the issue.
Q47. For how long must the lead manager ensure market making for an SME IPO?
A: At least 3 years from the date of listing.
Q48. What is DIPAM?
A: Department of Investment and Public Asset Management — the government body within the Ministry of Finance responsible for managing PSU disinvestment transactions.
Q49. What is an Alternative Investment Fund (AIF)?
A: An AIF is a fund established or incorporated in India as a privately pooled investment vehicle that collects funds from sophisticated investors (Indian or foreign) and invests according to a defined investment policy.
Q50. What is the merchant banker's role in an AIF?
A: The merchant banker must provide a due diligence certificate for the placement memorandum of each AIF scheme, as mandated by SEBI (AIF) Regulations, 2012 and SEBI Circular dated October 21, 2021.
Common Mistakes to Avoid in the NISM Series IX Exam Mistake 1: Confusing IPO and FPO Eligibility Criteria
Remember that the ₹3 crore net tangible assets, ₹15 crore operating profit, and ₹1 crore net worth criteria apply specifically to IPO eligibility on the Main Board. FPO eligibility has different rules (see Chapter 5).
Mistake 2: Confusing Lock-in Periods
There are different lock-in periods for different situations: 18 months for promoters (up to 20% of capital), 6 months for promoters (balance), 6 months for non-promoters in IPOs, 90 trading days for pre-allotment holdings in preferential issues. Don't mix these up.
Mistake 3: Mixing up QIB Allocation Percentages
Under Regulation 6(1): QIBs get not more than 50%. Under Regulation 6(2): QIBs get at least 75%. These are opposite — know which regulation applies when.
Mistake 4: Confusing the Minimum Subscription Percentages
For equity public issues: minimum subscription is 90% of the offer. For debt securities: 75% of the base issue size. These are different percentages for different types of issues.
Mistake 5: Confusing Open Offer Trigger (25%) with Open Offer Size (26%)
The trigger for a mandatory open offer is acquiring 25% or more voting rights. The open offer itself must be for a minimum of 26% of the total shares. These are two different numbers.
Mistake 6: Getting the Registration and Renewal Fees Mixed
Registration fee = ₹20 lakh (one-time). Renewal fee = ₹9 lakh every three years from the sixth year. Don't confuse the amounts or the timing.
Mistake 7: Forgetting Negative Marking
The NISM Series IX exam has 25% negative marking. A wrong answer costs you 0.25 marks. Don't guess blindly — leave a question blank if you're unsure. You need 60 correct answers to pass.
Last-Minute Exam Checklist
- ☐ Know all key numbers and timelines from the Master Revision Sheet
- ☐ Revise investor allocation percentages (RII, NII, QIB) for Reg 6(1) and 6(2)
- ☐ Review SEBI SAST Regulations: trigger (25%), offer size (26%), tendering period (10 days)
- ☐ Revise lock-in periods for promoters and non-promoters
- ☐ Know QIP conditions: 1 year listing, 2-week gap between QIPs, allottee limits
- ☐ Review the SME IPO and buy-back key numbers
- ☐ Remember: NISM Series IX passing marks = 60 out of 100
- ☐ Remember: Negative marking = 25% of marks per wrong answer
- ☐ Carry valid photo ID and admit card to the exam centre
All the Best for Your NISM Series IX Exam! If you've studied all 8 chapters using our short notes and practised with our mock tests, you are well-prepared to clear the exam on your first attempt. Take one final NISM Series IX Mock Test before your exam day. Visit PassNISM.in for more NISM exam preparation resources.