Sell-Side

What is Sell-Side?

The Sell-Side is that area of the financial industry which focuses on producing, marketing, and distributing financial products and services to investors and other financial institutions. This includes investment banks, brokerage firms, as well as research organizations that would help clients with a transaction and provide advisory services.

Functions Needed in the Sell-Side

1. Researching and Analysis: This is where one produces equity, bond, or market research to inform decisions for investors.
2. Investment Banking: Advisory role to the clients in terms of raising funds through IPO, bond issues or private placement.
3. Brokerage Services: Execution of buying and selling orders for the client in financial markets.
4. Market Making: The one who provides liquidity and buys as well as sells securities to ensure orderliness of the market.
5. Advisory Services: Merger, acquisition or corporate restructuring

Role of Sell-Side in Financial Markets

• Provision of Liquidity: It ensures smooth trading and, therefore, market operations.
• Price Discovery: It helps in ascertaining the right market price of financial products.
• Connecting Buyers and Sellers: An intermediary in the financial transaction
• Market Intelligence: It is a collection of research reports and market analysis that aid in generating valuable insights

Sell-Side vs. Buy-Side

• Sell-Side: It sells financial products and services and, more often than not, derives revenues from commissions or fees.
• Buy-Side: They are the mutual funds, hedge funds, and pension funds that buy a security for investing.

Examples of Sell-Side Activities in India

• IPO Management: There are investment banking firms like ICICI Securities, Kotak Investment Banking, that assist companies of India to let out their IPO.
• Equity Research: They are Motilal Oswal, etc., that supply equities recommendation or analysis for its clients.
• Brokerage Services: Zerodha and Angel One allow any retail investor to get into the mainstream stock market and trade.

**Why the Sell-Side Matters?

The Sell-Side is actually essential to functioning markets. It provides the impetus for market activity, supports corporate fundraising, and allows investors to obtain the tools and insights needed to make informed decisions.