Rabo India, the 100 per cent arm of Netherlands-based Rabo Bank, will start merchant banking from March.

"We will start the operation of Rabo India Services, the merchant banking business, by next month," Rabo Finance India CEO and managing director Rana Kapoor said in New Delhi.

He said the Rabo Finance India Limited would be applying to Reserve Bank of India very shortly.

Having brought in additional $25 million recently to enhance capital, Rabo India had become a 100 per cent subsidiary of Rabo Bank since the Indian arm had met the statutory capital limit of a minimum of $50 million, Kapoor said.

He said with the $50 million bench-mark, Rabo India Finance had got approval from the "automatic" route of Foreign Investment Promotion Board and was eligible to set up "downstream" subsidiaries like the merchant banking business.

With the new set up, Kapoor said Rabo India would be extending its advisory services, including in the mergers and acquisitions, private equity and structured debt.

Asserting that the endeavour of the company was to roll out several value-added products, he said in the near future, Rabo would also undertake advisory services in "certain selective" IPOs.