Leasing has emerged in developed countries as in increasingly significant technique of financing assets - particularly industrial equipment. Leasing is now slowly taking hold in the developing countries of Asia. The equipment leasing industry came to India in 1973, when the first leasing company, appropriately named as the First Leasing Company of India (FLCI) was incorporated at Madras. The second leasing Company 20th Century Leasing Ltd. Started operations in 1979. Development of Leasing Finance in India received a boost in the eighties on account of twin constraints of credit sqeeze by the RBI and strict implementation of Tandon and Chore Committee norms. The annual investment in leased asset which was around Rs.50 Crores at the end of 1983, increased to Rs.900 Crores by the end of 1990.

A Lease can be defined as a contractual arrangement where the owner (lessor) of equipment transfers the right to use the equipment to the user (lessee) for an agreed period of time in return for rental. At the end of the lease period, the asset reverts to the lessor unless there is a provision for the renewal of the contract or there is a provision for transfer of ownership to the lessee. The lessee usually bears the costs of insuring and maintaining the asset. In the Indian context the fundamental difference between a Lease transaction and other asset financing plans like hire purchase is that a lease contract cannot provide for a transfer of ownership from the lessor to the lessee whereas the other asset based financing plans carry this feature. Consequently, the tax and accounting aspects of lease transactions are different from that of the other financing plans.

1. Flexibility:
   Equipment leasing is a flexible financing arrangement in the sense that the least rentals can be structured in a manner that squares with the cash flows pattern anticipated by the lessee depending on which, the lease rentals can be evenly spaced out or be stepped out. If the lease finance is availed for a project with a gestation period, the lease rentals can be structured with a deferment period

2. User Oriented variants:
   There are several variants of a lease transaction, which are designed to meet the specific requirements of the lessee. For instance, the upgrade lease helps in hedging the risk of obsolescence or the cross border lease, which reduces the cost of the lease from the lessee's point of view.

3. Tax-based benefits:
   Leasing makes a lot of financial sense to a firm which has no capacity to absorb the investment related tax shelters like depreciation.

4. Less paper work :
   Expeditious disbursement, convenience, hundred percent financing and better utilization of own funds are the other advantages. Another unique advantage is 'Off Balance Sheet Financing' in the sense neither the financial commitment nor the value of the assets acquired under a finance lease needs to be disclosed in the balance sheet of the lessee. Other firm-specific advantages are in the case of closely held companies using this method to finance their equipment because it does not result in dilution of control.

There are of course deterrents also to leasing namely the restrictive covenants on the usage of the asset, the non-cancelable feature of a finance lease, which restricts the flexibility to disinvest and the high cost of lease finance vis-a-vis most forms of borrowing.

The constraints not withstanding there is considerable scope for the growth of leasing in developing countries like India. In particular, leasing can play an increasingly important role in promoting productive use of machinery and equipment by small and medium-sized enterprises in the private sector. Many of these enterprises would find leasing more suited to their requirements than conventional bank borrowings.

The market for outstanding securities is referred to as secondary market or, more popularly, the stock market. This market in India consist of recognized stock exchanges operating under the rules, bye-laws, and regulations duly approved by the government

The stock market in India is regulated by the central government under the Securities Contracts (Regulation) Act, 1956. This legislation inter alia, provides for the following:

1. Recognition of stock exchanges:
   The central government on being satisfied that the rules, bye-laws of the stock exchange ensure fair-trading and protect investor's interest grants recognition to the stock exchange.

2. Supervision and control of recognized stock exchanges:
   Stock exchanges are subject to Government supervision and control. The Securities Contracts (Regulation) Act empowers the Government to make enquiries into the affairs of a recognized stock exchange, supersede the governing body, take over properties, to suspend its business, withdraw recognition and to take complete control. Presently the Government exercises these control through a statutory authority called SEBI (Securities and Exchange Board of India).

3. Regulation of contracts in securities:
   The Securities Contracts (Regulation) Act contains several provisions for strict regulation of contracts in securities transacted in the Stock exchanges. All contracts in securities, which are not entered into through, with, or between members of recognized stock exchanges, shall be illegal and punishable with fine or imprisonment. Members of a recognized stock exchange can act both as brokers and dealers. However no member can enter into contract as a principal with any person other than a member of recognized stock exchange.

4. Listing of securities:
   The Central Government/ SEBI can require a public company to get its securities listed on a recognized stock exchange, it is deemed necessary or expedient in the interest of the trade or in the interest of the investors.

5. Transfer of securities:
   To ensure free transferability of shares, the Act was recently amended to specify certain grounds only on which a company can refuse registration of transfer.

Indian Stock exchanges thus operate under strict control and supervision of SEBI/Government, which help to make the stock exchange a pivotal institution in the financial system and able to discharge its following functions

1. It performs an 'act of magic' by translating short-term and medium-term investments into long term funds for companies:
   Most of the investors are interested in short-term to medium-term investments The requirements of companies are long-term in nature, as they require equity capital on a more or less permanent basis and debenture capital for 7 to 10 years. Thanks to the negotiability and transferability of securities, through the stock market, it is possible for companies to obtain their long-term requirements from investors with short-term and medium-term horizons.

2. It ensures a measure of safety and fair dealing:
   The rules, bye-laws and regulations of stock exchanges which are approved by the Government, are meant to ensure that a reasonable measure of safety is provided to investors and transactions take place in competitive conditions which are fair to all concerned.

3. It directs the flow of capital in the most profitable channels:
   Companies, which have more profitable investment opportunities, are normally able to raise substantial funds through the stock market, whereas companies, which do not have such opportunities, are normally not able to do so. As a result, the stock market facilitates the direction of the flow of capital in the most profitable channels

4. It induces Companies to raise their standard of performance.:
   When the equity capital of a company is listed on a st0ck exchange, the performance of the company is reflected in the market price of the equity stock, which is readily available for public information. In other words, the company's performance is more 'visible' in the eyes of the public. Such a public exposure normally induces companies to raise their standard of performance.

A merger refers to a combination of two or more companies into a single company. This combination may be either through absorption or consolidation. In an absorption, one company absorbs another company, whereas under consolidation two or more companies combine to form a new company. In legal parlance, mergers are also referred to as amalgamations. The main motives for mergers are to secure:

• economies of scale

• financial economies

• Growth

• Diversification

• Managerial effectiveness

When a merger takes place between two companies in the same line of business, it is called horizontal merger. On the other hand a vertical merger is one in which the buyer expands backwards and merges with the company supplying raw material or expands forward in the direction of the ultimate consumer. When the merging companies are in totally unrelated lines of business, it is a case of conglomerate merger.

Both acquisitions and takeovers are more or less the same, when one company acquires another company. In an acquisitions it is done with the consent of the company to be acquired under a genuine contract, where as under takeover, no such consent of the Company to be taken over is secured. In both cases there is no merger or amalgamation and the two companies, acquiring company and the acquired company exists as separate entities. Thus weaker companies or smaller companies may opt to be acquired by bigger corporate entities, for better operational benefits. On the other hand a takeover involves the acquisition of a certain block of equity capital of a company, which enable the acquirer to exercise control over the affairs of the company. In theory, the acquirer must buy more than 50% of the paid up equity of the acquired company to enjoy complete control In practice, however, effective control can be exercised with a smaller holding usually between 10 to 40 percent, because the remaining shareholders scattered and ill-organized, are not likely to challenge the control of the acquirer

According to Charles A. Scharf, the element of willingness on the part of the buyer and seller distinguishes an acquisition from a takeover. If there exists willingness of the company being acquired, it is known as acquisition. If the willingness is absent, it is known as takeover.