For smooth and effective governance of corporate organizations and to achieve a sustainable development in the corporate fraternity, organizations require finance both for financing the fixed capital as well as for working capital. Finance is such an important aspect of business that enterprises cannot sustain without its interference and as such right from its incorporation till it’s winding up finance occupies a pivotal position. It is not only for the small and big enterprises which requires finance but also the entire economic structure of the country keeps reliance on it. As corporate sector contributes towards Indian economy about 53 % of Gross Domestic Product, the role of security market under the cloak of Security Exchange Board of India plays an important role in contributing to the Indian Economy. Security market also known as the stock market is a platform where a company can raise its fund or share-capital through the means of various kinds of marketable and financial instruments carrying voting rights, interest and payment of dividend both at domestic and international level. For a sustainable corporate governance, a compliance framework has to be established which will help and support the risk management system during identifying the sources of corporate funding and the pools of fund both from domestic capital market and international markets. Corporates should first create an established framework which will help them to evaluate and assess their financial requirement to the extent of managing funds from various sources. It is true that a company issues securities to the investors through the mechanism of initial public offering and further public offering in primary market and in furtherance such securities are additionally traded in secondary market through the platform of recognized stock exchange which makes it crystal clear that there is no direct congruence or connection between the issuer company and the security holders. In this gap the role played by the intermediaries are pertinent for the operations relating to issuance and trading of securities and as such merchant banker is one of the key intermediary in capital market appointed by the issuer company for public issue management. The paper will focus on the role played by the merchant banker in primary market. It will also attempt to define how the merchant banker functions with due regard to public issue management, credit rating of shares and how it complies with the changing laws and regulations for an effective management of corporate transactions.