The moment we hear the term Investment Banking, all we can think of is the high-paying, lucrative, white collared jobs. The term Investment Banking is almost synonymous with fat paychecks. But what exactly is Investment Banking all about? What is the nature of this job? What are the investment banking course eligibility criteria, and who is the right fit for this sort of work profile? Let’s delve deeper and understand this field better.
Investment Banking is a niche in the world of finance. Investment Bankers specialize in dealing with complex transactions like mergers and acquisitions as well as helping organizations/institutions to raise capital. Investment bankers offer assistance in transactions involving buybacks, takeovers, debt syndications, restructuring, debt and equity issuance, etc. In this article, we shall understand Investment Banking as a career option and the investment banking course eligibility.
Career as an Investment Banker
Investment Banks are institutions that act as financial advisors to big institutional clients. They help their clients navigate through complex financial transactions. They also do in-depth research about their clients, their vision, mission, and objectives and accordingly, strategize an action plan to utilize the opportunities available or overcome the challenges faced by their clients.
Investment banks generally offer their services to large institutions, organizations, governments, etc. They help their clients in their financial transactions and fund-raising activities. They work mostly on a commission model. Since it’s a highly specialized job, Investment Banks usually have lean teams and hence it’s easier to dole out higher packages to a small set of employees.
The demand for professionals in this field is at an all-time high. The Global Investment Banking market is predicted to reach approximately $138 billion by the year 2025. Therefore, it’s one of the most sought-after careers in the current times.
An ideal candidate for this career possesses strong analytical skills and enjoys working with facts and figures. Strong communication skills are an added advantage. Love for numbers and an analytical bent of mind are at the heart of this field.
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Skill Set Required for an Investment Banker
Apart from the investment banking course eligibility, an aspirant should also keep in mind the kind of skills required to achieve success in this field. Let’s take a look at the skills required –
- Strong Mathematical Foundation: Since the job requires a lot of computation and data analysis skills, it’s a good choice for people with strong mathematical abilities.
- Communication Skills: An ideal candidate should possess strong communication skills as it requires part marketing and part negotiation to deal with large institutions and corporations.
- Ability to work under pressure: The transactions involved are large and the parties involved are usually big corporates, multinationals, etc hence the stakes are usually pretty high. The work involves long work hours and the ability to handle stress.
- Understanding of the economy & businesses: Staying abreast with the latest developments in the economy and the markets is essential to succeed in this field. The better the understanding of the business the better advice one can offer to their high-profile clients.
- Negotiation Skills: Finalizing big deals requires excellent negotiation skills. The parties involved are high profile and extremely well-versed, one needs exceptional negotiation skills to work with such learned clients.
To know the Investment Banking course eligibility, one needs to understand that though at an undergrad level, it doesn’t matter much which field you have opted for. However, a degree in finance, statistics, economics, or management helps.
At a later stage professional or degree courses in Investment Banking, Master in Business Administration, Chartered Financial Analyst, Chartered Accountant, etc. boosts your prospects in this field.
An aspiring candidate should possess a thorough understanding of subjects like accounting, taxation, corporate finance, mathematics, financial modeling, economics, etc. to make it big in this field. At an entry level, you start as an Intern/Junior Analyst who moves up to Senior Analyst before moving to a leadership position.
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Scope of Investment Banking in India
Organizations like Goldman Sachs, JPMorgan, Morgan Stanley, Deutsche Bank, Citigroup, Credit Suisse, HSBC, and Nomura are some most coveted names in the field of Investment Banking. Today, India is the 5th largest economy in the world with a GDP of $3.7 Trillion.
The pace of growth in the Indian industry has brought along greater action in the field of mergers & acquisitions. For instance, the most talked about merger of HDFC Ltd, the mortgage lender with HDFC bank is alone valued at $40 billion.
Similarly, the booming economy usually witnesses a large number of companies tapping the markets to raise capital through the IPO route. In the year 2022, India ranked 3rd in terms of number of IPOs. Such complicated transactions create a demand for specialists such as Investment Bankers.
To understand the depth of this segment, consider the data shared by Refinitiv that states that the total volume of Mergers and acquisitions in India was roughly $172 Billion in the year 2022.
The primary services offered by Investment Banks are:
- Mergers & Acquisitions: Investment Bankers help in doing the due diligence and arriving at fair valuations for the prospective companies. They help in arriving at the fair value of the targeted company and help negotiate a good deal for their client. They also help in getting necessary permissions and fulfilling all legal formalities mandatory before such transactions. For example, the merger of L&T Infotech and Mindtree was facilitated by Axis Capital Ltd and Citigroup Global Markets India Pvt Ltd.
- Raising Capital: Investment Bankers help organizations raise capital via the Initial Public Offerings (IPO) route, Follow On Public Offer, or through bond issuance, etc.
Example: Zomato’s IPO was facilitated by Bank of America, Citi, Kotak Mahindra Capital, Credit Suisse, and Morgan Stanley. Another example is that of Yes Bank when it raised capital via the Follow On Public Offer (FPO) route in July 2020. These banks also help in debt and equity issuances, restructuring, etc.
- Research: They specialize in Equity Research, Macroeconomic research, and credit research which helps their clients to make well-informed decisions. Their research also helps their clients zero in on their merger or acquisition targets. The research helps them to understand the benefits of the proposed transaction. A well-researched deal can help organizations increase their market share and result in greater profits of economies of scale.
With the nature of financial transactions becoming even more complex by the day and coupled with digitization, this field is expected to boom shortly. The advancement in technology and a growing combination of finance and tech will only lead to greater demand for skilled professionals in this field. Investment Banking is anticipated to be the third largest sector in the banking space.
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The Investment Banks Can Be Classified Into Three Major Categories:
- Bulge Bracket Banks – As the name indicated, these are big, international players like Credit Suisse, JP Morgan, Bank of America, Goldman Sachs, etc which operate with a large base in terms of their presence across the globe as well as a large number of employees. They mostly deal with crème-de-la-crème clients, the Fortune 500 companies. Another distinguishing feature of these Bulge Bracket banks is that they offer a full range of services like trading, asset management, equity research, financing (long-term, short-term financing) along with the core activities of Mergers and Acquisitions.
- Middle Market Banks are those which lie in between the Bulge Bracket Banks and Boutique Banks. They have a fairly large presence compared to a Boutique Bank. The salient features of these banks are that their deal sizes are mostly in the range of $10 Million to $500 Million. Moreover, they have strong local footprints but do not have a strong global presence. A lot of them focus on particular services or deal with companies in a specific sector or market. For instance, Keefe, Bruyette & Woods is an Investment Banking firm based in New York that exclusively deals in the Financial Services sector. In Indian markets, Edelweiss Financial Services, Axis Capital, etc are some examples of Mid-market banks.
- Boutique Banks: It is further subdivided into Regional Boutique Bank and Elite Boutique Banks. These banks generally do not offer a full suite of services but offer specialized services. They are small in terms of the deal size as well as the number of employees. They are typically limited to particular markets/countries.
The high-profile nature of this field attracts the interest of a lot of youngsters. Investment Banking is one of the highest-paying jobs in the field of Finance. At an entry-level, one can expect an average package of INR 8 Lakhs to INR 10 Lakhs per annum. At a mid-senior level, one can easily expect a salary of INR 30 lakhs and above.
Other factors that influence the pay-outs include the qualification, experience, and knowledge of the candidate, skills displayed by them, job location, and the hiring organization. Due to the nature of the skills required for being an Investment Banker, the number of vacancies is also limited.
Besides the technical skills an ideal candidate should be able to work for long hours, should be adept at working under pressure, and should be an effective communicator. Apart from the fixed cost of the employees or Cost to the company (CTC), a large part of the earnings come in the form of yearly bonuses which are dependent not just on the individual’s performance but on the overall performance of the company.
For an average year, the bonus expected can be anywhere in the range of 80-100% of the CTC, and for a good year, the expected bonuses can range between 200%-300% of the CTC.
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Types of Organizations Hiring Investment Bankers
Investment bankers act as advisors to MNCs, large corporates, institutions, and even Governments. They help them raise capital or assist them in acquiring or merging with other entities or even arranging the sale of the company. Companies that specialize in financial management and corporate finance are the ones that hire investment bankers. Some of the most sought-after Investment Banking companies in India are:
- J.P. Morgan Chase: One of the leading and oldest financial institutions in the world. It started as a commercial bank and later expanded its offering in the field of investment banking. Headquartered in New York it is one of the top investment bankers across the globe.
- Goldman Sachs: An established name in the field of investment banking and investment management across the globe. It was founded in 1869 and continues to be amongst top top-ranking investment banking firms in India.
- Morgan Stanley: An American Investment bank and financial institution with a presence across 41 countries is another well-known Investment Banking firm.
- Citigroup: A multinational investment banker and financial services company.
- Avendus: It was founded in the year 1999 by co-founders Gaurav Deepak, Ranu Vohra, and Kaushal Aggarwal. The company is headquartered in Mumbai.
- Axis Capital Limited: A wholly owned subsidiary of Axis Bank, Axis Capital specializes in Investment Banking and Institutional Equities.
- Kotak Mahindra Capital Company Ltd: A subsidiary of Kotak Mahindra Bank, they provide full-suite investment banking services to various institutions across sectors.
- Barclays Bank PLC
- BNP Paribas
- Deutsche Equities Pvt Ltd
- Edelweiss Financial services ltd.
- ICICI Securities Ltd.
- Religare Capital Markets Ltd.
- SBI Capital Markets Ltd
- SMC Capitals Ltd.
- Ernst & Young
- Genpact etc. are some of the known names offering Investment Banking services in India.
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Top Investment Banking Courses
Aspirants flock to top B schools to pursue degree/diploma courses in Investment Banking. Apart from these degree/diploma courses, several institutions offer certificate courses in Investment Banking.
Apart from investment banking course eligibility criteria, there are certain factors that you should look at before finalizing the right course for yourself.
- Curriculum Covered.
- Duration of the course.
- Fee Structure
- Placements Offered
Institutes Offering Courses With The Investment Banking Course Eligibility
There are several options to pursue Investment banking courses in India. These are Certification Programs, Diplomas, Post Graduate Programs, Undergraduate Programs, and self-paced ones. The traditional approach is to get an MBA from the Top B-schools like IIMs. For a graduate from a Quant-heavy background, there are options to join as a Junior Analyst and then work their way up the corporate ladder.
1. National Stock Exchange:
NSE offers a Post Graduate Program in Investment Banking and Research. The duration of this course is 10 months / 670 hours. A fresher or a working professional can easily opt for this course as it’s offered via three modes: Full-time Classroom training, Weekend Programs, and Live Virtual Classes.
After completion of this course, the candidate is armed with a post-graduate degree from NSE along with in-depth knowledge of M&A, Credit analysis, Equity Valuations, Project Finance, etc.
The faculty includes experts from IIMs and CFAs who have relevant experience in the field. With the assurance of 100% placement assistance, the course comes for INR 99,000.
2. Indian Institute of Management, Indore:
IIM Indore offers Post Graduate Certificate Programme in Investment Banking (PGCPIB). Graduates from any discipline with a minimum of 2 years of work experience can apply for this course. The duration of the course is 12 months. The course is conducted online with 5 days of on-campus modules.
The pedagogy used is a mix of case studies, projects, lectures, assignments, etc. The course fee is approximately 4,55,000 (Including GST). Upon successful completion of the course, the candidate shall be eligible for the Executive Education Alumni Status of IIM Indore.
DataTrained offers a Post Graduate Program in Investment Banking & Financial Modelling. It’s a certificate course that is industry-recognized. The duration of the course is 6 months. They also offer weekend classes to make it more convenient for working professionals to upskill themselves.
The fee for the course is 90,000 + GST (EMI options available). The faculty includes mentors from Morgan Stanley, JP Morgan Chase, and Citi Bank. The curriculum has been designed by experts from IIMs. DataTrained offers 200+ hours of content with 10+ Case Studies and Projects.
There are 30+ hours of Project-based learning. Content delivery is a mix of pre-recorded lectures, live sessions, case studies assignments, etc. Apart from academics it also offers assistance in Profile enhancement Resume Building, Interview preparation as well as placement opportunities for the candidates.
4. Imarticus Learning:
Certified Investment Banking Operations Professional is a Certificate program best suited for finance professionals with less than 3 years of experience. The certification offered is internationally accredited. An industry-recognized program that comes with a job guarantee.
The Program is live Online and in the Classroom with an option to attend on weekdays or weekends. The course duration is roughly 150 hours spread over 2-3 months. Imarticus has 400+ corporate partnerships which helps the candidates to be industry-ready.
The program involves simulations and case studies which help prepare an individual for their role as Investment Bankers. Imarticus boasts of an 85% placement record with an average salary of up to 9 lakhs. The program fee is Rs. 1,40,000 with an option to pay in EMIs too.
Udemy offers a certificate course on the complete Investment Banking Course 2023. This is a complete online pre-recorded module. It’s 13.5 hours of on-demand videos. It’s a 4.5-star rated course. The course covers four important areas of Investment Banking – Capital Markets, Advisory, Trading & brokerage as well as Asset Management.
The course comes at a fee of as low as INR 399 and a 30-day money-back guarantee. It’s a self-paced program ideal for candidates who wish to learn the nuances of Investment Banking at their own pace. The course includes quizzes, excel files, real-life case studies, etc. to facilitate learning.
Frequently Asked Questions Related To Investment Banking Course Eligibility
Question: What is the average salary earned by Investment Bankers in India?
Ans: The average salary of an Investment Banker in India is in the range of INR 8 lakhs per annum to INR 10 lakhs per annum. A seasoned Investment banker can easily make anywhere around 50 lakhs per annum.
Ques: What is Investment Banking?
Ans: Investment Banks are organizations that specialize in assisting large corporates, multinationals, institutions, and even Governments to raise capital via the issuance of equity or debt securities. They have expertise in complex transactions such as Mergers and acquisitions, Buybacks, private placements, secondary market offerings, etc. They can be engaged from the buy side or sell side activities. Investment banks are different from commercial banks in the sense that they do not accept deposits and their clientele includes big corporates, organizations, etc. Commercial banks reach out to investment banks for any transactions involving IPO, M&A, buybacks, etc.
Ques: What are the skills required to build a career in the field of Investment Banking?
Ans: An aspirant needs the following skills to be a successful professional in the field of Investment Banking:
- Analytical Skills
- Number crunching/data interpretation
- Presentation skills
- Good in communication
- Negotiation Skills
- Ability to work long hours
- Strong business acumen
- Networking skills
- Critical Thinking
- Attention to detail
- Leadership skills
Ques: What are the investment banking course eligibility criteria?
Ans: The investment banking course eligibility is primarily graduation from any stream with a minimum of 50% marks is eligible for this course. However, it is ideal for candidates from quant-heavy backgrounds like a Bachelor’s in Commerce, a Bachelor’s in Business Administration, or a degree in Economics, Statistics, Mathematics, etc. A master’s degree or a Master’s in Business Administration, Chartered Accountant, or Chartered Financial Analysts are certainly best suited for these courses.
Ques: What are the career options one can opt for after completion of the Investment Banking course?
Ans: After successful completion of the Investment Banking course, a wide variety of career options become available to the candidate such as Chartered Wealth Manager, Cost and Management Accountant, Certified Public Accountant, Research Analyst, etc. Private Equity firms, Hedge Funds, Venture Capitalists, and Asset Management Companies are some avenues where one can find lucrative job options.
Investment banking is a new-age career option that holds immense potential. With the financial markets across the globe becoming more complex and interwoven, the demand for investment bankers is only going to grow. An aspirant should study through the investment banking course eligibility criteria, the skills required, and various institutions offering these courses and then finalize the course they wish to pursue. Hope this article helps students make an informed decision.