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How Is Investment Banking as a Career in India?

There are hundreds of investment banks in India, in addition to multiple foreign investment banks. A record-breaking year for India’s investment banking industry in 2021 saw investment bankers earn Rs 2,200 crores. Investment bankers are working in many many banks and firms. Hard and patience are the base for becoming an investment banker but career growth, salary, and prestige make it an alluring career path in India. This article is all about investment banking as a career in India, how to become an investment banker and its advantages.

A guide to investment banking as a career in India

What is Investment Banking?

Financial advisory services are a vital component of investment banking. It is known for facilitating large-scale financial transactions, implementing complex deal structures, and providing high-level financial advice. Investment banking is a division of banking operations that serves.

This sector raises capital and helps individuals, governments, or corporations to grow. It also offers underwriting and advisory services to the corporation. Investment banking is an intermediate between corporations requiring capital to develop and investors with money to invest.

Among the ways these banks raise cash for companies is by underwriting new securities for corporations, municipalities, or other institutions. They buy all the shares and resell them on behalf of the user to take a commission or buy them and sell them by themselves.

There are three divisions of investment banks:

The front, middle, and back offices are three investment bank divisions.

The front office represents the customer-facing division. Most of the earnings of an investment firm come from this section.

The middle office sits between the front and back offices. This division deals with financial profit, loss, and internal control. Besides it also takes care of the IT sector.

The back office usually doesn’t deal with the client. It verifies data of previous trades, all operations, and technology.

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Overview of Investment Banking in India

Now, Investment banking in India offers exciting opportunities for ambitious professionals looking to make a mark in the finance industry. The investment banking industry in India has undergone significant changes over the years.

In the nineteenth century, European merchant banks first established trading houses. Since then foreign banks have been ahead in investment banking in India.

As early as the 1970s, the State Bank of India made merchant banking a business. ICICI Securities became the first Indian financial institution to do so. As banking became more popular, more than 30 merchant banks, financial institutions, and commercial banks began to operate.

In the 1980s banking was not popular but SEBI registered more than 1500 bankers as an industry in the 1990s to regulate this huge number of banks, the Association of Investment Bankers started.

 

Top Investment Banks in India

Investment banking as a career in India provides a challenging yet rewarding career path. In India, these are some of the top investment banks that offer corporate, government, and institutional clients investment banking services. In India, some of the investment banks are domestic and some are foreign.

  1. J. P. Morgan
  2. BofA Securities India Limited
  3. Goldman Sachs
  4. Morgan Stanley
  5. Citigroup Global Markets India Private Limited
  6. Kotak Mahindra
  7. Axis Capital
  8. ICICI Securities Limited
  9. JM Financial Limited
  10. SBI Capital Markets Limited
  11. Avendus Capital
  12. Edelweiss Financial Services Limited (EFSL)
  13. IDBI Capital
  14. Bank of America Merrill Lynch
  15. Deutsche Bank
  16. Credit Suisse
  17. UBS
  18. HSBC
  19. BNP Paribas
  20. Barclays
  21. Standard Chartered
  22. IDFC First Bank
  23. IIFL Securities
  24. Yes, Bank.

These are just a few examples of the top investment banks in India. All these help one to choose investment banking as a career in India.

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The Function of an Investment Bank

An investment bank provides a variety of financial services, such as capital markets, mergers and acquisitions, and corporate finance.

  1. The primary function of investment banks help companies raise capital through initial public offerings (IPOs), follow-on public offerings (FPOs), and rights issues.
  2. Invest bank also offers project loans, term loans, working capital loans, commercial borrowing, etc to the company that need more finance to grow.
  3. M&A advisory service is another service the investment bank offers. Besides they also facilitate the buying, selling, and merging of companies.
  4. They are responsible for risk management. As we know a business is associated with many risks such as investment risks, legal risks, operational risks, and more. Investment bank guide to minimize the risk.
  5. They launch an initial public offering ( IPO) and raise capital by issuing their shares to the public.
  6. In terms of underwriting, the first process comes in when the investment bank first makes a prospectus with a price range.
  7. The investment bank keeps an eye on the stock market to make the company profitable.

These banks offer asset management, wealth management, securities products, and more.

 

Types of Investment Bankers 

Finance has different areas and investment bankers work in different roles in firms or banks. New and experienced investment bankers share this industry. Each position comes with its own level of responsibility and expertise.  A standard path is to follow to reach the top level.

Here are some common types of investment bankers:

  1. Managing director
  2. Director
  3. Vice President investment banker
  4. Associate investment banker
  5. Analyst investment banker

Depending on the structure of the firm, there may also be Senior Analysts, Senior Associates, and Executive Directors.

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Investment Banker and Role of an Investment Banker

Investment bankers are financial professionals who work in investment banking. The role of an investment banker is to provide institutional clients with capital raising and merger and acquisition support by combining financial services expertise, analytical abilities, and effective persuasive communication skills.

An investment banker may also provide financial advice to corporate clients in addition to building strong client relationships. If you consider investment banking as a career in India, check here to see what you may have to do.

  1. Capital Raising is the primary role of an investment banker
  2. Risk analysis and minimizing it
  3. Managing and supervising Initial Public Offerings (IPOs)
  4. Researching and reviewing market trends
  5. Identifying potential investors
  6. Collect information about regulatory and legal issues in the financial industry
  7. Investment meeting arrangements and client
  8. Managing private Placement of Capital
  9. Negotiating Mergers and Acquisitions
  10. Performing stock market research and preparing a brief report
  11. Act as a role model for junior colleagues
  12. Representing the firm in networking events
  13. Corporate Restructuring to Solve Problems
  14. Debt & Equity Advisory to the client to increase capital
  15. Bond Issuance is another critical role they perform
  16. Pricing on Bond Markets
  17. Product Selling Securities
  18. Maintaining client relationships and communicating
  19. Fund Advisory Services
  20. Underwriting the deals for clients
  21. Preparing forecast reports, models, and report

An investment banker plays a wide range of responsibilities in the investment industry. They work in a dynamic field that changes rapidly. They are the trusted advisors to their clients to guide and manage their financial needs.

 

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Where Do Investment Bankers Work?

An investment banker can work in various types of organizations but their primary job station is any financial organization. So investment banks, private equity firms, or any financial advisory institutions are their working place. let’s see some common organizations where investment bankers can work.

  • Investment banks

An investment banker’s primary workplace is an investment bank. They work in large multinational investment banks, such as Goldman Sachs, JPMorgan Chase, Morgan Stanley, Citigroup, and Bank of America Merrill Lynch.

  • Corporate banks

They can work in the corporate bank investment section. These banks provide a range of services and investment banking is one of them.

  • Private equity firm

Some investment bankers work in private equity firms that specialize in acquiring or investing in companies. Investing specialists conduct due diligence, negotiate deals, and manage firms’ portfolios.

  • Dept capital markets

This area works with financial institutions, publicly and privately owned companies, and agencies in order to service debt obligations.

  • Corporate finance

Corporate finance hires investment bankers to deal with areas of mergers and acquisitions, public offerings, and lending are all specialties of this area.

  • Venture Capital Firms

Startups and early-stage companies may receive funding from venture capital firms and they hire investment bankers to do analysis.

  • Asset management firms

Some investment bankers work in asset management firms. They analyze investments, manage portfolios, and examine potential investment opportunities.

It’s important to note that investment banking can involve long hours and a demanding work schedule, regardless of the location. An investment banker can also work remotely. As recently virtual work and remote work work are common in this industry.

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How to Become an Investment Banker?

Investment banking deals with financial services to different government, and non-government organizations. Financial modeling, accounting, and maths are playing the main part of this job. So interested and dreaming of becoming an investment banker is very important to become an investment banker.to take investment banking as a career is challenging too. Let’s see the steps to becoming an investment banker

Step 1

Passing the upper secondary exam with a 50 % or equivalent GPA from a recognized board is the primary step to take. During that period studying commerce with add benefits and make your journey easy though you can choose arts or science too.

Step 2

Passing the entrance exam is hard and challenging for graduation or post-graduation. The status of your institution will affect your Investment Banking As a Career in India.

Step 3

Study finance, economics, business, or a related discipline to earn a Bachelor’s degree which is 3 or 4 years duration.

Step 4

You can do a master’s degree in finance, economics, or accounting but a 2 year MBA in finance is considered a very option for investment banking seekers. if you want to earn your master’s degree in six to nine months then the National Stock Exchange Academy is best for you. They offer masters in investment banking and capital market, banking, financial planning, and management accounting.

 

Step 5

For a highly ambitious one, a doctorate degree is recommended. This may take 3 years to complete but remember you will need good marks to get into this program.

Step 6

To enhance your career obtain a professional certificate such as a chartered financial analyst. You can join them after your bachelor and it may take one to four years to complete. Their syllabus includes practical and intensive training on finance and investment.

Step 7

Look for internships in investment banks through websites, HR, seniors, or campus placements. Internships may take 2 months to 2 years. Besides gaining practical knowledge you will learn teamwork and communication.

Develop Technical skills and do some courses on financial tools to rich resumes. The job interview is quite hard and they ask mostly about technical issues related to investment banking. The more people you network with and the more relationships you build, the more opportunities you will secure in the investment banking industry.

Benefits of a Career as an Investment Banker 

Investment banking offers several potential benefits for those pursuing a career in the field. Here are some of the key benefits:

  • High salary

The financial industry is a lucrative career choice for most investment bankers. most of them enter this industry to have high salaries and better life opportunities. For people who prioritize their earnings when choosing a career path, investment banking is their cup of tea.

  • Extensive training to learn

You will go through extensive training in financial modeling, data interpretation, accounting, working with a team, dealing with clients, research, and more. So this will add value to you and will help you even if you want to switch careers.

  • Opportunity to earn extra

Compensation for investment bankers makes this career appealing. addition to the high salary they get, commission, performance bonus, and the stock option to earn more.

  • Strong network-building opportunity

Investment bankers interact with high officials for work purposes and to build relationships. These members can help to find a better opportunity. They can serve as a strong reference in a big organization. Besides, high-profile transactions can put you in the limelight. You can build relationships with wealthy individuals through these sectors.

  • Working with a smart brain

Investment banking co-workers and clients both are smarter and dealing with smart people makes you smarter. Driven people are kind of best teachers and you will never get those teaching in a book.

  • Experience comes faster

Investment banking discipline is evolving continuously so with previous knowledge, you will need to upgrade yourself to survive in this sector. This is a great choice for the focused person.

 

  • Prestige and Reputation

Investment banking is widely regarded as a prestigious profession as people consider them talented rich people. Working in finance organizations increases their professional reputation.

All these benefits make investment banking as a career in India a choice. Investment banking as a career in India is highly dynamic, which allows professionals to develop a broad range of expertise and establish a strong career foundation.

By choosing investment banking as a career in India, it is possible to make a significant contribution to India’s financial landscape while building a successful and rewarding career. While investment banking offers numerous benefits, it also requires a lot of effort and time.

A Career as an Investment Banker Takes How Long?

How long it takes depends on what you want to be or where you want to see yourself. The length of time it takes to build a career as an investment banker can vary depending on various factors, including an individual’s educational background, prior work experience, career goals, and the opportunities available.

Your main journey starts after passing your 12 exams. Then four years to complete a bachelor’s and two years to complete a master’s. But if you want to go for a doctorate that may take another 3 to 6 years. You can take some short online or offline courses which may take a few months.

Qualification Requirements for an Investment Banker

In order to succeed in investment banking as a career in India, one must possess an in-depth understanding. To become an investment banker, you need a combination of education, skills, and experience. The following are some of the most common qualifications for becoming an investment banker.

  • Educational Qualification

A bachelor’s in finance, economics, accounting, business administration, or a related field is a must for an entry-level job in investment banking. But to have a higher position you need a master’s or doctoral degree in related subjects.

  • Mathematics

Mathematics is the base of investment though mathematics is not easy and handy for everyone. It is easy for one with a good understanding of mathematics. As mathematical formulas are difficult analysts need to understand them to perform the required task.

  • Performing research and understanding financial modeling

Researching is mandatory to find out about this fast-changing industry. Besides, an understanding of financial modeling and working from scratch is another quality they look for. The investment industry is totally dependent on financial models. They work on modeling all day long.

  • Financial knowledge and skills

Understanding finance theory and using finance tools are other basic requirements for an investment banking job.

 

  • Powerpoint and excel

Experience working in PowerPoint and Excel is a very basic qualification an investment banker needs. This helps them to work with data and make graphs.

  • Professional certificate

A professional certification, such as the CFA or CIBA, enriches a candidate’s chances of getting hired.

  • License

License is not mandatory for all jobs but some job positions such as investment banking representative positions may require a license.

  • Teamwork and communication

Teamwork and communication are very basic qualities to get any job. In the case of investment banking a big team work to ensure things. To bring the best teamwork is a must. On the other hand, to manage and convince clients good communication skills have no alternative.

  • Understanding of ethics and compliance

Understanding laws and regulations that apply to investment is another subject need to know as an investment banker.

Additionally, smart decision-making, confident, outgoing, and building relationships with extremely rich people will make him successful faster.

Investment Banker’s Salary

The Indian economy continues to grow, attracting talent who enjoy fast-paced environments to the field of investment banking as a career in India. The salary of an investment banker depends on many factors such as skills, experience, company, and location.

Salary also depends on experience, qualifications, the size and reputation of the firm, and the specific role within investment banking. Performance-based bonuses are often included in investment banking salaries, which can greatly increase their total compensation.

Salary of an investment banker according to qualification:

QualificationAverage annual salary
Certificate courses3.26 L
Diploma & PG Diploma Degree5.51 L
Undergraduate Degree8.10 L
Postgraduate Degree15.87 L

 

Salary of an investment banker according to experience:

ExperienceAverage annual salary
0–1 year (investment banker)610419 INR
1-4 years  (entry-level)800000 INR
5-9 years  (mid-level)1548529 INR
10-19 years ( senior mid-level)2947906 INR
20 or more years (senior–level)4150000 INR

 

The compensation structure in investment banking is also performance-driven, so top performers can earn more bonus money and earn a greater salary. In addition, the firm may also offer health insurance, retirement plans, and other benefits.

FAQs

Here are some frequently asked questions about investment banking as a career in India.

1. Is investment banking a good career in India?

In the financial sector, Investment Banking is an excellent career path. It offers competitive pay, job security, exciting clients, and bonuses. but in this sector success comes after hard work. Choosing investment banking as a career in India offers professionals the opportunity to work on high-profile deals, collaborate with industry leaders, and shape the country’s financial landscape.

2. Are investment bankers paid well in India?

Yes, investment bankers are paid well in India but it also depends on some factors like degree, result, use of tools, communication, and more. Here freshers earn between Rs 4-6 lacs per annum. With experience, salary increases so an investment banker in India for a professional with 5-10 years of experience earns between 15-30 lacs. While with 10 to 20 years of experience, an investment banker can earn around 30-40 lacs.

3. Which degree is best for investment banking?

In most investment banks, entry-level jobs require a college degree in finance or economics. A common educational background is in accounting and business.

4. What are the Big 4 investment banks?

The big four are JPMorgan, Goldman Sachs, Citigroup, and Morgan Stanley. Deutsche Bank, Barclays, Credit Suisse, and UBS are among other global giants following close behind. They made investment banking as a career in India cherishable.

5. Which city in India is best for investment banking?

Mumbai is currently the best city in India for Investment Bankers, with an average income above Rs. 18 lakhs per annum.

Conclusion

Investment banking as a career in India has emerged as a sought-after career. A range of investment banking services facilitates the efficient functioning of capital markets, which plays an important role in the global financial system. Financial institutions offer companies and investors a bridge to the capital markets, facilitating economic growth and capital formation. In India, the number of investment banks is increasing and investment bankers are performing a range of responsibilities. Salary is satisfactory in this sector. So, investment banking as a career in India is a hot cake now.

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