Many banks launched their department in investment in the 19th century. Even though European banks established their sector in 1993, the State Bank of India in the 1970s started its merchant banking agency, and after that, ICICI started expanding its roots in Investment Banks in India. We all have very well heard and read in newspapers and news channels that a businessman invested in this particular sector, certain crores of a business deal took place, and someone borrowed crores to build a certain thing. Every transaction we hear about takes place with the help of investment banks. So, Before we all dive into the further classification of investment banks. Let’s just see if we all are familiar with Investment Banks.
What is an Investment Bank?
As you scroll down the internet, you’ll probably find hundreds of definitions of investment banks but basically, an Investment bank is a financial institution or a branch of a bank that helps people, businesses, and the government in funding capital. They are the primary body that collaborates with commercial banks and decides the market interest rates.
Major cities such as Mumbai, Delhi, Hyderabad, and Bangalore is their hub. Investment banks are in high demand and are a great career option. They gained popularity after the FDI increased rates in India.
Divisions of Investment Banks in India
There are three divisions of Investment Banks in India front office, middle office, and back office.
- Front Office: It is the most prominent department in all three categories. They directly deal with the customers and provide the right financial aid or product. Fact: Most active revenue is generated by this department.
- Middle office: This deals with all the fundraising, risk management, and systematic calculation of profit and losses.
- Back office: This department is in charge of all the day-to-day operations and technology. They verify data from previous trades and in-house software technology helps build a sustainable flow of daily operations.
What Exactly Do These Investment Banks Do?
These banks act as strong support in the investment market for their clients, but they majorly work to undermine the possibility of any forfeiture or depletion of capital. They work with a systematic system primarily it is about understanding the objective, industry, long-term-short-term vision, etc. After analyzing all these factors, they work on a specific strategy to allocate the investor’s money.
As the name suggests, the key role is to establish a secure connection between the client and the bank. They work as an intermediary between corporations and financial markets and assist in raising capital and acquisition.
The research department deals with the division that reviews companies and writes reports according to their prospects. It does not necessarily generate revenue on the front line but it certainly assists its traders and sales department. These tools often use to attract outside clients and corporates.
Arranging Private placement
Private placements are another crucial method to raise capital rather than investing in stock or bond markets. In such cases, The bank must attain proper knowledge and credibility in the market and must acquire a dominating presence and competitive wisdom toward their peers.
In this way, you can quickly sell an entire offering to a single investor without the need to knock doors of individual investors. The government considers institutional investors to be more sophisticated than individual investors, so they levy some regulations for private placements.
Types of Investment Banks
Four types of Investment Banks in India and internationally.
- Regional boutique investment bank:
These banks are smaller and limited in geographical location. They serve local areas more likely because their target audience is small and medium-scale businesses. The general deal size of regional boutique investment banks is 10 million.
- Elite boutique investment bank:
Elite boutiques are officially referred to as “Independent Advisors”, as they offer a full range of services. It runs on the concepts of old-school banking. They focus preciously on M&A transactions, restructuring the business, organizing banking deals, and advising clients on strategic decisions. Their deal size is often recognized with the range above 1 Billion.
● Full-service or Bulge Bracket Investment Bank:
These are basically the top-of-the-chain banks. They deal with every aspect and every corner of investment banking—dealings like buying and selling, M&A securities, financial advisory, research, etc. The bulge-bracket bank usually caters to large institutions, corporations, and governments. Some widely recognized bank under this category is Goldman Sachs, Morgan Stanley, and Credit Suisse. The deal size is also above 1 billion.
● Middle Market Investment Bank:
The name speaks for itself they are quite larger than the regional boutique banks but not as large as the bulge bracket banks. Middle-market banks’ services are pretty much the same as others, they offer raising debt, and equity capital, as well as mergers and acquisitions. The transactions in these banks range between 10 million to 500 million.
Top 10 Investment Banks in India
1. Avendus Capital
- Avendus Capital is an esteemed organization in the investment market and tops the list of Investment Banks in India. It was established in the year 1999 with the vision of delivering imperishable investment solutions.
- They work under asset management, credit transactions, wealth management, and investment banking.
- The CEO of avendus Capital is “Puneet shivam”. A US-based man with a crisp grip of 17 years of experience in finance and consulting services.
- Avendus Capital is headquartered in Mumbai, Maharashtra. Their footprints are in 11 different cities and 4 different countries. APCL is rocketing with its lending business with over 900 crores and wealth management business with over 23000 crores.
- In 2015, APCL bagged a glorious investment Bank of the Year – Private Equity award at VCCircle awards.
2. Edelweiss Financial Services
- Edelweiss finance group came into existence in the year 1995 and right after stepping up in the market, they brought competition. It is an accredited company considered a pioneer in the market without this the list of Investment Bank in India is incomplete.
- The chairman of Edelweiss finance group is ‘Rakesh Shah’. Three-decade experience finally paid off as this prolific man with eye-rolling professionalism in the financial market.
- Edelweiss Group is known for investment & advisory services, asset management, portfolio management, wholesale financing services, etc.
- Headquartered in Mumbai, Maharashtra with its a global presence more or less all over the world. This company dominates the market with a revenue of over 1300 crores and a net profit of over 900 crores.
- The company builds a fortune in the market with prestigious awards like the Finnoviti Awards 2020 for Top 25 financial innovation of India, Best Customer Experience Team of the Year 2020, and Best Broker of India by Finance Asia Country Awards 2020.
3. JM Financial Institutions Securities
- JM Financial is profoundly known for its asset, wealth, credit, and brokerage management. The company earned a valuable reputation in investment banking. It was founded in 1998 to serve the purpose of asset allocation.
- A man who gifted four decades of his life to the Indian capital market and made innumerable contributions to the capital market is the chairman of JM Financial. The company is a flagship listed company. It runs by a group and the chairman of the group is ‘Nimesh Kampani’.
- The company is diversely engaged in many sectors such as Investment Bank, catering to Institutional, Corporate, Government, and Ultra High Networth clients, Mortgage Lending both wholesale mortgage lending and retail mortgage lending, asset, and credit management.
- The company’s head office is in Mumbai, Maharashtra. Even in the competitive market company shaped its place in the form of awards such as the BSE Awards 2020 for the top performer in the primary segment.
4. Axis Capital Limited
- Axis Capital Limited is a subsidiary company of Axis Bank. It came into existence in the year 2005. Axis Bank builds this subsidiary to ensure the company understands and provides this facility in its domain rather than subletting clients to competitors and establishing its image among Investment Banks in India.
- ‘Amitabh Chaudhary’ the managing director and chairperson of Axis Bank is also associated with Axis Capital. Amitabh started his career in 1987 with “Bank of America”. He has had a long exposure in the corporate world. In his presence, HDFC Life, Infosys, etc shine brighter than ever.
- Axis Capital deals with insurance services like, property professional lines, marine, energy, etc. The company’s main business is equity capital markets and structured finance.
- The company has been awarded numerous awards such as The British Insurance Award, The Insurance Business UK Top Employer, Cigna Wellbeing Award, Forbes 2023 America’s Best Midsize Employers, and many more.
5. ICICI Securities Limited
- ICICI Securities is a subsidiary of ICICI Bank they have been in business since 1995. The company has attained a strong foot position in the Investment Banks in India considering its long journey of more than 25 years.
- ICICI Securities is a well-organized Indian brand catering to investment banking, institutional broking, retail broking, wealth management, and financial product distribution.
- ‘Mr. Vijay Chandok’ is the man behind the consistent growth of ICICI securities. The relationship between ICICI and Mr. Chandok is over 25 years. His service brought prestige to the organization over the years.
- The company stands in the market with total revenue of over 3000 crores and as for the profit the company proved to be consistently generating profit over 5 years.
- In the years of rigorous work, ICICI achieved many milestones some of them are as follows: Business Icon of India 2022 – Mr. Vijay Chandok, Best Wealth Management Platform of the year 2022, Best Private Bank for Self Directed Investment in 2021.
6. Barclays Bank
- Barclays is older than the history of the banks and they play an important role in the history of the Investment Banks of India too. It was founded in 1690 in London, UK. In its early years, it was established to function around London, but after decades, it gained popularity in the banking business. Now, It is well-known as one of the biggest multinational banks all over the world.
- Its international exposure is in Investment banking, financial, and risk management services to large companies, institutional, and government clients.
- Barclays CEO ‘C.S. Venkatkrihshna’ is a self-informed name in the market. Before he took the pledge at Barclays in 2016. He worked at JP Morgan Chase for over two decades as Chief Investing Officer. ‘Venkatkrishna’ is well known for his proficient skills in asset and risk management.
- In India, Its H.Q. is in Mumbai, Maharashtra. Its presence is currently in Delhi and Chennai. The company is celebrated worldwide for its financial services.
- People’s Choice Award 2022, Award for Excellence in 2022 for Best Investment Bank in the United Kingdom, and Best Investment Bank in Western Europe by Euromoney Awards, etc.
7. Bank of America
- Bank of America is a multinational bank as it is renowned in the world for its financial and investment services, It was recently re-named BOFA Securities. BOA started its operation and services in the year 1998 since then it is constantly approaching greater heights.
- Since the dawn of a new CEO ‘Brian Moynihan’ in 2010, the company has surged in better and more explicit services in finance and investment. Moynihan shaped the organization differently as he participated in different forums and market trends such as World Economic Forum’s International Business Council, the Financial Services Forum, the Bank Policy Institute, and the Business Roundtable
- BOA caters to a broad spectrum of services like asset, wealth, investment, and portfolio management services. They also offer business solutions to Small businesses, Mid-sized businesses, Middle-market companies, Large corporations, and Institutional investors.
- The company is currently located in North Carolina, the United States, and India its increasing presence in Banglore, Mumbai, Delhi, and Chennai.
- BOA is rewarded with numerous awards and recognition such as Auto Finance Excellence Award, Best International Investment Bank in India by FinanceAsia, Best International Transaction Bank by The Asian Banker, etc.
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8. JP Morgan Chase
- In 2000, J.P. Morgan Chase was built in the land of America. It is one of the biggest multinational banks in the world and is considered the most dominating bank in the domain of market capitalization. The company owns other subsidiaries such as Chase Bank, J.P. Morgan asset management, Morgan Health, and J.P. Morgan equity holding Inc.
- CEO ‘Jamie Dimon’ is the heart and soul of J.P. Morgan. Dimon is a remarkably competitive man with decades of expertise in the financial world gave him quite a few stories for the younger students. Before making his way to J.P. Morgan he worked with American Express, The Travellers Incorporation, Smith Barney Incorporation, etc.
- In the initial period, The company was just offering commercial banking. As the clock turned they began to expand their roots in investment banking. As of now, the company proposes a wide range of services such as Investment banking, Wealth management, Credit cards, Mortgage, Personal Banking, Payment Processing, Institutional & government clients, etc.
- P. Morgan has footprints all over the world, Its current headquarter in India is situated in Mumbai, Maharashtra. Market capitalization is the area in which the company dominates the world’s peers with total revenue of $128 Billion and financial service assets amounting to more than $ 3 Trillion.
9. Citi Bank
- Citi Group is also an American investment and financial service company situated in New York. The merger of Banking giant Citi Group and financial corporation The Travellers Group in 1998. Citi Group is among the top 4 investment banks in the United States and is now one of the top 10 listings of Investment Banks in India. These long-chain banks like Morgan Chase, Bank of America, and Citi Group are considered too big to fail.
- ‘Jane Fraser’ is the first female CEO in the company’s history. A woman reigning with wisdom and skills ruled over the world with her admiring presence and years of hard work raising the bar to the top level. “Leading a global bank with millions of customers, Institutions, and businesses across 160 countries”, she created a new zone of standards and motivation for women all over the world. She worked with Goldman Sachs, and Asesores Bursatiles before sharing her wisdom with Citi Bank.
- Citi Group is one of the biggest investment banks in the world and leads to a broad range of services like Banking, Lending, Credit Cards, Wealth Management, Security brokerage, etc.
- The company’s time and expertise brought numerous esteemed awards namely America’s Most Reputable Company by Newsweek, Excellence in Leadership by EuroMoney, The Most Powerful Women in Banking and Finance by The American Banker, and many more.
10. Credit Suisse
- Credit Suisse is known for its strict policies and banking secrecy towards its clients and corporations. That is one of the many reasons they choose fewer developed countries for their products&services and now they are an integral part of Investment Banks in India. It was formed in 1856 in Zurich, Switzerland. It was initially designed to fund the Switzerland and European rail system. It was the 1900s when they first explored retail and other banking.
- The company is excruciatingly typical towards clients and countries so they offer limited service that includes Investment, Private Equity, Shared, Asset Management, and Research Services.
- CEO of Credit Suisse ‘Ulrich Korner’ is a German and Swiss citizen. Asset Management and Strategy development as his key skills joined Credit Suisse in 2022. Before this, he was a Board executive member of UBS for eleven years and shared asset division for six years. His skills and leadership lead to aboard more than 45,000 employees toward a better and brighter future.
- Credit Suisse was accredited with several awards including Best International Private Bank by The Asian Banker 2023, Best Private Bank- FXAdvisory 2023, Best for Family Offices in Asia by Asia Money Awards 2022, and many more in the list.
Frequently Asked Questions
Q1. What is the basic salary of a job seeker in Investment Banks?
The basic package depends upon some common factors like college, country, specialization, experience, etc but to answer it in general if all the above things proceed as mentioned. You can assume a package of around 7 lacks per annum in India and around $70k internationally.
Q2. What is the job of an aspirant in Investment Banks?
Investment banker serves pretty much everything in their domain from raising capital to allocating asset. They make informed decisions for clients like institutions, corporates, etc. They are also skilled in wealth and risk management to provide effortless services to clients.
Q3. Is investment banking in India a good career?
Investment banking is an attractive career choice if you are passionate about finance and are diligent in the tough grind but it is worth the work as investment companies pay top-notch salaries. Moreover, Investment bankers earn great respect in the market that can be influential to build new relations in the finance market.
Q4. What are the skills you need to become a Pro in Investment Banks?
There are categories of skills required to become an influential Investment Banker in India, Communication skills, Research & Analytics, Advance knowledge of regulations and Securities, Effective presentation skills, Team oriented, and being friendly in a fast-paced environment.
In today’s world, Investment Banking is an integrated part of any Individual, Institution, Corporation, and Government client. It helps in building a sustainable structure to allocate your financial assets. In the listing, as mentioned above are the top 10 Investment Banks of India that are currently fulfilling the needs of millions of customers and institutions. Investment Banks play a crucial role in any multi-national company that encounters a financial crisis and seeks comfort in the long-term allocation of assets.
The foremost aspect is understanding that Investment Banks in India or around the world are pivotal for an organization because they can underwrite new debts, provide equity security, and manage risk which in turn helps them to mend their organization and private clients. And it is essential to keep in mind that these banks assist the growth of a country meanwhile helping corporates raise and managing capital.
There are multiple ways for Investment Banks in India to earn money. Some are as follows, Interest on loans, commissions, Interest on Investments, Brokerage, and Underwriting services, Mergers and acquisitions, Creating Collateralized Products, Proprietary Trading, Dark Pools, etc. In other words, there are innumerable ways for a bank to make a marginal profit. Investment Banks in India or any other country is a topic of research and extreme comprehension that might take a lot of your precious time. So, Let the above article guide you and give you a basic concept of Investment Banking for you to learn and research further later.