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16 April 2018

Investment Banking in India

Over the years, India has worked hard enough to earn a spot in the world map of business creating many business opportunities for its citizens and for foreign investors as well. The investors have in turn overturned the whole business model from its intermittent fluctuations to what we know it to be today. Investment Banking is therefore not a new term for Indians; it has become a way of life.

To understand the whole concept, we need to first of all define it, and elaborately understand its role in business. Investment Banking refers to a private company which helps to raise funds for organizations, governments, companies and other business entities by underwriting the client’s securities in obtaining a debt, sale of securities and also facilitate mergers and acquisitions as well as give information to issuers about the same.

In India, investment banking traces back in the 19th century after trading houses were established by merchant banks. The State Bank of India was among the very first ones in the business and ICICI therefore started offering merchant banking services for the first time. Progressively, these banks started to flock in the market, with the numbers rising to more than 30 in the 1980s. Things took a different drift as over a thousand and five hundred merchant banks registered with the Security and Exchange Board of India in the 1990s.

The AIBI’s role was ensuring that ethical and legal practices are adhered to by member institutions. Some of them include Axis Capital limited, Bnp Paribas, Central Bank of India, LIFL Holdongs limited, Jeferries India Pvt Limited, and the list goes on and on.

To get a job in the industry nowadays is not easy; there are so many competitive applicants than the number of new hires in the industry. Elaborate steps are set in place which will guarantee you an appearance before the panel of interviewers on investment banking. This may include talking to your career center and asking them to introduce you to an alumni maybe who works at investment banks you are targeting. You can also make good use of LinkedIn to find connections to bankers you may want to connect with.

Another very critical step is to fully understand the whole process of the interview. The process is highly structured and it is important to know what to expect beforehand. It serves as added advantage. A question of what questions to expect always comes up and more often than not, they will revolve around the GDP growth rates and their expected change in the future, some of the macroeconomic indicators and inflation rates. They also assume that you are conversant with what is happening in the market and some views from domestic and international banks on the same.

Front office jobs in this business model are not as much since these banks operate on KPO-style and back-office. Especially for undergraduates, back-office jobs are most common than front office IB jobs. For those in top universities, winning a spot in the consulting jobs is easy as a students within the range of 100-150 are absorbed from the IITs.