Investment banking, also known as IB, is one of the most popular and lucrative careers among all financial services jobs in India. As the economy continues to grow and the M&A India sector breaks new records daily, the demand for talented investment banking (IB) analysts continues to increase dramatically across India.
In this comprehensive guide, we will outline everything you need to know about how to start your career as an Investment Banker (IB) in India and the various elements that contribute to obtaining a position at one of the Top Investment banks in India.
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What is Investment Banking (IB)?
As with most types of banking, there are defined roles and responsibilities for all IB professionals. IB is mainly recognised as providing financial consulting services to corporations, other businesses and even governments. This contrasts with the traditional definition of a Commercial or Retail Bank (which focuses on accepting bank deposits from customers and funding bank loans) and has evolved to become a bridge between large companies needing additional sources of financing and individuals seeking to invest their money in these same companies.
Investment banks typically help clients raise money by managing complex transactions. There are several key segments within IB.
What Does an Investment Banker Do?
The typical work of a Bank Analyst or Associate in the IB Field is fast-paced, highly analytical and requires an analytical mindset. The entry-level position of Bank Analyst (or Associate) is no different from being an Investment Banking Analyst (IB Analyst).
Core Responsibilities
Financial Modeling & Valuation: The Core Responsibilities of a Financial Modelling & Valuation Analyst include the building and maintenance of complex financial models (typically created in Microsoft Excel) that are utilized in predicting a company's anticipated future performance and determining the company's intrinsic value, such as when determining the value of a company in conjunction with the merger & acquisition process and in connection with how an investor would value the company when considering a potential initial public offering (IPO).
Creating Pitch Books: A Pitch Book is a presentation (typically created in Microsoft PowerPoint) which is used to communicate the merits of a potential transaction or service offering to a prospective client. The Pitch Book is the sales-oriented portion of the role.
Due Diligence: As part of an M&A transaction, an Analyst is responsible for completing a thorough review of the target company's books, records, operations, and market position.
Transaction Execution: An Investment Banking Analyst is responsible for managing the transaction process from start to finish, coordinating with the legal and accounting teams and the senior management, to ensure a successful completion of the transaction.
Investors should read our guide titled "How To Analyse A Company's Balance Sheet" to gain an insight into how to effectively and efficiently evaluate the strength of a company's financial statements.
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How to Become an Investment Banker?
A career in Investment Banking requires the ideal combination of education, expertise (or specialisation), experience, and networking.
1. The Educational Foundation
Having an excellent academic background, especially from a premier educational institution, will provide candidates with an opportunity to apply for and secure the best Investment Banking jobs in India.
Typically, undergraduate degrees that provide a foundation for a career in Investment Banking include finance, economics, commerce, and engineering (particularly from one of the best IITs or NITs).
Graduate Studies/MBA: A Graduate Degree/MBA from an accredited Tier One Indian Business School, such as IIMs, ISB, FMS, etc., or from a highly reputable international University, will enable you to experience a fast track into the investment banks, in addition to reaching an investment bank manager level. Most professionals working in the investment management field have completed graduate studies as their primary means of gaining an entry-level position as an Associate.
Professional Designations:
CFA (Chartered Financial Analyst): The CFA is a globally recognised designation that demonstrates a candidate's proficiency in Valuation, Portfolio Management, and Financial Analysis, and enables a candidate to become a highly in-demand candidate for employment in Investment Banking.
NISM Certification: In addition to the world-renowned CFA designation, the National Institute of Securities Markets (NISM) Certification will exhibit your commitment to understanding and being familiar with the regulatory and market structure of the Indian financial markets.
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2. Developing The Investment Banking Skillset
The opportunity to work for an Investment Bank requires more than just theoretical knowledge; the position's requirements also require the applicant to possess advanced technical and practical skills.
3. Securing The Entry Point
Most entry-level investment financial management professionals begin their careers in Investment Banking by entering into an Analyst Program.
Internships: Interning at a Bank's Investment Banking Division, at a boutique advisory firm, or with a Private Equity/Venture Capital firm will be the most significant consideration when it comes to obtaining an entry-level investment analyst position, as it is highly common for top-tier firms to convert successful intern analysts into full-time employees.
Target Firms: Your focus should be on both the global "Bulge Bracket" banks and the strong domestic players.
Networking: Networking is Very Important to the Industry. Make Connections with Alumni and Professionals on sites, such as LinkedIn, and Encourage You to do informational Interviews with alumni or professionals from your target firms and ask for mentorship.
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4. Career Progression and Investment Banking Salary in India
The career track is a Structured and Rigorous Career path, but the compensation and rewards for working in Investment Banking India are Highly Competitive and financially lucrative.
Analyst 0-3 Years of Experience in Technical execution of (modelling, research, presentation).
Typical Salary (Total Comp): Rs. 10 Lakh to Rs. 25 Lakh+ per annum (highly dependent on firm tier and bonus).
Associate 3-5 Years of Experience, Manages Analysts and takes greater responsibility for Deal Execution. Promotion from Analyst or directly into this role from a Top 10 MBA Program.
Vice President or VP 5-8 Years experience; Manages portfolio of Client Relationships, Leads Transaction Teams.
Managing Director, More than 10 years of experience, Senior Level Position, Focuses on the origination (finding/closing) of new Client Deals.
Conclusion
The journey of building a Successful Investment Banking Career in India is a Marathon, NOT a Sprint; it is a purposeful and relentless Pursuit of Excellence in Academics, Deep Mastery of finance and modelling, and the Mental fortitude to thrive in a highly energetic Environment. If you have an intense interest in High-stakes Finance, Global Transactions, and an Unmatched Learning Curve, then this path provides you with one of the most intellectually challenging and financially rewarding Careers in the Country!
Your journey starts with acquiring the right skills and targeting the firms where you can make the biggest impact.
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