Boom time for investment bankers
A booming capital market, flood of foreign investment, frantic mergers and acquisition activity and indigenous corporates targeting foreign takeovers have made investment banking a hot new career
Even India’s modest two-steps-forward-one-step-back economic liberalisation initiatives of the past two decades have transformed the nation into the second fastest growing economy worldwide. A booming capital market, a flood of foreign investment, frantic mergers and acquisition activity and indigenous corporates targeting foreign takeovers have made investment banking a hot new career option for youth with big numbers, corporate funding and restructuring on their mind.An investment banker transacts with corporates providing advisory financial services in connection with the issue of new securities for raising finance for takeovers, mergers and acquisitions. He/ she also manages share portfolios, capital market operations of companies and often the wealth management of valued corporate clients.
A postgraduate diploma in business management with specialisation in finance or chartered or cost accountancy qualifications are ideal, but graduates with a strong financial background could also have the red carpet rolled out for them. The banking and finance sector is currently facing an acute shortage of talent, hence everyone with a background in finance and/ or sound analysis and mathematical skills can get a break in this profession.
Opportunities are also multiplying for investment bankers in mutual funds, brokerage firms, insurance companies, merchant banks and other financial institutions. However, an investment banker should possess strong inter-personal communication and sales skills and most importantly, must have the stamina to work long hours. Investment bankers also need to develop a sound knowledge of the business world and awareness of corporate developments.
An investment banker usually starts her career as an analyst writing reports, maintaining spreadsheets, trading stock options, doing research etc. As she scales the ladder she begins advising companies on capital formation, mergers, acquisitions, investment options, managing capital assets, liaising with government and financial institutions.
Apart from the glamour and variety of work, it’s big bucks which are the charm of this profession. The starting salary of analysts is Rs.5 lakh per annum or thereabouts. And after a few years’ experience, an investment banker usually moves into the Rs.10 lakh per annum (plus bonuses) bracket, depending upon the size of the employer company. Recently mint-fresh IIM graduates were snapped up by foreign banks with pay packages of Rs.1 crore per year.
"With the stockmarket experiencing an unprecedented boom and a lot of money being invested in equities and equity-related funds, investment bankers who can provide intelligent advice and project market trends are in great demand, and investment banking has become a preferred career option," avers Sangeetha Sanghvi, the Mumbai-based vice-president of Centrum Capital Ltd, one of India’s top NBFCs (non-banking finance companies) which is listed on the Bombay Stock Exchange.
A commerce graduate of Mumbai’s HR College, Sanghvi began her career in 1985 as a salesperson of Brother Business Machines. In 1991 she signed up with Jamnadas Morarjee & Co to market fixed deposits and other financial products. However she simultaneously pursued her management studies at the Narsee Monjee Institute of Management Studies, Bombay from where she acquired her MBA in 1994. With a career in finance on her mind, in 1995 she joined the Nagarjuna Group, an investment company as assistant manager where she acquired hands-on training in managing public issues. Four years later after she was promoted to manager, she left the company and took a sabbatical. In 2003 she signed up with Centrum Capital, where she has risen to vice president.
"Centrum Capital helps its clients and corporates raise project and equity finance and provides merger and acquisition advisory services. In recent years our focus has been on advising SMEs (small and medium enterprises) on ways and means to enter the big league," says Sanghvi.
Since she started her career as a salesperson in the field in 1985, Sanghvi has come a long way and she clearly revels in her new vocation of investment banking. "With each client we acquire knowledge of totally different industries — cement, steel, automobiles, media. Therefore it’s a continuous learning and growth experience, for which one is very well remunerated. Quite literally we have the opportunity to transform the landscape of the nation and benefit hundreds of millions of lives," says Sanghvi enthusiastically.So for youth with analytical, numbers crunching, monetary mindsets, a career in investment banking offers a unique opportunity to combine business development with the excitement inherent in the country’s active money markets.
Indra Gidwani (Mumbai)