One of the most lucrative and prestigious career choices for a finance student is investment banking. COVID-19 has resulted in job loss and job insecurity for the majority of the professionals.
But the investment banking career is one of those careers that has seen significant growth. The demand for investment bankers in India is higher than in the rest of the world.
Notably, in the last few years, the demand for investment bankers has increased dramatically. The new joiners in the investment banking field can expect a six-digit salary.
Businesses, institutes, and even government institutions hire investment bankers to discover new ways to generate capital for them.
The average base salary of an investment banker in India is 11LPA approx. You can watch this video to understand the basics of investment banking.
What is the primary role of an Investment Banker?
The fundamental role of the investment banker is to support governmental and non-governmental institutions to uncover various means to generate capital and provide them with financial consultation as and when needed.
The financial industry has always been one of the highly prolific industries for its employees, and investment banking is the glitter of these awards.
Investment bankers bridge the gap between investors who have the funds and are looking for investment opportunities and organizations that are raising funds.
The highlights of the job of an investment banker
- Analyzing an organization's financial information/data to predict current financial status and potential growth.
- Formulating strategies to achieve the organization’s financial goals.
Functions Performed By An Investment Banker
An investment banker performs the following functions:
- Portfolio Manager: Helps the company manage and diversify its portfolio of assets.
The investment decisions are always based on the suggestion of the investment banker, as they understand the company policy and its finance. - Financial planning and analysis manager: An investment banker uses their intellectual charm over numbers (the financial figures) of the company, analyzes the anomalies, and formulates strategies needed to make effective use of existing financial resources to multiply them.
- Corporate development: As a corporate developer, the investment banker works to smoothen the process of mergers and acquisitions, acts as a helping hand in its capital raising operations, and makes them in line with the company’s vision and mission.
Skills required to become an investment banker in India
Investment banking is a highly skill-based career option. Employers seek a specific skill set while recruiting investment bankers.
It is so because, to survive in the highly competent and risky environment of finance and financial marketers, a candidate must have knowledge of and skills to fight against the financial uncertainties.
Some skills every investment banker must have are as follows:
- Analytical Skills: An investment banker, in his whole working period, has to deal with numbers, data, and complex financial reports.
Hence, analytical skills become an essential part of an investment banking career. Analytics is an inseparable part of the banking and finance sector.
The day-to-day tasks of an investment banker are analyzing and maintaining the existing data, maintaining projects, and meeting the requirements of all clients are impossible with excellent analytical skills. - Communication Skills: The fundamental part of an investment banking job is explaining the financial findings and information to the right set of clients and bosses.
Hence, an employee must have excellent communication skills to communicate complex financial information like IPOs and stock market to clients in an easy manner.
Strong communication skills allow you to gain a competitive edge over other candidates. - Innovative mind: The one thing high-paying recruiters look for in a candidate is innovative ideas and a fresh perspective.
An ideal candidate for this role has new insights, a competitive outlook, and a creative mind to ascertain the creative and unique means to grow. - Resilience: It will not be incorrect to say that the working atmosphere for investment bankers is high-pressure and challenging.
Hence, resilience is the skill every candidate must possess. Without high resilience, the long working hours, tight deadlines, and unpredictable financial market are not a child’s play to deal with without high resilience.
Ideal Qualification of an Investment Banker
- A bachelor's degree in finance is required to start working as an investment banker. However, due to the technicalities and advanced financial complexities, recruiters look for a candidate with a master’s degree, that is, MBA in finance.
- Although, the entry-level positions can be secure with just a master’s degree. However, to move to a senior position, an MBA degree is essential.
We suggest starting first doing MBA with a major in finance to start your career as an investment banker.
Career Hierarchy of Investment Banker
Career growth for an investment banker has a strict and standard hierarchy. One cannot jump one or two levels of hierarchy while working as an investment banker.
The beginner position in the investment banking career arena is called analyst. And the ranking goes upwards with these job positions;
- Associate
- Vice President
- senior vice president
- managing director
The name of the job positions may vary from institution to institution. However, the above stated is the most common investment banking career hierarchy.
What is the Average Investment Banker Salary in India?
The average salary of an investment banker in India is 11LPA and can be increased to 85LPA with experience in this domain.
For a candidate just starting his career as an investment banker, the average package may be somewhere in between 4 and 7 LPA.
Nevertheless, some companies hire professionals with no experience at a higher package based on the educational level, university/college reputation, and internships.
The last few years have seen a dramatic rise in the investment banker salary, owing to the higher interest of companies in building robust and reliable sources of revenue.
In India, investment banking has become one of the highest-paying and secure career options for finance students.
Some scholars even call investment banking a sought-after and rapidly growing profession in the Indian Financial industry.
This profession has seen a growth of 10.8% in salary, compared with the last year. And with this, the salary range has increased to 8.5 million per year.
Investment Banker Salary: Experience Wise
The experience level is divided into three categories; Fresher, Mid-level, and Senior Level, and the salary differs for each experience level.
Investment banking is considered a highly lucrative and well-organized job arena for finance graduate jobseekers.
Nevertheless, the reality is a higher package comes to those with higher experience and knowledge.
As you gain experience in this field and understand the industry and its working clearly, your worth will be visible to the banks and companies, and they might offer you a higher package.
Check below to know the salary range for different levels of experience.
- Freshers: 0-1 year of experience
Candidates with 0 to 1 year of experience fall under this category and are called freshers. A fresher may have work experience through an internship(s) or a complete fresher.
However, the salary range may differ for them. Such professionals can bag a package of 5 to 8 Lakhs per annum. - Mid-Level: 1-4 years of experience
Candidates with 1 to 4 years of experience are at mid-level of experience and can claim a yearly package of 8 to 10 lakhs INR.
Personals with 5 to 9 years are also classified under mid-level experienced professionals. However, they can bag a higher package of 15 to 20 LPA easily. - Senior Level: 10 and more years of experience
A person with 10 to 19 years of experience can easily claim the yearly package of 30 LPA. The professionals with more than ten years of experience are the senior-level investment bankers and generally lead the team of junior investment bankers.
Working professionals with more than 19 years of experience can earn more than 40 LPA in India easily.
Factors Affecting the Average Investment Banker Salary in India
Every industry has some factors that recruiters take into consideration while finalizing the salary of the candidate.
Even though the salary of the investment banker is considerably higher than other professions, a thorough understanding of the factors that affect the salary would help you set the ideal expected salary for yourself.
The primary factors that influence the salary of the investment banker in India are as follows:
- Skills
- Location
- Experience
- Organization
- Skills
How skilled a person directly affects his/her salary as an investment banker. The right set of skills would not only help you gain a competitive edge over your competitors, but it will also provide you with a much higher package and job security.
Investment management, financial modeling, and financial analysis are the most popular and high-paying skills for an investment banker.
However, Microsoft Excel is the specific skill that helps you earn more than 80% of your competitors.
Apart from these skills, to gain a higher package than other candidates, you must learn merger and acquisition skills.
Skills are the factor that directly affects the salary of a professional investment banker, and you can control them. - Experience
Expertise and knowledge come with experience and experience gifts salary hike. The more experience you achieve, the more you earn.
The cherry on the cake is that you can win considerable growth in salary with just a few years of experience in the investment banking career.
With just one to four years of experience, you can earn 25% more than the average salary. Speaking about the mid-level experience.
A person with this level can make 80% more than the average pay in this industry. The highlight of this industry is the experience. - Location
Every industry has a different cost of living, and as a result, the salary range for individuals in all industries differs from city to city.
However, when it comes to an investment banking career, the demand for investment bankers together with the cost of living affects the salary of an investment banking professional.
In India, Mumbai is the city that pays the highest salary to investment bankers. Statistics tell a no different story, as the salary of an investment banker for the said level of experience in Mumbai is 84% higher than in the rest of the country.
The second and third most favorable place for investment bankers is Pune and New Delhi, respectively.
Whereas Chennai, Bangalore, and Hyderabad are some cities that provide the lowest salaries to investment bankers. - Organization
Your employer and their image in the market have a higher impact on how much salary you can demand after completing a certain period with them.
Also, while choosing the employer, you must not entirely focus on the salary, as you must also consider the culture, insurance, sick leave, and the company's concern for its employees’ physical and mental health.
The Top Employers of Investment Bankers
Every industry has prominent employers that hold the place of dream employers/companies for the jobseekers of that industry.
Talking specifically about the investment banking sector, these dream employers or the industry leaders are as follows:
- Goldman Sachs
- Deutsche Bank
- JP Morgan Chase
- Morgan Stanley
- Bank of America Merrill Lynch
These employers top the priority list of every aspiring investment banker owing to their specific benefits such as health insurance, retirement plan, parental leave, flexible schedule, relocation allowance, and much more.
If you are an aspiring investment banker, do your research about the above-listed companies to get a clear picture of the one you dream to see yourself working at.
How To Become An Investment Banker?
Education is the prerequisite to becoming an investment banker. A bachelor’s degree in finance is highly in demand by investment banking employers.
To get an entry-level position as an investment banker, you can start with a bachelor's degree. However, as mentioned earlier, the competition in this industry is highly fierce.
And to take steps towards promotion and higher-level designation, you must have a master’s degree or doctorate in finance.
A master’s degree is highly preferable by employment providers as the candidate with this degree has in-depth knowledge of finance and financial sectors, and excellent communication and interpersonal skills.
To become an investment banker, we suggest doing some certification courses such as Investment banking certification course, banking and finance certification course, and internships.
Having these would serve as your stepping stones to landing your first job.
What does the future hold for investment bankers?
Investment banking is on the verge of becoming one of the largest sectors of the Indian Banking Industry. The growth trend of the economic activities in India and rapid digitalization results in increased demand for investment bankers.
Banking is already linked to every industry, but in the future, artificial intelligence, big data, and VR are forecasted to boost the demand for investment banking.
Out of all these advancements, artificial intelligence is expected to integrate with investment banking to provide hassle-free affairs in the future.
Conclusion
Investment banking is the right career choice for you if you like spending time memorizing MS Excel formulas to make your work easy, if you love the game of complex numbers, and if you are always interested in knowing what is new in finance and the financial market.
You should become an investment banker if you are great at forecasting the financial status of organizations by analyzing their financial reports.
Investment banking is a very lucrative and promising career choice not only in India but across the globe. However, the uncertainties are an inseparable part of the investment banking job.
FAQs
1. How much an investment banker earns in India?
Investment banking is said to be the highest-paying career option not only in India but around the world. The average yearly pay range of the investment banker is 11 lakhs.
It is the average salary reported by many investment bankers on the internet. The salary range is different for individuals with different experiences and locations.
2. What is the highest salary of investment bankers in India?
The highest salary of an investment banker in India is approx. 85 LPA. However, candidates must ensure that a higher package comes to those who dare to start small and take small but relentless steps.
3. Is an investment banker a worthy career in India?
Yes, it is. Investment banking is not just good, but one of the best career in India. However, one must not look at the salary package and dive right into it.
The job role of an investment banker is full of challenges and long working hours. If you like sitting at a desk looking at financial reports of the firms and trying to find the best financial investment for the company, this role is tailor-made for you.
4. Which MBA is best for investment banking?
An MBA in finance, accounting, or economics from the top business schools is the most suitable for an investment banking career. A general MBA, however, can also help you get this position.
It is worth noting that an MBA is not a requirement for entering the investment banking sector. Nevertheless, doing MBA is highly preferred because of the career growth opportunities this degree opens.