Many software professionals seek employment for better career growth and pay scale in Hyderabad. Currently, around 1.8 lakh professionals have already been working in the finance sector. This article tells you about the Investment Banking Services in Hyderabad, their role, and their services. American multinational bank financial service company Goldman Sachs is the latest Banking, financial services, and insurance sector to start functioning in Hyderabad promising to recruit 2,500 people.
Hyderabad is a city with a rich history, famous for its IT and ITE sectors, and is now home to world-class architecture and friendly policies to facilitate the setup of global financial companies. Despite its authentic culture and traditions, Hyderabad has seen massive growth in the tech and financing industry.
In this article, you will read about:
- What is Investment Banking?
- Types of Investment Banking.
- Skills required for Investment Banking.
- Commercial Banks vs. Investment Banks.
- Role of Investment Banks.
- Commitments offered by Investment Banks.
- Services offered by Investment Banks.
- Investment Banking Services in Hyderabad.
- Frequently Asked Questions.
What is Investment Banking?
It is a type of banking that assists corporations, companies, and other entities in raising their income. It acts as a mediator between investors and companies, providing financial advice to Organizations, and in some cases, to the Government. Unlike Commercial Banks, they do not serve the general public.
Instead, they advise organizations or companies on investments, equity financing mergers and acquisitions, and mutual fund investment. Investment Bankers are obliged to adhere to strict moral standards. This ensures they protect the interests of both investors and entities while maintaining transparency.
When the current capital is making progress, it has a positive effect on the investment bankers. More money and more activities create profitable projects for both bankers and clients. The important function of investment banking is to raise debt and equity funds, thus helping clients expand their businesses.
Investment Banking services in India have been on the rise with Hyderabad as the prime hub for financial advisors.
Types of Investment Banking
Now that you have learned about the basic definition, you should also understand the categories of Investment Banking. There are three main categories: Bulk bracket investment banking, Middle Market Investment Banking, and Boutique Investment Banking.
- Bulge Bracket Investment Banking– The largest and deep-rooted investment banks fall under this category. It refers to the group of important global investment banks. These banks have a broad network of clients and work with large corporations and the Government. They mainly focus on assignments like public offerings and by-products. And their average investment size is over $1 billion. Companies like Goldman Sachs, Barclays Capital, etc., belong to this category.
- Middle Market Investment Banking-This kind of investment banking caters to a smaller number of clients than the Bulge Bracket. They fall into mid-sized making them too big for Boutique Investment banking but not that big for Bulge Investment Banking. Their expertise lies in financing mergers and acquisitions, deals with equity, and manages to take over between $10-$500 million in size. Companies such as Robert W. Baird, Pipes Jaffray & Co, and Houlihan Lokey are some examples of investment banking that belong to this category.
- Boutique Investment Banking– These are smaller than the former banks. They mainly focus on specific sectors or the type of client they choose to work with. This investment banking is pretty agile and reactive to their clients offering them more services when required. Lazard Ltd. & PJT Partners Inc. are the largest Boutique Banking firms.
Investment Banking Services in Hyderabad offers plenty of opportunities for those looking to start their career in this field. Moreover, the pay scale and revenue it generates can certainly help a fresher move up the hierarchy.
Skills Required for Investment Banking
If you are interested in the field of investment banking, the least basic knowledge on should possess is financial modelling. As a financial advisor, you should have a basic knowledge of Excel and valuation methods that will help you strike a deal.
The following skills are required for any individual looking to boost his career in this field,
- Building financial models
- Use valuation methods like precedent transactions, comparable company analysis, and DCF analysis.
- Constructing pitch books and presentations to gain more clients and close deals.
- Prepare financial documents like term sheets, confidentiality agreements, and many more.
- Settling transactions between buyer and investor to increase the value of the company.
Difference Between Commercial Banking and Investment Banking
The two banks are important financial companies in today’s economy and serve very different purposes.
Commercial Banks carry out multiple functions such as creating loans, accepting deposits, and catering to a diverse range of clients including businesses and the general public. They offer services to small and medium-sized businesses as well as online banking options, real estate loans, and more. Commercial Banking involves several job roles such as sellers, sales associates, and loan officers. Local businesses in your town are likely to be Commercial Banks
Investment Banking, on the other hand, caters to large businesses and institutional capitalists like wealth and asset management, auditing services, and more. They offer more competitive and higher salaries than commercial banking. Investment Banking roles include banking analysts, capital market analysts, research associates, and so on.
You must understand the functions and services of investment banking services in Hyderabad. Before you approach these firms for any kind of assistance, you should understand the different roles, responsibilities, functions, and services it has to offer. Once you are clear with what you have been looking for in this firm for the better future of your company, you will end up making the best decisions by choosing the leading Investment banking Services in Hyderabad.
Role of Investment Banks
Investment banks assist companies in raising funds and increasing their capital market. They are generally categorized into two:
- Sell-side- They take part in selling the shares of newly introduced Initial Public Offerings, setting new bonds, and helping clients with their transactions.
- Buy-side- They take part in trading securities, like bonds and stocks, to increase returns. It works with mutual funds, pension funds, etc.
You can divide an investment bank depending on the services offered:
- Back Office- This ensures the smooth functioning of the software and is another altar for investors. The objective is to make sure that the right brokerage is sold, bought, or settled at a certain price.
- Front Office- Guide corporations with mergers and acquisitions. They also help develop new strategies and analyze the current capital market.
- Middle Office- Makes sure there is a smooth flow of income and adheres to Government regulations and instructions.
These are the roles of an investment bank and how they function. Investment Banking Services in Hyderabad offers services and commitments to its clients and also helps them make progress in making the best financial decisions.
Commitments provided by Investment Banks
Banking services ensure that it builds trust and a strong bond with its clients. Although it acts as an intermediary, it does adhere to providing full support to the clients.
- Firm commitments: An underwriter not only makes a full purchase of the bonds but also takes full financial responsibility for any unsold shares.
- Best efforts: Despite their commitment to sell the complete issue at the market price or higher, there is no legal responsibility for the unsold bonds.
- All or none: The deal is considered incomplete unless the underwriter sells these bonds at a good price. Until then he does not receive any compensation for his work.
Investment Banking Services in Hyderabad takes full responsibility for all the bonds and mergers it deals with on behalf of its clients. They adhere to their roles and responsibilities and hires investment banker with an understanding of modeling and someone who can be a promising employee.
If you entrust the services offered by investment banking in Hyderabad, you will be satisfied. The firms are dedicated to guiding and assisting various companies in all financial sectors.
Services Provided by Investment Banking
Investment Banks in Hyderabad offer services based on the specific requirements of their clients. If you are uncertain about which assets or bonds to issue or buy, or when to sell and issue, these banks have the expertise to guide you. Furthermore, the Investment Banking Services in Hyderabad have a proven track record of providing exceptional services and continue to do so.
The following services have been offered to the companies by this firm:
- Elevating Capital– A Company whose objective is to explore acquisitions, expand, project funding, etc. would need a substantial amount of money. Now, the ideal thing to do here is to reap the benefits banking services have to offer from its expertise. They would help the company by raising capital in the form of debt and equity. They also involve other smaller tasks such as designing instruments, registering documents, issuing pricing, marketing underwriting, etc.
- Mergers and Acquisitions– They play an important role in both the buying and selling of mergers and acquisitions. The company’s fate is decided by carefully handling the financial procedures and analyzing micro-details.
- Trading and Sales– These services involve new offers, stock markets, research reports, and publishing.
- Advisory Service- The company offers a plethora of services like business valuation, strategic planning, asset analysis, etc. They would also look into monetary/financial inflows, and exhaustion trends, and put forward solutions to improve and increase the financial funds of the company while planning the position of temporary funds.
- Mortgage Association– When a company requires a lump-sum amount of funds for a project, Investment Banking Companies play an important role and can be very useful. The Investment Banking studies the company’s monetary inflow trends and then utilizes this to draft terms for loan payment. The majority of the banks unite to form a syndicate and raise the funds required. An investment banker does this work by analyzing cash flow, identifying prospective banks and financial organizations, constructing and registering contracts and schemes, and liaising negotiations to make loan syndication a success.
- Funding foreign exchange– They are involved in shipping capital stocks as well as transport credits.
- Underwriting– In this process, the organization agrees to take on the financial risk at a price. The important task is to dodge increasing risks. The government frequently raises money by offering bonds in the form of debts to private companies. To manage this rule of debt through bonds, investment banking acts as an advisor and a mediator.
There are three phases in underwriting: planning, timing and demand, and issue structure.
- Planning- In this phase, the main purpose is to understand the principles of the investment and investor demands.
- Timing and demand- For a successful capital raising, these are the important factors. The following factors are considered for assessing the timing and demand of an offering:
- The current situation in the market.
- The demand of the investor
- Experience of the investor
- Precedents and benchmark.
- News flow.
- Issue structure- In this final phase, it becomes important to decide the structure of an offering. You may think of the following questions while working on this structure:
- Is it a domestic or an international issue structure?
- Are investors interested in what you have to offer?
- How will the sale take place?
Now that you have a clear idea about Investment Banking Services in Hyderabad, its commitment, and other features, read ahead to learn about the best firms offering you these services.
Top Investment Banking Services in Hyderabad
If you are considering banking services, you may be wondering which investment banks to look for in Hyderabad. Well, Investing Banking Services in Hyderabad has a lot to offer, and I have curated the best ones curated for your reference.
This is the leading Investment Banking Service in Hyderabad. This company is known to be associated with more than 100 financial institutions. They provide services as per their client’s needs and requests and have strong experience in dealing with almost 400 clients.
Type of industry- Banking
- Unsecured loan for business.
- Corporate financing.
- Loan for a professional organization.
- Trade financing
- Funding for projects
- Property loans.
- Loans against shares.
- Funding for Foreign Currency.
#2 Karvy Investment Banking
Founded in 19995, this is one of the most popular finance firms in Hyderabad. They provide a wide range of investment banking and corporate advisories. They mainly deal with project advisories and loan syndication, mergers and acquisitions, and private market and asset resolution.
Type of Industry-Finance and Banking.
#3 State Street Services India Private Limited.
This firm is a leading service provider in the financial industry across India. They offer services and help clients make an informed decision that benefits their company. They offer specialized research, and trading to preserve and enhance the value of their client’s portfolios.
Type of Industry- Finance and Investing.
#4 Goldman Sachs Services Private Limited.
This is a Global Investment bank and is most popular for its services in finance and Banking. One of its branches in Hyderabad has been making sharp progress in client service. It also deals with Asset Management, Investment banking, Engineering, Operations and controller
Type of Industry- Finance and Banking.
#5 Broadridge Investment Banks
Founded in 1952, Broadridge is a global financial and tech company with a total revenue of $5 billion. In the beginning, its prime role was in investment banking services, and has now expanded its services to asset management, capital markets, corporate finances, and wealth management.
Type of Industry- Banking and Finance.
#6 Wells Fargo Investment Banks
Another popular company in finance and banking is Wells Fargo. This is an American Company with an overall revenue of $1.9 trillion. It has started its operations in India for the sole purpose of middle market and investment banking services. They have about 50,000 Indian employees.
Type of Industry- Investment and Banking.
#7 Bank of America
This firm has been operating in India since 1964 and has been widespread across several verticles. This company was formerly known as DSP Merril Lynch and is now popularly known as Bank of America Services Limited.
Type of Industry- Banking.
#8 Invesco Banking Services
Based out of Atlanta, US this firm now has its branch in Hyderabad. They are a renowned finance company with branches spread across 26 countries.
Type of Industry- Banking
#9 UBS Investment Banks.
Union Bank of Switzerland is the largest wealth management firm offering its service mainly in asset management and private banking services in Hyderabad.
Type of Industry- Banking
#10 David E Shaw Investment Banks
This is an investment bank based out of New York, USA. They entered the Indian market in the year 2006 and have generated a total of $55 billion so far.
Type of Industry- Banking.
#11 Verity knowledge solutions
Founded in 2009, Verity Knowledge Solutions is an Investment Banking Service with headquarters in Hyderabad. This is a privately held company
Type of Industry- Investment Banking.
#12 Spring forth Capital Advisors
Founded in 2011, this is a corporate Banking, Investment Banking, and BFSI company with its headquarters in Hyderabad. Mainly specializes in corporate banking.
Type of Industry- Corporate banking, Investment banking, Bfsi
#13 Edelweiss Financial Services Limited
Edelweiss group was co-founded by Rashesh Shah in 1995 and Edelweiss Financial Services Limited is a part of this group. They offer services such as credit facilities, Investment and advisory, insurance, wealth management, asset management, etc.
Year of establishment-1995
Type of Industry- Corporate and Investment Banking
#14 Citi Bank
This bank was started as a banking division and offers financial services activities including consumer banking and HNI services to corporations. This was founded in 1812 and makes one of the oldest International banks to now offer its services in India
Type of Industry- Corporate and Financial banking services
Indian Office Location- Mumbai
Headquarters-New York, US
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#15 Deutsche Bank
This is a global investment bank mainly in the investment banking sector. The services offered are private banking, business banking, insurance, and wealth management services.
Type of Industry-Corporate and investment banking.
Indian office- Mumbai.
#16 Axis Capital Limited
This is one of the leading investment banks to engage in boutique and mid-market investment banking services. This was earlier called as Enam Securities Private Limited and is a part of Axis Bank. The services provided by this firm are Equity, Capital Markets, M&A, Structured Finance, Private Equity, and Investment Banking.
Type of Industry- Subsidiary of Axis Bank
#17 IDBI Capital
This is a leading financial services company and also a subsidiary of IDBI Bank. The services provided are Capital Markets, Investment Banking, Institutional Broking and distribution, Retail Broking and Distribution, Fund Management, Private Wealth Management, and Research.
Type of Industry- Subsidiary of IDBI Bank
Frequently Asked Questions: Investment Banking Services in Hyderabad
Q1. How do investment banks make money?
The primary source of income is from the services they provide to their clients like asset allocation, mergers and acquisitions advice, and underwriting.
Q2. What is the role of investment banking services in Hyderabad?
Investment Banking Services in Hyderabad’s role lies in offering a wide range of services such as investment or financial advice, developing financial strategies, avoiding risks, advice on mutual funds, etc.
Q3. Who are the clients of Investment banking services in Hyderabad?
Their important clients are corporations, government organizations, and investors.
Q4. What are the benefits of working at Investing Banking Services in Hyderabad?
For those looking for a challenging yet dynamic career in this industry, you need not think twice. This industry offers a high earning potential and growth opportunities in career.
Q5. Who is an investment banker?
He is a person who is responsible for raising capital or money for corporations, governments, or businesses.
Conclusion: Investment Banking Services in Hyderabad
Investment Banking services in Hyderabad have been growing alongside IT and ITEs. With a plethora of opportunities in both career and financing, one might find this article helpful and easier to scroll through various services in Investment Banking. The revenue generated every year is close to 2$-$3 billion and continues to provide excellent services in financing and banking. Any firm that needs advice in managing their finances investing or buying loans, should consider adhering to their expertise and assistance. This article has given you the best services in Hyderabad and all the basic information you may find beneficial for your understanding and learning purpose.