How to Break Into Investment Banking in India If You’ve Been Out of School for 5+ Years and You Don’t Have a Finance Background
I get a lot of questions about this one, but everyone behind M&I is pretty clueless when it comes to India.
Luckily, that’s not the case with our readers – many of whom work in the region or are planning to in the near future.
This interview comes to you from a reader who landed a boutique investment banking Associate position in India, coming from a non-finance background (engineering).
Read on to learn all about investment banking in India, how it’s different from North America and Europe, and how you can break in.
Background
Q: Can you tell us about your background?
I was an Electrical Engineering major from one of India’s top engineering schools, and I worked at a top IT company here for 5 years, after being recruited on-campus.
I was on assignment in the UK for 2 years, and also had entrepreneurial experience co-founding a software firm.
Things did not work out and I chose to close it down a few months before starting my job search.
Q: Ok, so you started the job search after you had already been out of school for many years and after you had experience working full-time and starting your own company. What were the key challenges you faced in breaking into investment banking?
The two main ones:
- I didn’t have a finance degree, so most larger investment banks refused to even look at me.
- Many firms were reluctant to hire me due to my age.
Since investment banking is a relatively new field in India, the consensus here is that only Chartered Accountants (CAs) or finance MBAs can handle the job. I had to convince firms that even someone without those credentials could do it.
Also, many firms in India pick mostly post-graduates and offer them Associate roles – relatively few banks here actually have formal Analyst roles.
Q: Ok, so you faced quite a few challenges. What about the recruiting process in India? How is that different from other regions like Europe, North America, and East Asia?
I don’t have firsthand experience of applying to those regions, but here are some key points to be aware of in India:
First, there are far fewer front-office investment banking jobs – only around 2,000 to 3,000 total – despite the size of the economy. That means that bulge brackets are even more selective, and that they only pick students with MBAs from top schools in the US, Europe, or from the top Indian Institutes of Management (IIM). Sometimes CAs with a few years of banking experience are also picked for front-office roles.
Next, the majority of investment banking jobs in India are in knowledge process outsourcing firms (KPOs) – “Captive KPOs” (part of bulge bracket banks) and “3rd Party KPOs” that serve many clients.
It’s easy to get lured into working for these KPOs, but I strongly advise against it because you’ll get pigeonholed into making pitch books and doing valuations all day. They try to spin it in a positive light by sending you abroad for 2 months, but it’s not real front-office work – the exit opportunities are limited, so I would avoid this if at all possible.
Since the majority of investment banking jobs are at KPOs, the actual front-office teams at real banks here are small – maybe 30-40 people for bulge bracket banks and 5-15 for boutiques.
The interviews are similar to Europe / the US – you start with a phone interview first, then meet the Associate, VP, and so on.
Overall they’re more “by the book” and more technical – some firms also ask you to create models and complete case studies.
Most undergraduates are recruited from top engineering schools like IIT – unlike the West, the best Indian students go to engineering or medical schools, so that’s where banks recruit.
Breaking Into Investment Banking
Q: So you already had the odds stacked against you, and you were in an extremely competitive market with a lot of engineers trying to make the switch into finance. How did you set yourself apart from everyone else?
I knew that my resume was strong, since I had worked at a top IT company and also had experience starting my own – the only problem was that I lacked an MBA.
I used 3 strategies to set myself apart:
- I had been an active stock investor since college and had managed funds for several other people. I had decent returns over the years, and attached my portfolio performance over the past 5 years to my resume.
- I completed a short financial modeling course and leveraged that to get contacts in the field.
- I relied heavily on networking and cold-calling since on-campus recruiting wasn’t an option.
I thought about studying for the CFA as well, but then I saw your comments about it and decided not to!
Q: Maybe you can walk us through your networking process. I get a lot of questions on how to find names and contact information in the first place – how did you do this when you had already been out of school for years?
There were not many alumni from my college in investment banking, since the field is relatively new here. I got some contacts through the financial modeling training program I went through, and also used LinkedIn, Facebook, and plain Google searches to find people.
I cold-called over 200 firms to receive my first interview.
Q: Wow. So of those methods, which were most effective in getting you interviews?
I attended a lot of meetups in Mumbai that I found on social networks, but most folks didn’t respond positively because of my non-traditional background.
For me, cold-calling was the most effective networking strategy.
I was humiliated at first as I received rejection after rejection, but then I got used to it and kept at it since I knew from your other articles that cold-calling definitely worked.
I focused on boutiques, and after hundreds of calls and weeks of effort, I was invited to my first interview – and won an offer after 8 grueling rounds of interviews.
Q: I get a lot of questions on the usefulness of financial modeling courses. How much did yours help you?
It helped in 2 ways:
- I had no formal finance background, so I needed it to crack the interviews and pass any modeling tests they might have given me.
- Perhaps more importantly, I made some of my networking contacts through this course.
Even now after I’ve started, it has proven helpful because many boutique firms do not have formal training programs for Analysts – so it gave me a head start on everyone else.
Culture, Models, and Bottles
Q: How do salaries and bonuses in India compare to what you would earn in North America / Europe? Is everything based on local rates, or are you paid the equivalent Dollar / Euro salary?
In absolute terms, salaries are less than what you would get in New York or London, for example.
But the cost of living in India is also much lower – so if you take this into account, the actual quality of life you could get with your salary is comparable.
Here’s the pay scale for base salaries:
- Front-Office Bulge Bracket Banks – Pay the most, often higher than New York/London in PPP (Purchasing Power Parity) terms due to the lack of qualified candidates.
- “Captive” KPOs – Also pay a lot, but the work sucks.
- Boutiques – They start out lower than the “captive” KPOs, but salaries scale up higher after a few years.
- 3rd Party KPOs – Pay is the lowest and the work also sucks.
Exit opportunities from the first 3 here range from “decent” (KPOs) to “great” (boutiques / bulge brackets).
You should avoid the 3rd party KPOs – but also keep in mind that “captive” KPOs are a dying breed since many firms have sold their divisions.
Bonuses have been excellent at bulge bracket and middle-market firms here – in the boom years of 2003-2007, bonuses were 100-250% of base salary.
Boutique bonuses average 30-75% of base salary, while “captive” KPOs are 30-50%, and 3rd party KPOs are even less.
Q: How is the culture at Indian financial services firms different from what you see elsewhere in the world?
Indian firms tend to be more conservative, and the financial markets here are not as well-developed – the bond market is negligible and derivatives trading does not involve the complexity found in North America / Europe.
Also, business here is based on relationships and proximity to important government officials – it’s less “professional” than the West.
About Your Future
Q: You defied the odds and broke into investment banking after you were already out of school for years, in an incredibly competitive market. How will you leverage this experience in the future?
I want to work at a top private equity firm one day – but during my job search I found out that a top MBA is becoming indispensable for IB/PE jobs due to the branding and the network you gain in the process. People also tend to listen to you more readily if you have an MBA from a top business school.
So I’ll be pursuing an MBA in a year or two – but since I’ve already broken into investment banking, I’ll pursue a 1-year MBA rather than a 2-year program.
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Tags: age, cold-calling, financial modeling, investment banking, investment banking associate, investment banking jobs, MBA, understanding investment banking
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Hey,
Nice insightful article. I would like to add one more type of I-banks to the list, the Indian Full Service IBs like Kotak, ENAM and JM Financial, which rather surprisingly are missing from the list. They have fairly large teams (100+ in IBD) and I work in the M&A Advisory for one of them. As you had rightly pointed out, I too joined the bank straight out of an IIM. These banks concentrate mainly on IPOs and Trading but have a fairly large M&A team too.
And another curious difference is that in India, graduates, especially from non-finance background, hardly try to get into investment banks. And people at analysts levels are mostly Chartered Accountants and the more senior ones are MBAs who have less pre-MBA work experience ( People attend B-Schools earlier in India and hence are taken in at 3rd yr analyst levels)
P.S:- I had commented long back about IBs in India and you had replied that you will use them for your future posts. Some of that information might be relevant to this post.
Thanks for the info. I think the author (the interviewee) sort of included the Indian Full Service IBs along with the boutiques and bulge brackets, but that’s interesting to note the difference.
Suraj,
I’m not sure if you’re aware of finance modeling course (10 weeks) which is run by a private school at Nariman Point, Mumbai. Now, as you’re a part of the I-bank already, do you think these banks come to recruit students with no prior finance background but short finance course? Any further interaction related to I-banking can be beneficial for me. Thanks.
Hi Suraj,
I was just wondering if these firms recruit from SPJain MBA?
“Many firms were reluctant to hire me due to my age.”
Age is a BIG deal in Asia. I don’t know why, but it’s annoying when the first thing people ask is “how old are you?”
Dude that is the first question people in Korea always ask me. “How old are you?” before even getting my name. I think I’ve just gotten used to it…
After the age question and a few others, it’s:
“Do you have a girlfriend/boyfriend?”
Then. Where do you live?
That’s weird. In Asia, it supposed to be really impolite to ask people’s age when you just meet them .
Hi, M&I!
Another good article. I have been a reader for the web for some time and find it really helpful. I am now in a situation that needs some advice from people who have been in banking.
I am now a final year student majoring in Finance in a top Asian universities in HK. I had an internship with a regional hedge fund working as a research assistant. I hope to join S&T or research after graduation. I have applied almost all banks that are recruiting but hardly got any interviews. The problem is that banks almost recruit solely from overseas (US) and my internship was not with a big name. Also, I think networking does not work as much in HK as that in the US. I am confident that as long as I can get an interview, I can proceed well.
I currently have a part time offer of institutional sales from a top regional firm and it might be extended into a full-time offer but there is uncertainty. Other probable offers are big fours and some risk consulting firms.
I have been thinking about my way out and listed out several.
1. Going on with job hunting and see whether there is any positions opening in next year. Also try to turn the part time offer into a full time one. But there is a high probability that I have to end up in big 4, which I really don’t want.
2. Deferring grduation for 0.5-1 year. Try to leverage on my last summer internship and this part time job to land a summer intern with a big firm (not necessarily bb).
3. Similar to 1 but if I end up with only offers from big 4, I will pursue a Master of Finance in UK’s top 3 universities (US schools are much more difficult to apply).
I am really sorry for this lenthy post but I really appreciate your advice. Could you please give some comments on each alternative? Thanks!
Best,
Janet
I would apply to Master’s programs in the UK or US and then leverage that to recruit with more banks. You can keep job-hunting in the meantime, but going to a top school elsewhere gives you the best shot at getting an internship / FT offer.
Thanks for the advice.
How would you say about the master programs in, say, LSE/Oxford/Cambridge? Are those programs with high recognition in banking, at least in the process of CV screening?
I’m not an expert, but yes, I believe those are the top programs in the UK and you should receive recognition at banks.
HK office knows only those three UK universities. Others they have no idea.
Which are the existing top MBA programs that’s only for a year – except INSEAD?
Don’t know, think that’s the main one
I worked at CS India, IBD as an intern the previous summer. The analysts there were MBA’s as well. I would love to know how one could apply to banking jobs in India if you are doing your studies in the UK/US. I am doing a masters in Finance at a top UK target and I did my undergrad at Canada’s best school. Most indian bbs don’t have online application systems and I have no means of networking with people in India. Could anybody help me out in means of reaching people.
check your school alumni network. At least your canadian univeristy should have one.
Alumni, cold-calling, travel to India and meet with people in-person / at meetup events there….
Hi,
I’ve been an avid reader of your site for quite some time now, but regrettably only found it after my job search was over.
I graduated from a non-target US school with a respectable GPA in 2009 and though I got to Superdays with two BBs, I ultimately didn’t get an offer from either.
Amid the hectic economic times, I’ve managed to land a job and am currently working in the M&A department of a top Korean securities firm in Seoul.
I was wondering if you could give me any advice.
I am planning on getting an MBA 3 years down the road and ultimately end up in *surprise* large-cap PE (Blackstone). I have a 3.5+ GPA and a GMAT score of 710. How do you think I can maximize my chances of getting into HBS, Wharton and the like? Do you think it is wise to try to move to GS/MS or other BBs as soon as possible? If I did manage to successfully transfer in a year or so, would they consider me a “2nd-year analyst” or would I have to start from scratch?
Thanks a lot for your time.
By the way, I saw your twitter page as well and implied from your comments that you didn’t have a very great time in Seoul, which is unfortunate. Are you still in Seoul by any chance? If so, I would love to meet up. I’ll make sure you have no more “Saturday night FAIL”s. =)
To get into a large-cap PE firm you need to move to a US or European bulge bracket bank – you stand very little chance otherwise. I would move ASAP. That will also improve your chances at top business schools. See the article on lateral hiring for more on this – most likely you will have to start over.
I’m leaving for the Philippines shortly, but will be back in January. It’s not really an issue with Korea itself but more with my work schedule – I’ve had fun here, but I need to make some changes to how I spend my time.
Alex,
You probably know this already, but “BB” in Korea is a lot broader than NYC. Unless you plan on moving to NYC office, really should broaden your search beyond GS/MS.
And if you’re planning on going to Blackstone in Korea… I would network like crazy. Only way to get in is kissing/shining Blackstone MD’s Hermes loafers.
And no chance of going to Blackstone if you only have a “top Korean securities firm.”
More chance with GS/MS/JPM/CS/UBS/BOA-ML/BCS/Macq
Off topic, but do you think a PE internship before I begin my BB analyst stint would be helpful for recruiting for the buyside down the road? It may give me something to point towards when I explain how I became interested in private equity.
Yes it would help
I was actually looking for an article I read in the past that discussed 3 key points to get across when interviewing (motivation or drive?) and I was having trouble finding it. Do you have the link? I thought this would be faster than e-mail. Thanks
http://www.mergersandinquisitions.com/3-most-important-interview-questions/
Hi,
I was really glad to read this interview.. it has a lot of truth in it.. I’d like to add my perspective to it as well.
I live in Mumbai and graduated with a degree in management studies(undergraduate).. I was set on breaking into Investment banking and tried cold calling, emailing and even straight out walk-ins at all known Investment banking divisions, big and small.. however nobody seemed to be interested in taking on undergraduates in a junior analyst role here in Mumbai.
I even tried networking and managed to have an informational interview with a VP at one of the leading local brokerages.. who informed me of how the scenario is and the message i got is that theres no room for undergraduates.
I ended up working at a 3rd party KPO doing research for a bulge bracket. The pay is low, but its a learning experience which I hope will hold some value till I complete my postgraduation.
These are the views I’ve come to realise through my own experience:
Fact 1
I’d like to point out that MOST analysts at investment banks here in India ARE engineers.. (you can browse though linkedin and verify the same) and most IIM Mba’s ARE engineers as well.
Fact 2
No Investment bank here seems to be hiring undergraduates.. the requirements are MBA’s and CA’s only.
Fact 3
Most Investment banks have fewer than 100 analysts.. and openings are few and Investment banking is not a well developed field here in India..
Fact 4
A CFA certification is held in regard here in India.. simply because the state of education here in India is still pretty miserable, so an international certification adds a great deal of credibility, even though most bankers dont have one.
Thanks for the additions. The bit about the CFA is interesting, maybe India is the one region where it’s a good idea…
Hi,
Nice article.. I am really at the crossroads right now.. just finishing my MBA and have an offer from a boutique in Project finance profile (i know its not the best thing
…). Anyways, the point is i have a pre MBA workex in IT (very common in India).. and now i am thinking of starting on my CFA. I was just wondering whether it is useful in Indian scenario for a career in IB. Also what it takes to move into M&A dept after working in project/infrastructure finance.
CFA is probably more useful in India than in other regions. Moving into M&A: mostly networking, trying to show that you’ve done M&A-related projects in project finance.
Someone I know at a firm hasnt responded to my email (which requests a phone call to discuss his firm) and it’s been 2 weeks.
When I follow up should I reply to my sent message so he can see the original message OR should I send an entirely new email? How should I word it?
It doesn’t matter much, but you can quote the original one and say, “[Name], I emailed you last week – just wanted to follow-up and see if you had any availability to discuss…” and keep it very brief.
If I did something unrelated to banking/consulting before MBA, then did an associate stint at a bank or a strategy consulting firm after MBA, is it possible/likely to move towards private equity?
It’s possible but very difficult with no pre-MBA banking experience. They are mostly looking for former IBD analysts – even consultants have a hard time getting into most large PE firms.
I meant say after 2 years as an Associate is it realistic to move to PE? I heard they usually only recruit out of analyst classes just I was curious
It’s possible but rare. It was more common in the bubble (2005-2007) when PE was in need of more people – these days you might be able to pull it off at a small fund but it would still be tough.
Hey Brian I was wondering about your experiences working in IBD at locations like San Fran, Los Angeles, etc, basically non-NYC locations.
Are the exit ops worse off in the west coast? Can I still make it to PE? What is the advantage of working in NYC and should I transfer to my firm’s NYC office asap? Or will that be really hard and I should just look at lateralling to BB’s in NYC. If it helps, my group is industry such as Sponsors/TMT/Consumer,Healthcare.
Thanks a lot!
You are more limited to west coast opportunities if you start there. You can still get into PE but it’s harder to move to NY because you have to fly in for interviews. Generally people think that NY is more flexible / lets you move to more places vs. starting elsewhere. Transferring is up to you – if you really want to work in NY long term it’s a good idea but completely dependent on how difficult it is to do.
Thanks for your response. So then would I have a natural advantage for exit ops within the West coast then? I’m doing TMT and have an opportunity to go to the NY office but everyone tells me that would be a dumb move due to deal flow being better in the SF office. However, I still want to move to NY within 5 years, either after a MBA or lateral within groups.
I don’t mind doing PE/VC for West coast though, what are your thoughts on which location I should pick (W vs E)?
You would have a better chance on the west coast. If you really want to be in NY eventually, then I would go to the NY office right now instead.
Hi,
I am in the final year of my MBA (Finance) of one of the top 20 colleges in India (I know not a very good prospect). I have 3.5 yrs of prior work ex in IT as Business Analyst and currently I have cleared CFA Level 1 and appearing for Level 2 in June 2010. I want to know how good/bad my resume will look for a profile in I-Banking in India. Where are the opportunities (if any).
Thanks
You sound competitive – they key question is how many banks recruit at your school. I’m not familiar with the recruiting environment at all the universities in India, but it will come down to how many banks recruit there.
If possible can i get into equity research side and then shift to I-Banking… Is the shift possible and do the I-banks look at this with respect??
Yes, it’s possible – ER is certainly good, though banks view it as less similar than private equity, for example.
Hello Sir, I am very inspired by your story.
Infact I am Engineer from one of the top 10 universities in India. Unlike, in your case I do not want to wait for 5 years to switch to IB. I am very passionate about finance. I have been working for 6 months in a small yet very resourceful place, analyzing and trading derivatives in the international markets especially Short term Interest Rate futures, U.S treasury notes and Crude Oil futures. I have a very decent pay package i.r 7.5 lpa at present. However monetary compensation is not my primary driving factor.
I would like to know about premier boutique ib’s in the country and also with the help of my qualifications how do i get there.
If possible please do pass me your personal email id. I was very moved by your interview, matched my situation to the word!
Thanks
I just became a ca, and will be giving my cfa level 3 in june.
After talking to many bankers, I realised that I dont want to work so hard. I can make more money teaching chartered accountancy.
But my dad thinks its better to work at a bb for a while, so that he can flaunt that when looking for a bride for me. True story.
Which brings me to my question. Can a CA get a profile/pay similar to whats offered to an mba with less work ex, ie at a third year analyst level maybe?
I’m not 100% certain there but I doubt it – banking pays more than almost anything accounting-related.