An Investment Bank is one type of financial institution that helps large companies to get the access of the capital markets for raising funds. Investment banks help companies and corporations to raise money by selling or issuing equity or debt in the primary market, launching an IPO. They also provide strategic advisory services for mergers, acquisitions and their ancillary services may include trading of derivatives, commodities, brokerage Services, research activities, creation of market, insure bonds or launching new products such as credit default swaps and assist in foreign exchange transactions. Investment banks are also known as “Manager of an Issue” or “Lead Investment Bank”.
The first public sector investment bank in India is State Bank of India that opened up its division of Investment Banking back in 1972. Presently there are more than 300 investment banks registered with Securities and Exchange Board of India (SEBI). No person or institution without a certificate of registration from SEBI can act as Investment Banker in India.
A report dated September 12, 2012, states that the fee income of Indian investment banks has dropped by 58% to $187 million for the period between January 2011 and September 2012. The said income for the same period one year earlier was $448 million. The majority of the recent income .i.e., 53%, came from debt capital market contributions, earlier it was 40%. The contributions from “Equity Market Capital” and “Merger and Acquisition” also dropped to $ 30 million and $71 million by 58% and 71% respectively.
The following is the Leading Investment Banks in India in 2012.
- Bajaj Capital has over 120 offices in 50 cities in India with a number of over 10,000 of active Advisers Associates. They offer unparalleled solutions of capital raising to entrepreneurs in India. It is under SEBI Category of “Merchant Bankers Expert Group I”. Their services include mutual funds, life insurance, universal insurance, etc to both public and personal institutions.
- Avendus is another investment bank founded in 1999 that has offices in Mumbai and Bangalore. They offer M & A solutions and support of research oriented back up for capital raising mainly to international firms with strong India connection. They are one of the leading providers of financial services well known for customized solutions in the areas of capital markets & financial advisory services, wealth and alternative asset management to clients that include corporate, institutional investors and high net worth individual investors.
- Barclays India is working in India for nearly three decades. Their services include, investment banking, wealth and investment management services, corporate and personal banking, credit cards and have offices in Mumbai, New Delhi, Hyderabad, Nelamangala and Kanchipuram.
- ICICI Securities Ltd is a subsidiary of ICICI Bank that offers Equity Capital Markets Advisory Services, Retail and Financial Product Distribution and Institutional Equities. It is the chief equity house in India with its wide sharing network for back-to-back banking solutions. It is listed under the Financial Services power, UK and FPS (Financial Power Of Singapore) Singapore.
- Cholamandalam Investment & Finance Company Ltd, incorporated in 1978, is a part of the Murugappa Group that has net worth of over US$ 880 million. Their services include capital market finance, vehicle finance, depository services, securities broking, mutual funds and insurance and distribution services.
- ICRA Limited incorporated in 1991, although an independent and professional company, is an Associate of Moody’s Investors Service. They are a leading provider of credit rating and investment information services in India. The major stake holders of ICRA include leading Indian banks, financial institutions and Moody’s Investors Service.
- IDFC or Infrastructure Development Finance Company is one of the popular choices among the aspiring investors in India. This financial institution has main focus on the project and infrastructure finance activities. They have recorded a constant presence in the field of innovative infrastructure initiatives, project development, asset management and advisory services in India. Their 100% subsidiary company IDFC Private Equity manages two funds India Development Fund and IDFC Private Equity Fund II with a current corpus of USD 400 million (INR 1,734 crore).
- SBI Capital Markets is India’s leading system consultant and investment bank that started operation in 1986. SBICAP offers entire range of Investment Banking Services. Asian Growth Bank owns 13.84% stake in the equity segment of SBI Capital market.
- Tata Investment Corporation Limited (TICL) is a non-banking financial company with RBI certification and registration as ‘Investment Company category’. TICL provides and assists long term investment solutions through equity and other securities in a wide range of industries. The major revenue of TICL comes from of profit on sale of investments and dividend income.
- STCI Capital Mumbai, previously known as UTI Securities Ltd was promoted as a self-governing specialized independent professional entity body that contributes to all types of investment related behavior and commercial consultancy services. The Standard Chartered Bank (Mauritius) Limited acquired 49% stake of UTI Securities Ltd from STCI (Securities Trading Corporation of India) with effect from January 17, 2008 and subsequently SCBM further raised their stake by another25.9% to 74.90%. The investment bank was renamed as STCI Capital Mumbai with effect from 23 March 2012.
The following table shows the past performances of some of the leading investment banks in India.
|Rank||2005 Fees Collected||Rank||2006
|Rank||Fees Collected Till 2007||Rank|
|DSP Merrill Lynch||
|4||21.8||4||40||4 & 5||29.9||7|
|JM Morgan Stanley||
|Deutsche Bank AG||
|8||17.2||8||40||4 & 5||31.2||6|
|CLSA- Asia-Pacific Markets||13.4||10|
The data mentioned here were collected from Thomson Financial.
Fees mentioned here are in million US$ and include declared charges for M & A, IPOs and their related subsequent fees, amount earned on debts and loans. Morgan Stanley and JM Financial were partners till 2006; likewise Goldman and Kotak were partners till 2005.