Mumbai: Corporate India can’t have enough of overseas acquisitions; and investment banks or i-banks as they are usually called, can’t find enough bankers. The result: a churn in the business with many jobs chasing few people.
The bankers themselves are not complaining. Global i-banks such as Lehman Brothers are courting them with high salaries and overseas postings. Last week, Gaurav Gupta, the rain-maker at multinational i-bank NM Rothschild’s India operations, and the man behind several of the firm’s recent transactions, moved to Lehman Brothers.
That’s a phenomenon that’s being seen in allied sectors in Big Finance: asset management, private equity (PE) and venture capital, even plain-old equity analysis or broking. But i-banking is where the activity is most frenetic.
Blackstone, one of the world’s largest PE funds, recently hired Anup Kapadia from HSBC India for its i-banking business.
“Global firms are offering more than 60-70% hikes. They are offering salaries prevalent in other parts of the world,” said a Mumbai-based consultant.
The going rate for analysts who currently earn Rs8-10 lakh a year is Rs35 lakh. And i-bankers with seven years’ experience can demand and get up to Rs2 crore a year.
The rise in cross-border acquisitions is the main factor behind the furious expansion of i-banks, say experts. M&A (mergers & acquisitions) transactions in India (by Indian firms overseas or in India, and by overseas firms in India) in 2006 were valued at around $12 billion (Rs55,200 crore then); the figure has more than doubled to $29.3 billion until March this year.
Not everyone is moving for the money, though. “Of course, salary is one part of the story. We can also participate in bigger deals,” said an executive who recently moved to a global firm and did not wish to be identified.
The shortage of talent is also working to the advantage of non-resident Indian i-bankers. Global firms such as Goldman Sachs are bringing India-born executives to the country. Harsha Raghavan, who was with Goldman’s overseas operations, has moved to the country to take charge of its Indian operations.