00:00Grow, Lenskart, Swiggy, these are a few big names which went for IPO in the last 12 months.
00:05Billions of dollars were raised, thousands of crores flowed from investors to companies.
00:11But behind each of these IPOs, investment bankers made 100 to 200 crores in fees
00:16without putting in a single rupee of their own money.
00:19Welcome to the world of investment bankers, the industry which literally runs the world.
00:25Today, we will understand what investment bankers actually do, how they make these massive deals happen,
00:31and why companies pay them so much.
00:33Investment bankers don't actually invest in anything, nor are they bankers in the traditional sense.
00:39Investment bankers are professional dealmakers instead.
00:42The bridge between the companies that need money and the investors who have money.
00:47You know how marriage bureaus work in India?
00:50They find the perfect match between two families.
00:52They understand what each side wants, negotiate terms, handle all the formalities,
00:59and ensure the alliance proceeds smoothly.
01:02And then, they take their fees.
01:05Investment bankers do exactly that.
01:07But instead of matching families, they match companies with billions of rupees,
01:12and they charge crores in fees for it.
01:15Investment bankers connect them, structure the deal,
01:18navigate all the complexities, and make sure the money actually flows.
01:23That's their core job.
01:25So, investment bankers work on three major types of deals.
01:29Let's break them down one by one.
01:32Deal type number one.
01:33IPOs.
01:34Taking companies public.
01:37This is exactly what happened with Grow, Lenscart, and Swiggy.
01:41Suppose you and your friends started a cloud kitchen.
01:44It became famous and super successful.
01:46But now, you want to open 20 kitchens across India,
01:50and you need 100 crore rupees for that.
01:52To do that, you have two options.
01:55A. You find one super rich investor to give you all the money needed.
02:00Or, you can take the company public
02:02and let thousands of regular people
02:05buy small pieces of your company to the stock market.
02:09The second option is what we call an IPO.
02:12For Swiggy's IPO, which raised thousands of crores,
02:16investment banks walked away with 150 to 200 crores
02:19just for orchestrating the entire process.
02:22Deal type number two.
02:24Mergers and acquisitions, also known as MNAs.
02:27A merger is the merging of two or more companies,
02:31usually of similar size,
02:33to form a new single entity.
02:35An acquisition, on the other hand,
02:37is when one company, which is usually a bigger one,
02:40buys another small company.
02:42Think of Tata buying Air India.
02:44Or, think of Walmart acquiring Flipkart for $16 billion.
02:49Now, buying a company isn't like buying a car.
02:52It's more complex than you think.
02:54There are questions that need answers.
02:56For example,
02:58is this company actually worth 10,000 crores?
03:01Are there any hidden debts in this company?
03:05Are there any pending lawsuits against the company?
03:08Will this deal make strategic sense
03:10in five years or 10 years?
03:13Investment bankers figure the answers
03:15to all such questions,
03:17acting like a combination of detectives,
03:19accountants, and negotiators.
03:21They analyze financial statements,
03:24research the industry,
03:25calculate a fair price,
03:27structure the payment process,
03:29and manage months of negotiations between two sides.
03:32In an acquisition of 5,000 crore rupees,
03:35investment banks typically charge 1-2% in fees.
03:39That's 50-100 crore rupees
03:41for a few months of work.
03:43Deal type number three,
03:44raising capital for growth.
03:46Sometimes, companies don't want to go public or get acquired.
03:50They just need money to expand,
03:52maybe to open new factories,
03:53launch new products,
03:55or enter international markets.
03:57Investment bankers help them raise this type of capital
04:00in two ways.
04:01First, debt.
04:03It is like taking out a massive loan.
04:06The company borrows 500 crore rupees from banks
04:09or financial institutions
04:10and repays with interest over time.
04:13Investment bankers find the right lenders,
04:16negotiate interest rates,
04:18and structure all the terms.
04:20It's like getting a home loan,
04:21but for 500 crore rupees instead.
04:24The second way is equity,
04:25which means selling the stake of the company
04:27to investors for cash.
04:29You've seen Shark Tank or Shark Tank India, right?
04:33Entrepreneurs give 20% equity for 2 crore rupees.
04:36Now, investment bankers do this at a corporate scale,
04:40helping raise 300 crore rupees, for example,
04:43by selling 15% equity to private equity funds.
04:46Now, you might be thinking,
04:48all this sounds interesting,
04:49but what do I need to do
04:51to become an investment banker?
04:54The truth is,
04:55you don't need to be a finance genius.
04:57What matters is your ability to learn quickly,
05:00work under pressure,
05:01and pay extreme attention to detail.
05:04The core skills required
05:05are financial modeling,
05:07analytical thinking,
05:08communication,
05:10and attention to detail.
05:11One mistake in a financial model
05:13can cost millions.
05:15One error in a legal document
05:17can kill a billion rupee deal.
05:20Precision is non-negotiable.
05:22Most people usually start
05:23as an investment banking analyst
05:25with a starting salary of 12 to 15 lakh rupees.
05:29After two to three years of solid work,
05:31you become an associate,
05:33earning 18 to 25 lakh rupees per annum.
05:35And after four to five years,
05:37you can become a vice president,
05:39earning 30 to 50 lakh rupees per annum.
05:42You see how financially great
05:44investment banking as a career is?
05:46Now,
05:46if you're a college student
05:48or graduate watching this video
05:50and this career excites you,
05:52here's the most important thing
05:54you need to know.
05:55There are many ways
05:56to break into investment banking,
05:57but one stands head and shoulders
06:00above the rest,
06:01and that is the CFA certification.
06:03The CFA certification
06:05is globally recognized
06:06as the gold standard
06:08in investment and finance.
06:10It's what top investment banks,
06:13private equity firms,
06:14and hedge funds
06:15look for when they're hiring.
06:17And here's the best part.
06:18With Amarticus Learning,
06:20you don't just prepare for CFA,
06:22you get industry-aligned training
06:24from KPMG in India.
06:25That means you're learning
06:27from industry experts,
06:28getting real-world insights,
06:30and building the exact skills
06:31that investment banks demand.
06:34Don't wait.
06:34Click the link in the description below,
06:37explore the CFA certification program,
06:39and connect with our expert counselors
06:41to begin your journey
06:42into this high-paying investment banking industry.
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