Thursday, March 29, 2007

Indian i-banks to fight it out with foreign ones for size and talent

It has now become common knowledge that since it announced its “break-off” with Morgan Stanley, domestic investment banking major JM Financial is aggressively hunting for both size and talent. Having sold its equity broking division for a whopping $445 mn to MS, JM is now flush with funds to afford a local brokerage house to re-build the equity sales and research team. Plans are also afoot to hire around 30 research analysts over the next 12 months. On both these accounts, it will be a rough ride ahead for the venerable institution.

According to an article on The Mint, the Indian investment banking industry is facing a severe talent crunch, with the cream of the lot having been picked up by the foreign investment banks, which are landing up on the Indian corporate shore in droves. The foreign banks have been snatching talent out of the jaws of Indian recruiters, with pay packages comparable to those in other parts of the world. The article goes on to cite instances of Lehman Brothers hiring Gaurav Gupta of NM Rothschild and Blackstone hiring Anup Kapadia from HSBC India, thus highlighting the bitter feud between foreign banks themselves for skilled personnel. Certain firms like Goldman Sachs are calling in Indian expats handling overseas operations to set up and manage the Indian offices.

In all this rush for deals and dealmakers, the only ones who are smiling are the i-bankers themselves, who earlier with a salary of Rs. 8-10 lakhs can now expect the same to go up to around Rs. 35 lakhs. And anyone with an experience of 8 years plus can demand upward of Rs. 2 crores a year!

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