Others

MUMBAI: Earlier this month, Vikas Khattar joined domestic investment banking firm Ambit Capital after 20 years with foreign banks like Citi, Merrill Lynch, Morgan Stanley, HSBC and Jefferies. In July, Anjani Kumar moved in as managing director of boutique domestic investment bank O3 Capital after two decades of a global career in multiple geographies with foreign banks like CIMB Securities, ABN Amro and RBS. Khattar and Kumar are among several investment bankers making a move to domestic platforms as the appeal of plum jobs at foreign banks fade while domestic outfits become attractive with the promise of expanding opportunities.More than three dozen such executives have moved to domestic outfits in the last one year, said industry experts.“There is an increasing inclination among clients to work with domestic banks and India specialists. Domestic investment banks have continued to invest knowledge and time in understanding companies and building relationships with a wider base of Indian companies,” said Ramesh Srinivasan, chief executive officer of Kotak Mahindra Capital Co.“Indian investment banks have also stitched up strategic alliances with foreign groups to offer full service to clients,” he said. The overall investment banking activity has improved in India over the last three years in terms of fees and revenue. Good capital market activity, M&A and an upswing in private equity syndication.“The resurgence of ‘domestic acquirer and the new listings of emerging gems from India in particular make domestic investment banks more relevant. This makes careers at domestic investment banks an interesting proposition,” said Srinivasan.Satyen Shah, head of investment banking at Edelweiss, which has made several senior level talent acquisitions from global banks, said: “Domestic firms have attained critical size and scale. The quantum of deal flow in domestic banks is lot more than in foreign banks. If someone wants to be in the thick of action foreign banks could be restrictive. Local outfits that have grown and are expanding teams offer much more growth opportunity.”Some domestic investment banks are part of a financial conglomerate or group which makes them offer wider product bouquets to clients. In contrast, some foreign investment banks have shrunk their India footprint for various reasons.Only 185 out of a pool of 900 investment bankers in India are from global banks, according to data compiled by domestic executive search firm Vito India Advisors. From 2007 to 2018 there has been steep erosion in the headcount of global bankers from more than 500 to 185, while domestic bankers’ headcount has increased 15%, data showed.Domestic banks such as Kotak Mahindra Capital, JM Financial, HDFC Bank, Edelweiss, Avendus, Ambit, O3 Capital have gained some of the brightest talent at the expense of foreign entities like Standard Chartered, Deutsche Bank, Jefferies, HSBC and BNP Paribas, among others.Earlier this year, Harpuneet Singh left HSBC to join HDFC Bank, Puneet Renjhen moved from Standard Chartered to Avendus, Anant Sinha moved from Standard Chartered Bank to SBI Capital Markets, Ravi Kumar Kesavan moved from BNP Paribas to Edelweiss, Anshul Aggarwal left Rothschild to join Avendus, Shitij Kale moved from Citigroup to Adani group.“Greater flexibility offered by domestic platforms as regards dealthresholds, and more autonomy to operate, limited internal approval chain are some of the reasons leading to the shift,” said Swati Saboo, head, investment banking hiring at Vito India Advisors. A senior banker who moved to a domestic outfit after more than two decades with global entities concurred.“Foreign banks are sometimes restrained by their strategy at the parent level with a minimum fee criterion and deal size and any aberration would require approval from global committee.”In the last 3-4 years, domestic banks have been able to take a lot of client share as several global banks have either scaled down or shifted focus to big ticket transactions in India and other emerging markets. From 2012 to 2018 there were 250 exits and layoffs in investment banking functions of global banks in India while there were only 80 lateral hires, Vito India data showed.“Going ahead, this trend will continue as transactions grow in emerging markets like India, while domestic players keep scaling up,” said Reet Bhambhani, partner and lead banking and financial services practice at EMA Partners India.From an individual perspective, many Indian banks ’ stock price and ESOPs have benefited employees. Global banks, typically, have a higher cash or fixed component but have been unable to reap the benefits of the run in the Indian stock market the way the local banks have done.“Domestic banks also offer longterm wealth creation opportunity in the form of stock options,” said Srinivasan. Additionally, many domestic investment banks may be able to offer employees job rotation opportunities within the institution, further improving the value proposition from a career standpoint.