Why so many Companies Are Missing Out On investment banking opportunities in India?

Investment Banking Opportunities in India

In India, banking typically falls under the State category and banks often do not qualify as investment banks. But in the past few years, banks are bringing out various investment banking products to build their business. 

Many Indian companies are struggling to take advantage of those opportunities. Most of them are undercapitalized and because of the complexities in the investment banking business, they can miss out on chances to grow and reach their potential.

On the other hand, Indian companies face severe competition from foreign banks. Many large international banks who have established their offices in India have an advantage of having an understanding of Indian businesses and investors.

They are in a better position to get crucial information and invest in the best company. The lack of investment banking experience among Indian companies limits their potential to take advantage of the opportunities available in the banking industry. Let’s drive deeper into the Investment Banking Opportunities in India.

Indiabulls Financial Services (IBFS) is an example of an Indian investment banking company that has an in-depth understanding of the investment banking space and has an opportunity to take advantage of the opportunities present in the market. 

The bank offers a full range of investment banking products to its clients including merger and acquisition advisory, strategic advisory, equity/debt issues and debt/capital raising, strategic risk advisory and event management services. 

The bank offers high level of expertise and market exposure. IBFS’s investment banking business has expanded rapidly. The bank has raised large capital and completed several mergers and acquisitions in the past few years.

Other Indian companies like HDFC Bank Ltd. (HDBKF), ICICI Bank Ltd. (ICBKF), IndusInd Bank Ltd. (INBKF) and HDFC Ltd. (HDFC) have established themselves as prime investment banking players in India.

ICICI Bank Ltd.’s investment banking operations continue to thrive and expand. The bank has a vibrant and capable team of investment bankers that offers a wide range of investment banking services to its clients. 

In comparison to other investment banking companies in India, ICICI Bank’s investment banking portfolio has significantly grown over the years.

Banking Startups With Focus On Investment Banking Opportunity

During the past few years, several startups have emerged from India with a focus on investment banking opportunity. The best example of such startups is Karthik Reddy’s Tango Finance. 

The startup uses the full range of investment banking opportunities to raise funds for its clients. The startup focuses on opportunities that have significant growth potential. 

While some of the traditional investors prefer to invest in growth opportunities with a healthy amount of profitability, companies like Tango Finance focus on innovative investment opportunities.

While most of the startups focus on consumer lending, the startup focuses on higher risk lending. The startup targets small and medium businesses in the space. 

It offers investment opportunities in India as a high-growth sectors like renewable energy and infrastructure. The startup’s focus on special situations and alternate investment opportunities is a key factor in its ability to attract high risk lending opportunities.

Other startups focused on investment banking opportunity include Capbridge, Elevin Investment, Plan2Profit. These startups have taken a different approach to investment banking services. 

Their focus is to help investors take the best opportunity in the market and convert that opportunity into investments. 

By providing these high risk loans to small businesses, the startups help investors take a high opportunity opportunity in the market and convert that into investments in high potential companies. The startups offer advisory and other services.

The potential to gain investment opportunities from these startups could be a key differentiating factor for them. On the other hand, banks offer the chance to expand their investment banking business.
There are many more opportunities in investment banking. It is an important segment for investment banking companies and a good business opportunity for startups.

What is the future of Investment Banking in India? [Updated 2021]

The Future of Investment Banking in India is incredible. A major investment bank and a credible international bank in India will generate investment opportunities for both multinational banks and their clients. 
They will be able to invest more of their capital and expertise in the form of acquisition loans and trading investments.
Just as the investment banking arms of some companies are generating spectacular growth rates, there are those investing companies, who offer their customers financial instruments, which are a fraction of the value of the investments they actually generate.
The banks know that one way or the other, the investment banking units of some companies will be out of the investment banking business altogether. 
So the banks are forming and investing in themselves and their partners. That’s the only way out for investment banking units of multinationals, who are losing more and more of their revenues to investment banking.
It is only a matter of time before the investment banking arms of banks will have stronger scale and better opportunities for the use of their investments for creating investment opportunities and thus, helping the companies in acquiring their investments. It will be a positive development for all financial services companies in India.