Investment banks help public and private institutions raise capital.

Although many investment banks manage money for institutions and wealthy individuals, they are very different from "banks" that most people are familiar with. Investment banks do not have retail locations where they accept deposits and create accounts for the average consumer. Instead investment banks cater to companies and institutions, mainly by finding them sources of funding. Their services include arranging equity and debt offerings, providing credit facilities and "selling" securities to investors. They also advise institutions on a wide range of transactions, notably mergers and acquisitions, asset management and brokerage services. The clients of an investment bank benefit from the bank's access to investors, expertise in valuing assets and experience in executing transactions.. Investment Banking The Investment banking division (IBD) helps its clients to raise funds through debt and equity offering. This includes raising funds through an Initial Public Offering (IPO), offering a credit facility with the bank, selling shares to sophisticated investors through private placements, or issuing and selling bonds on behalf of the client. The division functions as an intermediary and earns its revenue by charging a fee. Clients benefit from the bank's access to investors, expertise in valuing assets and experience in executing these transactions. Often the bank will buy shares directly from the company and try to sell it at a higher price to investors. This process is known as underwriting, and is riskier than simply advising clients -- since the bank assumes the risk of the stock selling for a lower price than it had expected. Underwriting an offering requires the division to work with Sales & Trading to sell shares to the public markets. The division also earns revenue by advising clients on mergers and acquisitions (M&A), which involves evaluating the target company, negotiation the terms of the agreement and arranging the financing for the deal. The investment banking division is normally divided into industry coverage and product coverage groups. Industry coverage groups focus on a specific industry such as retail, oil, or technology. Product coverage groups focus on financial products, such as mergers and acquisitions, leveraged finance and equity. Functions of an Investment Bank Asset Management The asset management division manages money for institutions, such as mutual funds, and wealthy individuals. The business is divided into three sub-divisions. Fund management: This division manages a number of funds, each with a different focus and strategy. For example: the asset management division may have three funds, one focused on private equity investments in emerging markets, another dealing with arbitrage trades, and yet another that buys and holds corporate debt. Clients can choose to place their money with either of these funds. The bank earns revenue by charging a fee for assets under management, and sometimes by charging a commission based on returns.

Private Banking and Wealth Management: The division manages banking activities of extremely wealthy individuals. Apart from providing regular banking services, such as check clearing, the division also advise such individuals on tax strategy and investments. They work closely with other parts of the asset management division to provide a comprehensive service, e.g. work with fund management to invest in different strategies. Prime Brokerage: The division deals with professional asset managers, such as mutual funds and hedge funds. Their services include executing trades on behalf of these clients, holding custody of their assets, and advising them on potential opportunities. For example: When Berkshire Hathaway (BRK) needs to buy a certain security from public markets, it uses a prime broker to buy and hold the security on its behalf. The division works closely with the Sales and Trading division. Additionally, the prime brokerage can also help its clients (hedge funds) to find investors. Industry Analysis Investment bankers had been optimistic last year about their prospects for 2011. As the year draws to a close, its evident the optimism couldnt have been more misplaced, and bankers are keeping fingers crossed for 2012. The revenue of investment banks in India has declined to $515 million in 2011, down 30% from the $741 million generated last year, according to data from Dealogic Holdings Plc., a UK-based research organization that tracks deals. Equity capital market transactions slumped 67.26% to $9.76 billion this year and debt capital market volume fell 13% to $39.48 billion. Mergers and acquisitions (M&As) have dropped to $43.9 billion year-to-date, a 28% decrease from the record $60.7 billion announced in the same period of 2010. Capital and credit markets have not been as good as last year, especially in the second half, on account of high volatility, said Sughosh Moharikar, head of M&As at Deutsche Equities India. The Bombay Stock Exchanges benchmark Sensex has lost 23.26% this year, when foreign investors sold half a billion dollars worth of Indian shares, and the rupee has fallen 17% since July. Economic growth is forecast by the government to slow to a pace of 7.5-7.75% from earlier projections of 9%. The euro zone debt crisis and US economic woes have also cast their shadow on the country. Domestic M&A volume stands at $13.8 billion this year, down significantly from the record $45.9 billon announced in 2010, Dealogic data shows. This is also the lowest level since 2005, when domestic deal volume was $12 billion. Inbound M&A volume has reached $30 billion, slightly behind the record volume of $34 billion announced in 2007.

Some of the deals were affected due to more rigorous diligence sought by the investor. With the evolving macro and micro economic issues, performance has tended to deviate from projections provided by the company at the start of the deal, said Sailesh Rao, partner-transaction advisory services, Ernst & Young Pvt. Ltd. According to data from Bloomberg, the average deal size has shrunk from $6.2 million to $4.05 million.While not many bulge-bracket deals have taken place this year, mid-size investment banks have announced a large number of transactions. Outbound deal volume has shrunk to $10 billion this year, a 61% drop compared to last year. Foreign investment banks that had set up shop on an optimistic note in the past couple of years have started to lay off people in India. For instance, Nomura Financial Advisory Services India Pvt. Ltd, which had hired its senior team for investment banking only in the middle of last year, asked at least three senior people last month to leave. Barclays Capital, the investment banking arm of Barclays Bank Plc., which was looking to set up an equities team at the beginning of the year, realigned its India business, reducing the strength of its investment banking team. Other investment banks that have laid off people include Daiwa Capital Markets India Pvt. Ltd, Bank of America-Merrill Lynch and BNP Paribas SA. Bonuses at Indian investment banks, including Kotak Mahindra Capital Co. Ltd and JM Financial Consultants Pvt. Ltd, have taken a hit this year. Since the mainstay of the old Indian investment banks is equity capital markets, the outlook for 2012 does not appear to be positive. While it is uncertain how 2012 will pan out for the global and Indian economy, bankers expect the deadlock in deal making to ease next year. The desperation of promoters to raise capital will peak next year and we expect the deals to get executed at more rational valuations, Rao of E&Y said. List of Top 10 Investment Banks of India To name a few of the top most investment banks of India are:

Bank of America: This American bank, being one of the leading investment banks in the world, has even got its branches in the Republic of India. Operating in the country since the year 1964, this bank provides

a comprehensive range of financial solutions and products to some of the top most corporates, multinationals and financial institutions in the nation. Barclays Capital: This investment banking company is a division of the Barclays Bank Plc. Focused on meeting the needs of the Indian corporates, especially in the Small and Medium Enterprise (S. M. E.) sector as well as the companies of the country who have got a flair for international growth, this bank offers a range of cash management and investment products. B. N. P. Paribas: B. N. P. Paribas started operating in India from the year 1860 from the city of Kolkata in the name of C. N. E. P. (Comptoir National d'Escompte de Paris). Presently, they serve many domestic and international banks with their corporate banking necessities. Citi Bank: Operating in India for over 106 years, this is among the famous financial institutions of Citi Group. Besides offering different services related to investment banking, this investment bank provides varied banking services with a capital investment of about US $ 3.1 billion, which is spread all over the world. Deutsche Bank: Being a leader of investment banking in the global market, this bank has got a profitable cum strong client franchise in the private sector. They offer their unparalleled services to the financial sector in both the national and the international domain. J. P. Morgan: This leading bank in the world set up their operations in the country during the year 1930. This famous foreign bank specializes in the business of investment advisory services as well as wholesale investment banking.