Wait for bonus gets longer for investment bankers
According to investment bankers, the payouts at the end of 2012 were marginal, considering that the year did not see many mergers and acquisitions (M&As) and only a handful of initial public offers (IPOs), which offer thin margins due to tough competition.
Further, while the government has been able to tap the market with a couple of successful stake sales, the deals do not net any commission to the bankers as the fees are near-zero.
“Even if someone got, say, around 8-10% of their CTC as bonus, he should consider himself lucky,” said a banker with a foreign entity. “There were hardly any notable deals this year and, so, income was subdued. The only saving grace was the large number of blocks that got us a decent amount of commissions,” he said.
Interestingly, 2011 had seen investment bankers pocketing a large share of their income through block trades. The year 2012 saw some foreign institutional investors (FIIs) and private equity players making exits from banking stocks through block trades.
Meanwhile, 2012 saw only 11 companies hitting the capital market with IPOs, out of which two were withdrawn. Bharti Infratel and the Multi Commodity Exchange (MCX) were the two large issues of the year, but the sheer number of bankers involved in each of the
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