Career Paths after CA – IB and Equity Research

CA students often feel that the most testing time for them is before the Final exams. Although, in reality, it is after they clear Final exams and think about career opportunities ahead. There is generally a fair bit of confusion among many graduating students regarding some of the popular and more conventional career paths followed by most graduates. They often want to understand what the actual work entails or what the potential growth paths would be.  We attempt to share our two cents on some of the more aspired career options available to CA graduates and also explore some of the lesser known opportunities.

Investment Banking

Investment Banking (IB) is one of the most sought-after careers by finance graduates generally and CA students in particular. This is partly due to its representation in popular culture and largely due to the storied success that many senior bankers have enjoyed over the past few decades both in India and abroad.  We have tried to shed light on the day to day work as a junior member in a deal team and some useful recruiting strategies in our Investment Banking Section kindly refer to the articles and interviews there to get a well-rounded description of what it entails to be a successful banker in India.

Equity Research

CAs interested in public equity can potentially look forward to working with brokerage houses that are active in the Indian market.

Popular brokers:

• Global banks like Citi, JPM, GS, BAML, Nomura, CLSA and Jefferies.
• Large domestic brokerage houses like Ambit, Motilal Oswal, ICICI Securities, Kotak Equities, Edelweiss and Axis Securities.

Recruitment:

Generally unstructured given limited churn and small team sizes. Opportunities here will be driven by networking and connecting with folks from the industry to understand gaps in their teams and their staffing requirement.

Typical Work:

• Research analysts (“RA”) cover different public companies in India and share their views with the clients (generally institutional) that subscribe to the brokerage house for their advice or use them as a platform for executing trades.
• The RA forms a view on multiples aspects like industry attractiveness, earnings potential and provides an investment recommendation based on their analysis.
• The leg work involved in coming to an investment recommendation includes attending earning call transcripts, management meetings as well as engaging with multiple industry participants like suppliers, customers, retailers, distributors etc.
• As a junior member of the team, a candidate is typically tagged to a sector where they help the lead analyst with refining his research and staying upto speed with the market.
• Research analysts also interact actively with investors (mostly institutional like mutual funds, hedge funds, private equity firms, public investing funds, large family offices etc.) to share their research findings and point of view on the companies / industries they cover.

Growth and Mobility:

Growth is typically vertical within the firm. Candidates cover multiple sectors and different companies over time and get a well-rounded experience in the equity markets. Typical exits for junior and mid-level team members include buy side roles focusing on public equities like equity or debt mutual funds, PMS funds, wealth management firms, large family offices and equity focused hedge funds. Junior members may sometimes also exit into investment banking roles given the overlap in valuation skills required in both roles.