Investment Bank

An investment bank is a specialised financial institution that provides a range of sophisticated capital markets services to corporations, governments, institutional investors, and high-net-worth individuals — primarily focused on facilitating the issuance and trading of securities, advising on mergers and acquisitions, and providing research and market-making services. Investment banking activities broadly fall into two categories: origination and advisory (helping companies raise capital through IPOs, QIPs, NCDs, and rights issues; advising on M&A transactions, restructurings, and leveraged buyouts) and trading and markets (making markets in equities, fixed income, currencies, and derivatives; executing large institutional orders). In India, SEBI-registered Category I Merchant Bankers perform many investment banking functions — including managing IPO processes as Book Running Lead Managers (BRLMs), conducting due diligence on DRHP filings, and advising on open offer obligations under the Takeover Code. Major global investment banks operating in India include Goldman Sachs, Morgan Stanley, JP Morgan, and Citigroup, alongside domestic powerhouses like Kotak Investment Banking, ICICI Securities, and Axis Capital. For Indian equity investors, investment bank research reports and IPO recommendations are widely followed — though investors should be aware that investment banks managing an IPO have an inherent conflict of interest in their research coverage of the same issuer.