The Alumni Blog team interviewed an alumnus working with Nomura Group to give our final years a quick look into Finance as a career choice. This article hopes to prove insightful on Placement Interviews, Skill Sets and Expectations.
Following is the gyan that Ravi Teja “Saruku” Kanneganti (Batch of 2012, Civil Engineering) has to share on why he chose Nomura!
Choice? Being from the Civil Engineering Department, I knew I had to focus on non-core as there were not many core companies visiting campus in the years leading to my placements. Of the non-core sectors, considering my average CGPA and extra-curricular’s, I did not want to focus too much on consulting. FMCG was not an option for civil department. I was left with Finance and Analytics, which I chose to pursue. That way, my choice of finance wasn’t actually a choice! Apart from a fair amount of reading on banking business and understanding basic concepts of finance, the preparation for both sectors was broadly the same for me.
How can you make a choice (if you have one)? The unanimous answer for this question from most of us would be: “Think about what you really want to do!” This, most of us say, without understanding that you (a 4th/5th year) know little about what people in these sectors ‘actually’ do. It becomes your responsibility to try and understand what constitutes a typical day at office in each of these sectors. My point is that it’s not right to decide what you want to do unless you know whats being done in the choice of work places that you have. Hence, a good amount of time must be spent in your conversation with seniors trying to understand the nature of work. As many roles out of India offices have a specific well defined role in a small area of finance/analytics, you will also need to ask broader questions on the nature of work in the industry and not about his/her work alone. This will also help frame answers (linking them with your learning’s from those conversations) for the HR questions that almost all companies will have. I have tried to provide an overview of my industry (banking) as an answer below.
2. What is it that you picked up from IIT Madras that offers you an advantage?
I use this question to highlight the advantages that IITM offers during your 4-5 year stint (more relevant than what I picked up from IITM)
Peer group: It becomes important to have a peer group (ideally people with similar shortlists) for your placement discussions. A lot of your ideas get refreshed/ reformed through these discussions. The fluency & clarity of thought that companies look forward to will only be acquired through these discussions. I suggest having discussions on a broad range for topics for some time everyday to teach & learn from peers. The set-up of IITs has this unique advantage of having talented and ambitious people in plenty.
Access to seniors: Seniors working in your target organisations would be the best ones to guide you through the requirements and path to prepare, to make it to the company. This holds true for your entire career and not just for the first job.
Skill enhancement: There’s tremendous amount of activity happening in IITM all the time starting from fests to Inter & Intra hostel events (list would only be incomplete if I don’t mention elections!). Success at IITM depends on how well you utilize these opportunities. Proving your mettle in any of these platforms (can be anything!) is a good selling point in your interviews!
Time & resources: The curriculum at IITM (at least in Civil department) offers a lot of free time. Even after watching a couple (not all!) of sitcoms available on LAN and playing on the Quadi every evening (you should!), I am sure you will find a lot of free time. Your stint at IITM would only be meaningful if this time is invested in utilizing opportunities and building skill sets. The LAN also has brilliant video lectures/e-books which form a key reference material for me even today.
3. What is your profile at Nomura? What are the general profiles for IITM hires?
- I work for the Global Markets strategy team (~25 people, 7 in India). My team is an in-house consult team that helps Nomura choose the course of action (product/region to invest/divest in etc.,) for its Investment Banking business by continuously evaluating and benchmarking the business with peers (like DB, JPM etc.,). This we do, apart from a lot of routine market updates and preparatory materials for senior management at Nomura.
- Nomura has hired students for Global Markets (my team is a part of this division) and Risk Management roles from IIT Madras in the past.
4. Could you also please give us an overview of the banking roles in general?
Banking industry has very broad set of roles, each differing substantially from the other. Many times, there are situations when it becomes difficult to explain your role to others on the floor, let alone freshmen. However, I tried to give a very brief description of the roles that are offered by various banks (I hope my friends and seniors will add to my views on this section in comments following the article):
Investment Banking Division (Includes Corporate Finance, Mergers and Acquisitions & Advisory, Debt Capital Markets and Equity Capital Markets).
Also called ‘primary’ side of banking. It is called so because this division mainly deals with advising clients in ‘issuing’ debt and equity in the market. (eg: facebook IPO is an equity issuance, General Motors $4.5bn debt issuance in Sep’13)
Nature of work in IBD: Desks in India will be constantly helping the onshore teams (based out of London, NY etc., where actual business is happening) in building presentations (also called pitches), models to value companies etc., which will ultimately be used as a part of presentation materials to client. These client interactions usually pave way for the final deal to fall in place.
Global Markets – Further divided into Fixed Income & Equities divisions
This is also called ‘secondary’ side of banking. It is called so as this division mainly deals with ‘sales’ and ‘trading’ of already issued debt/equity products that are already being traded in the market. (eg: building an index constituting Indian corporate bonds for clients who wish to take exposure to Indian corporate debt). Prime Services if often a smaller set-up within global markets. Brief description below:
Prime Services: Investment banks offer clients exposure to various equity or commodity underlyings, while hedging (neutralising the impact due to the exposure offered) their accounts. Teams here are responsible for managing the risk in such trading books, while coming up with optimum hedging strategies so as to maximize profits from such delta-neutral (hedged) positions. They also look at how best to utilize the large inventory at their disposal through various functions such as stock-loans (yes, stocks can be loaned out just like cash!), exchange-for-physicals (choosing to switch positions between futures and cash segments) amongst others.
Nature of Work in Global Markets: Desks in India support multiple functions to support the sales and trading activity onshore. Some of them are as follows:
Pricing/Structuring: You structure/price a product basing on clients requirements (eg: creating a product that will hedge dollar exposure for reliance). Almost all firms have their own structuring engines built on excel and we use them every day with a bit of our own creativity to build these structures.
Product Development: Many firms build proprietary indices (such as the index offering exposure to Indian corporate debt discussed above) which they would eventually offer to clients.
Research/Ideas Hub: These teams usually research and produce trading ideas which will eventually be sold by the sales people to clients.
Risk Management – All the banks have regulatory requirements that will need the bank to regularly report the risk being taken by the firm through risk metrics like Value at Risk. The following are the broad kinds of roles available in risk:
Methodology/Model Validation: These teams build and validate models to calculate various risk metrics for a bank. Roles are very mathematical and quant oriented.
Risk Reporting: These teams validate and store the data required for measuring various risk metrics. Also responsible for regular reporting for both self assessment and regulatory reporting of risk.
5. How should one prepare for the Nomura selection procedure?
Selection Procedure: It was a resume based shortlist, followed by interviews (should be the same this year). Numbers of rounds of interviews depends on the interviewer but you would usually have 2-3 rounds. One of them will be a HR round.
How/what to prepare?
Preparation for most of finance companies will be similar. The following is a broad checklist I would suggest for fin prep:
Puzzles: 400 puzzles PDF on placement server will be useful.
Basic of banking and finance: http://en.wikipedia.org/wiki/Finance is a great starting point. Reading through Financial Markets and Financial Instruments sections (links on the right side of wiki page) would be useful for some basic understanding
HR Preparation: Prepare a possible set of questions that can be asked and weave a storyline for each of these questions. Answering questions as they come is not possible for all. Answers will only be impactful if they are derived from real life situations you have encountered and your subsequent learning’s. This way, your answers are your own and will be different from the usual rant – “I am hardworking, sincere etc.”
Resume: Be thorough with everything you have written on your resume. Any fumbling while defending parts your resume will lead to loss of credibility of entire resume!
Current Affairs: I don’t think there will be questions directly on current affairs but being aware of what’s happening in the financial world will help a lot in interview conversations.
Acknowledgements: I thank Yahiya Hamsa (2012/DD/CE) and Sanjay R Menon (2012/DD/CE) for their inputs on Risk Management and Prime Services sections discussed above. Please reach out to me directly on email@example.com or post a comment below. Fortunately I am on vacation and will be able to answer at least some of your questions!
Ravi Teja “Saruku” Kanneganti was the Cultural Affairs Secretary (Literary) 2010-11. He was an active member in multiple student organizations and graduated with a Dual Degree in Civil Engineering in 2012.
(The views expressed here are those of the interviewee alone and do not represent the views of, or should not be attributed to, Nomura Group)