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| Normally, the job of an investment banker stops after a buyout deal is struck. But some bankers are going beyond this and making trading profits for the successful bidder on the chunk of shares bought in a target company. |
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| The investment banker trades in the shares on behalf of the bidder and is paid asset management fees, based on the profits made. |
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| Investment bankers manage to generate substantial profits from this practice, according to industry sources. |
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| Though more common among second rung investment bankers, it is gaining popularity with larger investment banks too. |
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| Kapil Bagla, senior vice-president at Centrum Finance, said advisory fees have fallen by 50 per cent over the last one year. |
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| In a bid to gain business, merchant bankers have reduced their fees drastically. From 8 to 9 per cent even two years back, the fees have gone down to below 1 per cent. |
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| According to reports, two investment bankers recently quoted a rate of 0.59 per cent for the divestment of a public sector undertaking. |
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| Prior to that HSBC had quoted a fee of 64 basis points for the disinvestment of Hindustan Petroleum Corporation Ltd. |
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Industry sources said:
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