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Lehman bankruptcy will hit IIM placements
Kalpana Pathak in Mumbai | September 16, 2008 02:20 IST
With America's fourth largest investment bank Lehman Brothers filing for bankruptcy protection and Merrill Lynch being bought over by the Bank of America, placements at the Indian Institutes of Management will be affected.
These financial giants have so far been the biggest recruiters from the IIMs especially from the institutes at Ahmedabad, Bangalore and Calcutta.These have been among the day zero firms on IIM campuses and have made plum job offers.
"We are sitting on pre-placement offers from these companies, which go invalid after this development. So, the students will have to go through the regular placement process and look at other companies," said professor Sourav Mukherjee, chairperson, placements, IIM-Bangalore.
The institute will write to these banks in the next few weeks to seek clarification on the issue. Last year, IIM Bangalore had received around 20 job offers from the banks.
IIM Calcutta has recorded 54 offers so far from these banking banks. Last year, IIM-C received 90 pre-placement offers. Students have been offered international profiles with BCG, Mckinsey, Bain and AT Kearney in the consulting sector and Merrill Lynch, Morgan Stanley, Lehman Brothers, Barclays, HSBC, Credit Suisse and Citibank in the investment banking sector. The institutes however, are not very enthusiastic of the banking and financial sector doing well on the campus this year.
"Banking giants like Lehman and Merrill have been the leading paymasters on our campus, offering crore-plus salaries. The confidence of students in the banking sector is collapsing with the bad news from the market," said an IIM professor.
The IIMs have decided to host new companies on campus. Many institutes have decided to invite smaller private equity players and wealth management firms. Unlike most years, the banking and financial services sector is not expected to be the best performer on campus this year.
"As of now, we have not heard of any tremors from the consulting sector so we are certainly pinning our hopes on the sector. The FMCG,marketing, manufacturing, trading and services sectors might also take the lead this year," added a placement official from an IIM.
Last year, IIM Ahmedabad placed around 45 per cent of students in the banking and financial sector. Around 37 per cent of students from the institute opted for a job in management consultancy. At IIM Bangalore, while 37 per cent students got placed in consulting jobs, 40 per cent opted for a career in the banking and financial sector.
Students are wary of joining investment banks. Says an IIM-A student: "IIM students are no more upbeat about an investment banking job and are finding these jobs risky. Moreover, there is a possibility of jobcuts in the industry following which offers from these banks are less likely to land up during placements."
As it is, investment banking had been losing status among students for the past year. Thus development will only accelerate the trend, students say.
Gowrish Prabhu, student co ordinator, post graduate programme for executives, IIM-A, says, "Having gained experience in specific areas, the executive programme students will not face any difficulty during placements since very few are interested in taking up jobs in investment banks and financial firms."
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