Introduction
Let’s be honest for a second.
If you're preparing for Investment Banking Interview Questions, especially in India, and you’re a freshly
qualified CA, finance graduate, engineer, or even from a law background-you’ve likely received a lot of “tips.”
Some are useful. Most are repetitive noise.
This isn’t going to be a copy-paste list of random questions. This is the stuff that actually gets asked, what
trips candidates, and how to prepare like a real contender. Whether you’re trying to break into a Big 4 deal
team, a boutique IB, or a global bank, this guide will help you approach interviews smartly.
What Do Investment Banking Interviews Really Test?
Let’s not sugarcoat it-investment banking is intense. You're expected to handle fast deal cycles, financial
modeling under pressure, and high-stakes discussions.
When they ask you Investment Banking Interview Questions, they’re looking beyond textbook answers. They want
to know:
- Can you think on your feet when the deal clock is ticking?
- Do you actually understand how deals get done—beyond theory?
Eventually, they want problem-solvers, not parrots.
Technical Questions: Where Most Candidates Mess Up
This is usually the first filter-and the toughest. If you're from a CA background, you know how to read
financial statements. But can you build a DCF model from scratch? If you're from a non-finance background, can
you explain how a $10 depreciation flows through all three statements?
Here are the most common technical Investment Banking Interview Questions with answers:
Q1: Walk me through a DCF.
Start with projecting free cash flows, discount them using WACC, add the terminal value, and sum
everything
to get Enterprise Value. Subtract debt, add cash, and you get Equity Value. Keep it logical and structured.
Q2: Why is debt cheaper than equity?
Because interest on debt is tax-deductible and debt holders take less risk than equity investors. Lower
risk
= lower returns expected = cheaper.
Q3: How does depreciation affect financial statements?
- Income Statement: Reduces profit since it’s an expense.
- Balance Sheet: Reduces asset value via accumulated depreciation.
- Cash Flow: Added back in CFO since it’s non-cash.
Q4: Difference between Enterprise Value (EV) and Equity Value?
EV = Value of entire firm (debt + equity – cash). Equity Value = What shareholders get after paying off
debt.
Q5: Logic behind a control premium?
Buyers pay extra over market price because owning control gives strategic power, cost savings, and
synergies.
Pro Tip: Don’t just read theory. Build at least one DCF and one LBO on Excel. Interviewers instantly
know who’s done the hard work.
Behavioral Questions: Where Offers Are Won or Lost
You can nail technicals, but if you can’t show you’re someone they want on the team, you won’t make it.
Common behavioral Investment Banking Interview Questions include:
Q1: Why investment banking?
A: Talk about the fast-paced learning, deal exposure, and finance-meets-strategy aspect that excites you.
Avoid cliché lines like “I love finance”-be specific.
Q2: Tell me about a time you handled pressure.
A: Use real stories-e.g., managing client deadlines during articleship or a tough project in college.
Highlight how you stayed calm and delivered results.
Q3: Describe a mistake and how you handled it.
A: Own it, show what you learned, and how you ensured it didn’t repeat. Interviewers respect accountability.
Q4: How do you deal with feedback or conflict?
A: Share a story where constructive criticism helped you improve. Show you can take feedback positively.
Q5: Why are you switching from audit or consulting?
A: Explain how your current experience gave you analytical skills, but IB aligns better with your career
goals in valuation and deal-making.
Market Awareness: The Most Ignored Section
Technical skills alone won’t cut it. You must know the market because bankers expect you to have a point of
view.
Typical questions:
Q1: What’s a recent deal you followed?
Pick 2–3 recent M&A or IPO deals. Explain why the buyer acquired the target, deal value, and strategic
rationale.
Q2: Your take on the Zomato–Blinkit acquisition?
For example, Zomato acquired Blinkit for hyperlocal delivery integration and cross-selling. Share both
pros (synergies, customer base) and cons (cash burn, competition).
Q3: Which sectors are hot in India right now?
PE investments in renewable energy, fintech, and healthcare are booming. Keep examples ready.
Q4: How are interest rates impacting IPOs?
Rising rates increase borrowing costs and reduce liquidity, slowing IPO activity. Falling rates usually
encourage listings.
Tip: Spend 10 minutes daily on Deal Street Asia, ETMarkets, or VCCircle.
If You’re a CA: Closing the Gap
You already bring:
- Strong accounting fundamentals
- Articleship/audit experience
- Exam resilience
But you might lack:
- Financial modeling practice
- M&A terminology
- Pitchbook storytelling
Action Plan:
- Do a basic modeling course (even free YouTube ones work)
- Build dummy DCFs on actual companies
- Use audit experience to explain risk analysis-even if it wasn’t an M&A deal
If You’re From a Non-CA Background: Make the Basics Solid
You may not have audit experience, but you can still crack IB if you:
- Learn financial statements
- Build DCF & LBO models
- Understand valuation logic
When asked “How did you build modeling skills?”, share how you used free resources to build a DCF on
Reliance
or HDFC. Shows initiative and curiosity.
Top Investment Banks in India You Should Know
Apart from global giants like Goldman Sachs and JP Morgan, also explore:
- Avendus Capital
- Spark Capital
- o3 Capital
- Equirus
- BDA Partners
- Big 4 M&A teams (EY, Deloitte, PwC, KPMG)
Each has a unique culture-some focus on pitches, others on execution-heavy deals.
FAQs on Investment Banking Interviews
Q1: What are the most common technical Investment Banking Interview Questions?
DCF walkthrough, depreciation impact, EV vs Equity Value, control premium logic, capital structure.
Q2: Do I need real deal experience to crack IB interviews?
Not as a fresher. But you must show you’ve followed deals, built models, and understand valuation basics.
Q3: How do I prepare for behavioral questions?
Use real experiences—pressure, mistakes, conflicts, leadership moments. Keep answers specific.
Q4: Is Excel modeling necessary for freshers?
Absolutely. Even basic functional skills matter.
Q5: How can I build market awareness?
Follow 2–3 big deals, read financial news, and practice breaking down deal logic.
Conclusion: It’s About Mindset, Not Just Knowledge
Cracking Investment Banking Interview Questions isn’t about perfect answers. It’s about:
- Structured thinking
- Real effort in modeling & market prep
- Staying calm under pressure
Spend 3–4 focused weeks, build 1–2 solid models, learn 3 deals inside out, and prepare your personal stories.
Show up curious, sharp, and coachable—that’s what banks look for.
Because interviews don’t just test knowledge. They test potential.
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