INSIGHT, IIT-BOMBAY PRESENTS : THE INTERNSHIPS LIVE BLOG

I was really surprised by the fact that an internship/project in IITB could be tremendously fun and a brilliant learning experience. While everybody else was busy traversing greener pastures in Europe, I was working (also, chilling at Prithvi with batch mates) on my project in IITB. Everyone around me thought I was demented to do an internship in the Institute especially since I had been to ISB and LSE the previous summer.

The reason for my staying back in the Institute was largely due to the following factors:

a) My department made it compulsory for us to do an aero-internship and I didn’t have the guts to get a “farjee” or a fake certificate.

b) My professor made me an offer I couldn’t refuse; he said to me  — “You complete this project and you will definitely have a publication to your name”. This got me carried away and I started building castles in the air with thoughts ranging from how future generations would search for my name on Scopus for my research work, to how I actually contributed positively to the field of science after 3 years in IIT. Primarily it was about the fact that I could enjoy how much ever I wanted and do work at my own speed with no pressures and tensions.

My professor made it very clear in the first week that I could work as much as I wanted and that there was no need for a hurry.  While most people would see this as the opportunity to cut slack and relax, I took this opportunity to learn and sharpen my skills as much as I possibly could.

The project was titled “Flame propagation in radial micro-channels” and dealt with simulating flames in radial micro-channels. The projected involved numerical methods, coding on C++ and usage of plotting software (I used this brilliant plotting software called DPlot). The numerical method used for the simulation was the Predictor-Corrector method and I had used it for 100,000 grid points for varying time cycles ranging from 10,000 to 50,000 time cycles. I had initially worked on a 1D case and then perfected the code so that it could be implemented for a 2D case. While coding for the 1D case was easy, the 2D case was tricky and I had to use all the help I could get from the few CS junta to make the code efficient and look better. Eventually code ran without glitches and generated interesting results which are being investigated further and I will be working on this through the current semester.

This was my first attempt at research and I enjoyed it. This was largely because of the  stress free environment I got to work in and also because of the continuous motivation from my professors’ end. Contrary to most peoples’ belief that the institute is a “boring” place to work in, I found it to be the best place to work in.

In addition to the work, I spent countless hours watching plays in Prithvi, on a couple of treks, lazed around, chilled with friends and went to town every weekend. It was possibly one of my best summers.

Since Rohit has already written about most of the stuff that I am writing about, you might want to read this in conjunction with his piece.

An internship is that summer when your seniors suddenly transform from lukkha geeks into bonafide been-there-done-that studs, bursting with fundae, money, and for the lucky ones, PPOs. Case in point.

My 2 cents.

Where?

Barclays Capital, Mumbai.

How?

They came. They interviewed. And in a moment of colossal stupidity, they chose.

What?

Investment Banking, duh.

Ya, right.

Investment Banking is banking for the rich. That’s how somebody explained it to me, before the aforementioned interview, and I did not believe it. It could not be. That so many bright people led such glamorous lives of glorious debauchery doing such simple, mundane work. I cooked up several complex definitions over the last year, before coming full circle into understanding that I-Banking is indeed, banking for the rich.

• As an analogy with the regular bank people we meet, in I-Banking too, there are relationship managers, sales people and ecommerce platforms, that liaise with clients - corporates, governments, institutional investors, wealth management companies, hedge funds and other I-banks. Making gross simplifications, as with normal banks, these clients are looking to either a) Invest  money they already have or b) Get money (loans) to invest in plans they already have. What Ibanks do is try and move money from a) to b).

• As with banks, there are those people who help the sales people in suggesting a loan/product that would fit the client’s needs - the sales and structuring departments.

• And finally, actually executing the product. IPO, Bond Issuance in case of a loan (Category b). Trading in liquid markets such as equities (stocks), foreign exchange, other commodities,  in case of investment (Category a). Trading is done in the market in such a way that the clients get their required returns; The way in which it is to be traded, is decided by the structurers. The actual trading is done by, well, traders. Traders have some of the toughest and most stressful jobs in the industry. In very liquid markets, prices move very rapidly by the clock tick and trying to maintain a position, booking profits needs quick decisions, some algorithmic strategies, a good sense of the underlying economics, and common sense.

Is that all?

No. The above departments make-up the so-called front office of I-banks. As with any other bank / company, you would need an army of  people - the so called middle and back office.

• The operations guys - who actually execute all market orders, book trades, after sales/trading has given the order
• The product control guys - who check that nobody’s cheating the company
• Compliance/legal  - headmasters who ensure we are within bounds of the law
• IT - the software guys,
• Risk management - who’ll tell us whether or not we can take the risk of doing a particular deal with a particular client etc. etc.
• Research - who publish research reports for clients

Also, due to oversimplifying, I might have left out quite a few departments which do not come under broad classifications, one key example being Mergers & Acquisitions (M&A)

So, where’s the big deal?

The amount of money, and the increasing complexity of products, is mind-boggling. With clients looking for smarter ways to invest more money, Ibankers came up with ideas to create extremely complex and sometimes outrageous products. This coupled, with the fast paced deal-to-deal based style of working, as opposed to a research or process based style, has led to a projection of glamour, riches, brains (not always - as seen in the recent credit crisis) and even a sense of mystery in media and peer groups.

Where do IITians come in?

IITians’ quantitative analytical skills make them ideal for the complex structuring and other trading based jobs, especially if the products in question are exotic derivatives kind of stuff. The job could include use of stochastic modelling of stock markets to predict returns, find probabilistic future payoffs for a product bought now, and models to calculate the fair price of a product. Or analysing data and using models and extrapolation to come up with research reports. Or building algorithmic trading strategies.

I worked in the Equity Derivatives Group as a structurer. My main project was to analyse feasibility and pricing a class of options (a type of derivative) called cliquet options using 2 mathematical models and suggest changes to adapt them to NIFTY. Cliquet options are  not sold in India currently. At the end of the project, I was to suggest a model to use to price and sell cliquet options on NIFTY in India. I had to make sure that the price wasn’t too conservative (too high), making it unsaleable or too competitive (too low). I used models used in Korean and UK markets and used a sort of trial and error method to come up with modifications. To test them, I applied the models to NIFTY historic data to come up with a safe fair price.

Lessons from the experience?

A lot. In terms of soft skills, life-lessons, this internship went a long way. If I had to enlist -

Professionalism - The foremost quality that any intern working in a decent professional environment would talk about. Keeping deadlines, working steadily and smartly instead of last minute night outs, rolling out complete usable-saleable deliverables, as opposed to half baked projects we do in IIT. A simulation of real-life corporate pressure if you are not delivering. Professional conduct and communication.

A lot about finance.

And the 2 most important tools in similar firms - Microsoft Excel and Microsoft Powerpoint.

Barclays as an experience?

Great. Barclays has in the past recruited for the Singapore IT office. Given that both of us were not very enthusiastic about the IT profile, we were lucky to be placed in a front office position.

There was a lot of time and money invested into our learning - there’s a two day training in investment banking from a reputed educational firm in the field in Singapore. A flat hierarchy meant that we got to interact with everybody upto Managing Directors, who not only gave a great bird’s eye view of the economy but also acted as guides in choosing career paths. The projects are actual products they are looking to sell and were great learning opportunities to understand the field and also know the state of the market. It was overwhelming to understand how such a huge globally spread behemoth works. For our projects, we could be talking to anybody from New York to Hong Kong to Tokyo on different days. Everybody is willing to take time out to help an intern.The best part, for me, was the people that we interacted with - some of the smartest, talented and most humble people who treated us with a lot of respect.

And it pays well.

Buzz Rohit, if you have any doubts. Apparently he is entertaining questions.

Why??

After having huffed and puffed my way through daunting shop floors and mundane assembly lines, all in the quest to complete the mandatory 8 weeks of practical training in a relevant organisation, I knew, beyond any doubt, as Moti said, what I DO NOT want to do in life. Sometimes, given the wide plethora of avenues that we would fit in, knowing what you DON’T want is also just as important. Now, given that engineering/tech/core companies were out of question, I jumped into the whole “Financial Bandwagon”, and if given the opportunity, was more than willing to give it a try. I did not know what to expect, but then I knew that it would be challenging, no doubt.
So here I am.

For the sake of completeness (Yawn!!)

Now IL&FS stands for Infrastructure Leasing and Financial Services, and I am in the Debt Syndication group, in the Financial Services section. The company, on the whole provides technical and financial advisory services for infrastructure projects, across most sectors. Mine would come under the umbrella of Corporate Finance.
For any project, from a financier’s perspective, apart from arriving at the budget estimates, a lot of thought goes into how the project would be financed. This would primarily be done by either borrowing Debt (loans from banks, etc.), or raising Equity (through an IPO, etc.). The Debt Syndication group does the valuation of debt pertaining to how to borrow, from where to borrow, multiple borrowings, the repayment structure, and risk mitigation.

On the job

The first question that my boss asked me on my very first day was “Why finance while still in engineering??” which was quite ironical considering that he too had an engineering background. Now this is a question that a lot of us would face if we consider this as a career option. So rather than beating around the bush, it’s better to be frank outright. He knows it, you too know it, but just that he wants you to acknowledge it.
One thing that you’d notice at such a workplace (apart from a fairly unbiased sex ratio :P), is the excessive use of “MBA” jargons, even for the most trivial things. Coming to the work, I was asked, atleast over the last 2 weeks, to analyse road and highway projects (that was what was available :P), go through past reports (“Information Memorandums” as they call it), look into the “financial modeling” part(excel spreadsheets with complicated formulae), which was quite interesting nonetheless, and look out for “business development opportunities ” (nothing more than intelligent Googling). Another thing I realized is that finance doesn’t really involve a lot of coding as I had initially expected. Rather what is required is good “quantitative analytical” thinking (basically just an extrapolation of the maths that we have learnt), though knowledge of statistics is desirable.
One thing however that I’d like to mention is that if ever you are entering a completely different field (such as finance), from engineering, it is always better to ask beforehand, what is expected of you, if possible, even meet with the relevant people you would be working under before you join, and if there is any prerequisite reading/knowledge/skill set required, so that you don’t waste time at work reading stuff that you would have rather done at home. As I was pretty lax in this regard, most of my initial days were taken up by reading the basics of corporate finance, like how to read balance sheets, income statements, etc.
However, all said and done, as far as adaptability and aptitude is concerned, it’s really not “Rocket Science” that we are dealing with, and should hence be manageable by all of us.

The Workplace

The workplace, I must say is absolutely stunning. Since I work at the Head Office at BKC, makes it even grander. The lobby resembles more of a hotel lobby, with a CCD parlour on one side, and a library on the other.
The people you meet here are a set of highly motivated workaholics. Though “official” working hours are from 9 to 5:30, I was in the awkward situation of being the first to leave on my first day, that too at 6!!!! With small working groups and targets to meet, nightouts at workplace is not uncommon, atleast when the days were good. Now ofcourse things have slowed down a little. Even my fellow interns, most of them having finished 1 yr of their MBA, are highly averse to katoofying lukka. So I don’t have much of an option there. On the plus side however, weekends are off.

General Observations

• I strongly believe interns do have a LOT to offer to any organization and would not be wise to think otherwise. If you believe that you have nothing to offer to the organization, it’ll be reflected in your work, and you will ultimately be viewed as a liability.
• Its not the Aptitude, but the Attitude that matters. Initially you might be given menial and “mentally non stimulating” tasks like googling for stuff and doing menial calculations. But workplace demands professionalism and is expected in whatever work you do, however insignificant you think it is. Simple things like being punctual and well turned out makes a huge difference.
• Take constant feedback. Constant interaction with your boss can be really useful. It is understood that he’d be a busy man, but maybe not busy enough to even spare 5-10 mins a day with you. If you ask for it, he might even engage in a candid conversation with you sometime. Also the HR department is a good source of feedback, as in most cases they themselves take feedback on you from your boss. Also ask pertinent questions like what qualities do they look out for whilst interviewing candidates, to get an inside perspective.
• Talk to as many people as you can. Try to gather whatever you can about the company, in every aspect. Also try to get in touch with IIT alumni working in the company. Linkedin is very useful (as I am finding out ) in that regard. They would be the BEST people to talk to.

Signing Off

At the end of it, based on what I have seen till now, I’d definitely give it a thumbs- up. Agreed that you have long and uncertain working hours, agreed that it’s really not in the field of study, but I believe this is a grind that is worth it. You wouldn’t really know whether you liked something or not unless you tried it out. But in the process of trying it out, wouldn’t you rather give it your best shot anyway???

Yeah, I know. Funny name. Let me make a few things clear at the outset. The only reason I’m doing this internship is to fulfill the eight week requirement set forth by the institute. And how do I motivate myself to work? I want to ensure, by the end of my internship, that I know for sure things I DO NOT want to do in life.

So, moral of the story from the first two weeks, before you set out to get an intern, its important to know what you want out of it. I had no idea what SP did when I opted for it. It was only later that I realised that this firm was your local thekedar(contractor)-on the >30 crores scale.

Within the first hour, I was told I was in the wrong firm, given my structures major(I’m a Civil+Structures DD). But then, they were thinking I was serious about it :D. So anyway, this firm basically comes in when all the designing has been done, all the awesome visualisations of breathtaking structures made. When I say we put foundations to their castles made in the air, I’m not off the mark.

I spent my first week in the Tendering and Contracts department at the SP Head Office(Which btw is down the Road from the Taj Mahal Hotel, facing the sea, and has a breathtaking entrance). I pored over contracts and guidelines over and over again, which typically run into seven or eight books of two hundred pages each. I was supposed to read all of it. And read and read and read…I did so religiously for the first one and a half days of my intern. And then I started sleeping in a posture which, to everyone else, would look as though I was deep in concentration.

For most companies, interns aren’t important. And no one gives a *fish* about what you’re doing. Mostly, not even your boss. You have to be interested in what you’re doing. Otherwise its going to be one big bore. The onus is on you to go and pain people, ask them questions, not get cowed down when they kataofy you. Especially when they don’t pay you.

My case was the same. My overall training incharge, I must say, had planned things out really well though. But then, he was just going to play pick-and-drop with me. And I was going to have a new boss every week, in a different department. And in this dept., my boss, being the national head, had absolutely no time. He was there at 9(an hour before office time), stayed in his seat and worked during lunch, and was there when I left at 6.30. In fact, with his awesomely round figure and his perfectly snug fit with his chair, he seemed as though he was a part of their furniture at SPCL!

Traveling by locals wasn’t half as bad as I’d anticipated you know. You get on a train before 8.30 and catch a Thane bound slow one in the evening…you just don’t get any traffic on the way! And BEST is truly the best public transport system I’ve ever come across. Buses to and from everywhere!

All in all, dressing up in formals, getting them crunched in locals and buses, getting to work and willing the hours to pass themselves, waiting for the clock to strike 6.15-that was my average day. People at work were, well, they weren’t the brightest of the lot you know. I know I’m biased when I say this, but common sense is a rare commodity.