Indian companies raised $14 billion via IPOs and their i-bankers made $300 million in fees
- Investment banks earned a record fees of ₹2,600 crore through IPOs and FPOs in FY2022.
- Investment banks usually earn about 2-3% as fees for managing an IPO and 1.5-2% for QIPs.
- The largest IPO in the fiscal year 2022 was Paytm, which raised ₹18,300 crore from the public market.
AdvertisementThe fiscal year 2022 witnessed the public debut of 52 companies — some good, some bad and some that failed to leave a mark on the stock market ever since their listing. Amidst this influx of IPOs, it’s the investment banks who have emerged as the winners.
According to a report by PRIME Database, investment banks earned a record fees of ₹2,600 crore ($330 million, at current conversion rate) through IPOs and follow-on public offerings (FPOs). This is higher than the combined fees earned in the last four years.
Indian companies raised ₹1.12 lakh crore, or $14 billion (at current conversion rate), all through fiscal year 2022 that ended in March this year.
Source: PRIME Database
|Year||Capital raised in IPOs|
|FY2018||₹1.75 lakh crore|
|FY2021||₹1.88 lakh crore|
|FY2022||₹1.12 lakh crore|
|FY2023E||₹1.40 lakh crore|
Note: ‘E’ stands for Estimate
How do i-bankers charge for IPOs?
Investment banks usually earn about 2-3% as fees for managing an IPO and 1.5-2% for handling qualified institutional placement (QIPs). Due to this percentage, the fee would vary depending on the issue size and the number of bankers managing the deal.
The fees charged by investment bankers also vary from issue size with variable fees, and even discretionary fees paid by the fund raiser to its underwriters.
Citi, ICICI Securities, Kotak Mahindra Bank, Axis Capital and JP Morgan were the top investment banks who facilitated capital market issuances in 2022, according to a database from Bloomberg.
The largest IPO in the fiscal year 2022 was One97 Communications — the parent company of digital payments giant Paytm — which raised ₹18,300 crore from the public market, It was followed by Zomato’s ₹9,375 crore offering and Star Health with ₹6,019 crore – helping them collect an astronomical amount in fees.
|One 97 Communications||₹18,300 crore|
|Star Health||₹6,019 crore|
|PB Fintech (Policybazaar)||₹5,710 crore|
|Sona BLW||₹5,550 crore|
|FSN E-Commerce (Nykaa)||₹5,350 crore|
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