Merchant bankers earn more than Rs 220 crore as IPO fees in May

This assumes significance as the past few months have been rather subdued in terms of public issues, which in turn, affected the fee income of the merchant banking community.

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26 Aug, 2025 12:21

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For merchant bankers, the month of May turned out to be the best this year in terms of fees earned from managing initial public offers with the cumulative fee pegged at over Rs 220 crore — Rs 223 crore to be precise.

This assumes significance as the past few months have been rather subdued in terms of public issues, which in turn, affected the fee income of the merchant banking community.

The month of May saw a revival of sorts of the primary market with three main board IPOs — Schloss Bangalore (Leela Hotels), Aegis Vopak Terminals and Belrise Industries — grabbing many headlines. The IPO of Leela Hotels at Rs 3,500 crore was the biggest among the three, followed by Aegis Vopak that raised Rs 2,800 crore and Belrise Industries whose IPO size was Rs 2,150 crore.

In terms of fees, merchant bankers of Leela Hotels earned a cumulative fee of nearly Rs 83 crore, as per disclosures made in the final offer documents filed by the companies. The public issue was managed by a total of 11 investment banking firms — JM Financial, BofA Securities India, Morgan Stanley India, JP Morgan India, Kotak Mahindra Capital, Axis Capital, Citigroup Global Markets India, IIFL Capital, ICICI Securities, Motilal Oswal Investment Advisors, and SBI Capital Markets India.

In the case of Aegis Vopak Terminals, which saw five merchant banking firms managing the IPO, the cumulative merchant banking fee was Rs 77.3 crore. Belrise Industries, which had engaged a total of four merchant banking firms, paid a total of Rs 63.5 crore as fees to the investment bankers.

In terms of the fee as a percentage of the overall IPO size, it was broadly in the range of 2-3 percent, which is in line with historical industry averages. Interestingly, there have been some IPOs from the start-up or digital space wherein the merchant banking fee accounted for more than four percent of the IPO size.

Meanwhile, the overall cumulative expense for all the three IPOs was in excess of Rs 100 crore each, as per the disclosures included in the final offer documents. Apart from the merchant banking fee, the overall issue expenses include commissions paid to broking firms, fee paid to various entities including registrars, advisors, consultants, auditors, industry experts, and legal counsels among others.

Further, there are listing fees that need to be paid to the exchanges and filing fees that are paid to the Securities and Exchange Board of India (SEBI). Then there are expenses related to advertising, marketing and printing along with other miscellaneous expenses as well.