IPO Market: With the IPO market on fire, I Bankers prepare to celebrate a fantastic year

Mumbai: The Indian primary market is seeing unprecedented activity in FY25, setting the stage for record gains in investment bankers. In the first half of the financial year, I-bankers earned nearly Rs 1,454 crore in fees as lead managers of initial public offerings (IPOs) and follow-on public offers (FPOs), compared with Rs 1,685 crore for the full year prosecutor 24. . These figures exclude fees from qualified institutional placements (QIPs) and block deals that were recorded this year.

With big IPOs from Hyundai, Swiggy, Afcons, Waaree and NTPC Green expected in the second half, the primary market is projected to raise over ₹1.5 lakh crore through IPOs alone this financial year, positioning bankers investment for a boom year. Certainly, any slowdown in the market could put a dent in those numbers. The average commission in 2023 and 2024 was around 2.7%. Between April and September, nearly 41 major companies raised ₹69,365 crore from public offerings as compared to ₹61,922 crore in FY24. Additionally, ₹64,725 crore was raised through QIP between April and September. this year compared to ₹69,306 crore raised in the entire FY24. Bankers are optimistic about the prospects for the primary market as several large companies and unicorns explore options to go public, which could further boost activity in the primary market.

Vodafone Idea Highest rate paid
“FY25 could be a blockbuster year for the primary market, benefiting corporates, shareholders, investors and bankers,” said V Jayasankar, CEO of Kotak Investment Banking“The IPO pipeline remains very strong, with high-profile, quality issues expected to be launched across sectors this quarter, potentially generating Rs 700-800 crore in fees for lead managers.”Vodafone Idea, which raised Rs 18,000 crore through a follow-on offering, paid a fee of Rs 287 crore, the highest in this fiscal year. Ola Electric, after raising Rs 6,146 crore, paid around Rs 145 crore to senior managers. Others like Brainbees Solutions, Premier Energiesand Go Digit general insurance has paid fees ranging from ₹70 crore to ₹96 crore.

According to Ravi Sardana, an investment banker, the push for IPO market It is expected to continue as long as the secondary market performs well, with numerous large companies and unicorns still waiting to launch their public offerings. “While the percentage of fees collected by investment bankers has only seen a marginal increase, the size of these deals has made the absolute value of fees collected quite substantial,” he added.

The rise in IPO activity has also sparked investor interest in I-bankers, with a stake sale in Avendus Capital in the works and plans for a listing by DAM Capital. Reports suggest that several top private equity firms such as Carlyle, Mizuho, ​​Nomura and Premji Invest, among others, are lined up to buy a stake in Avendus Capital.

According to media reports, Avendus Capital’s valuation has been pegged at ₹5,500-6,000 crore, which is about 3.5 times the return on KKR’s investment in the company in 2015. Mumbai-based DAM Capital filed recently a red herring draft prospectus for an IPO. In just three years, the company jumped from 13th to 6th in terms of IPO and QIP transactions.