Investment banks earned a record $417 million underwriting fees for initial public offerings in India last year, reflecting a surge in stock listings and a gradual shift away from a business culture driven by low prices.
The average fee paid to bankers for IPOs rose to 1.86% of a deal’s value, versus 1.67% a year earlier, according to capital-markets data provider LSEG. That’s higher than the rate of about 1.5% in Hong Kong, Asia’s financial hub.
The fee increase came as first-time share sales in India climbed to an all-time high for a second straight year, thanks to a a swelling base of retail investors and steady institutional appetite, as well as regulatory efforts to make it easier for firms to list. The higher income also indicates a maturing local capital market, with companies willing to pay more for value-added service rather than basic deal execution, bankers say.
“The best companies are no longer hiring syndicates merely as distributors for a one-off transaction,” said Pratik Loonker, managing director at Axis Capital Ltd. “They are looking for long-term partners who can help shape the equity story well ahead of listing and support liquidity and ownership transitions long after the IPO.”
India ranked among the world’s busiest IPO markets in 2025, with firms raising about 1.95 trillion rupees ($21.6 billion), exceeding the previous year’s record of 1.73 trillion rupees, data compiled by Bloomberg show. The steady flow of deals has strengthened bankers’ pricing power after years of intense competition.
Axis Bank led the pack of IPO advisors, pocketing $34.3 million of underwriting fees, followed by Kotak Mahindra Bank Ltd. with $32.7 million. Other strong performers include IIFL Capital Services Ltd., whose fee income jumped 90% last year. Motilal Oswal Financial Services Ltd. posted a 396% surge.
Despite the latest improvement, on a global basis India “remains a relatively low-fee market, especially for large issuers,” said Axis’ Loonker.
Analysts are pinning hopes on a larger share of more standardized IPOs this year to generate a further increase in fee rates. A strong pipeline of deals may also lessen the need for aggressive fee discounting, helping restore pricing discipline across the market.
“A healthier pipeline has reduced the pressure to win mandates on price alone, supporting a more balanced approach to fees,” said Raghuram Kasiviswanathan, who heads IPO advisory at Uniqus Consultech.
