IPO Market on Fire! Investment Bankers Eye Big Payday as Fundraising Soars – Vodafone, Go Digit, Brainbees, Premier Energies Lead the Charge

The Indian stock market is seeing a lot of action in FY25, with many companies launching their Initial Public Offerings (IPOs) and follow-on public offers (FPOs). This has created huge opportunities for investment bankers, who have already earned close to ₹1,454 crore in fees in just the first half of this financial year. For comparison, they earned ₹1,685 crore for all of FY24. This amount does not include money earned from Qualified Institutional Placements (QIPs) and block deals that have also taken place this year.

Big IPOs on the Way

Some large companies like Hyundai, Swiggy, Afcons, Waaree, and NTPC Green are expected to bring their IPOs in the second half of the year. This could push the total money raised through IPOs alone to over ₹1.5 lakh crore by the end of FY25. Investment bankers are expecting a very profitable year, but a market downturn could impact these numbers.

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So far, 41 companies have raised ₹69,365 crore through IPOs between April and September, surpassing last year’s total of ₹61,922 crore. Another ₹64,725 crore was raised through QIPs in the same period, compared to ₹69,306 crore in FY24.

Vodafone Idea Leads with Highest Fee

Vodafone Idea, which raised ₹18,000 crore through a follow-on offer, paid the highest fee this year at ₹287 crore. Ola Electric, after raising ₹6,146 crore, paid around ₹145 crore in fees to its lead managers. Other companies like Brainbees Solutions, Premier Energies, and Go Digit General Insurance have also paid large fees, ranging from ₹70 crore to ₹96 crore.

IPO Market Expected to Stay Strong

According to investment banker Ravi Sardana, as long as the overall stock market performs well, the IPO market will continue to grow. Many large companies and unicorns (privately owned companies valued at over $1 billion) are still preparing to go public, which means more activity and profits for investment bankers.

Even though the fee percentage charged by bankers has only slightly increased, the size of the deals has made the actual fees collected much larger.

Growing Interest in Investment Banks

The surge in IPOs has also attracted investors to investment banks. Avendus Capital is preparing for a stake sale, with major private equity firms like Carlyle, Mizuho, Nomura, and Premji Invest interested in buying in. Reports suggest Avendus Capital’s value is between ₹5,500 and ₹6,000 crore, which is about 3.5 times the return on KKR’s original investment in 2015.

Additionally, DAM Capital, another Mumbai-based investment firm, recently filed for its own IPO. The company has quickly moved up in the rankings of top investment banks in India, now holding sixth place for handling IPO and QIP deals.