India’s 2025 IPO Boom: Investment Bankers Earn ₹4,113 Crore on Mainboard Surge

The data confirms that 2025 has been a watershed year for India’s primary market—not only for issuers but also for investment banks. With lead-manager fees touching a record Rs 4,113 crore (versus Rs 3,463 crore in 2024), bankers reaped nearly a 19 % increase, driven by both higher aggregate IPO proceeds and larger deal sizes [1].

Mainboard IPO fundraising in 2025 hit Rs 1.75 lakh crore, up from approximately Rs 1.60 lakh crore in 2024, while the number of IPOs rose to 103 from 91 [2][1]. The SME segment also expanded—with issue count and funds raised both climbing significantly [2]. This reflects a deepening IPO ecosystem, where smaller and mid-sized companies are increasingly leveraging public equity markets as a preferred capital source.

The fee structure has evolved. While a decade ago many large IPOs were priced at 0.5-1 %, 2025 has seen larger mandates bearing fees in the 1-1.75 % range—reflecting growing investor participation, stronger pricing power for banks, and better secondary market conditions [1]. The increase is steeper for smaller issues, where percentage fees often reach 3-4 % to compensate for work-load and due diligence overheads [1].

Strategic implications are manifold. For investment banks, the current momentum warrants scaling up deal teams and strengthening execution capabilities—especially for Tier-2 bankers looking to capture slices of the fee pie. For issuers, cost of capital via IPO is higher, and negotiation of fee rates is more critical. For investors and regulators, the volume surge raises concerns about pricing discipline and aftermarket performance, especially among SME and mid-sized issuers, which may be more exposed to volatility [2][3].

Looking ahead: the pipeline for 2026 targets fundraising between Rs 3.5-4.0 lakh crore in the primary market [1][3]. Whether the fee pool grows commensurately depends on deal pipeline quality, macroeconomic stability, and whether built-in investor enthusiasm holds up amid valuation pressures.

Open questions to monitor:

• Will secondary market performance and listing gains sustain the elevated investor demand that underpinned deal absorption in 2025?
• How will fee compression, if any, affect economics for investment banks when mega deals slow down?
• To what extent will SME issuers’ weaker aftermarket returns (as observed) dampen retail participation going forward?
• Will regulatory changes or shifts in capital flows (domestic vs. foreign) alter the cost dynamics and structure of IPO mandates?