India's IPO market achieved unprecedented heights in 2025, with companies raising a record ₹1.95 trillion and generating $417 million in underwriting fees for investment banks. The surge represents a significant increase from the previous year's record of ₹1.73 trillion, according to LSEG data cited by Bloomberg. This boom was fueled by an expanding retail investor base, sustained institutional demand, and regulatory reforms designed to streamline the listing process for companies.

Fee Structure Shows Marked Improvement

The investment banking sector witnessed a notable shift in pricing dynamics, with average underwriting fees climbing to 1.86% of deal value compared to 1.67% in the previous year. This rate now surpasses Hong Kong's typical 1.5% fee structure, marking a departure from India's historical reputation as a low-fee capital market. The increase reflects strengthened pricing power among bankers after years of aggressive competition that had compressed margins.

Domestic Banks Dominate Fee Rankings

Axis Bank emerged as the leading IPO adviser by fee income, earning $34.3 million in 2025. Kotak Mahindra Bank secured the second position with $32.7 million in fees, while IIFL Capital Services rounded out the top three domestic players with $30.2 million, representing a surge of more than 90% from the previous year.

Global Banks Maintain Strong Presence

Among international players, Citi led with $27.1 million in underwriting fees, followed by JPMorgan at $22.6 million. The fee distribution demonstrates the continued importance of global banks in India's capital markets, particularly for large-scale offerings. Motilal Oswal Financial Services recorded the most dramatic growth, with fee income increasing nearly fourfold, while Morgan Stanley and State Bank of India also featured among the top earners.

Market Dynamics and Future Outlook

The record performance helped reverse years of fee compression that had plagued the investment banking sector. Intense competition had previously forced banks to undercut rivals to secure mandates, often at the expense of profitability. The strong deal flow in 2025 provided banks with enhanced negotiating power and reduced the need for aggressive fee discounting.

Despite the impressive growth, India remains relatively inexpensive for issuers compared to global standards, particularly for large offerings. The improved fee structure reflects a gradual maturation of India's capital markets, supported by robust investor demand and regulatory initiatives that have streamlined the IPO process. The combination of these factors positioned India among the world's busiest IPO markets in 2025, creating a more sustainable fee environment for investment banks.

Investment banks operating in India achieved record earnings of $417 million in IPO underwriting fees during 2024, marking a significant milestone as the country's capital markets continue their robust expansion. This unprecedented fee income reflects both the surge in stock listings and a fundamental shift in India's business culture away from purely price-driven transactions toward value-based partnerships.

Fee Structure Shows Market Maturation

The average fee structure demonstrates India's evolving market dynamics:

This fee increase occurred alongside India's IPO market reaching an all-time high for the second consecutive year. The higher rates indicate a maturing local capital market where companies demonstrate willingness to pay premium prices for comprehensive services rather than basic deal execution.

Record Fundraising Activity

India's IPO market performance in 2024 established new benchmarks:

The sustained growth stems from multiple factors including an expanding retail investor base, consistent institutional appetite, and regulatory initiatives designed to streamline the listing process for companies.

Leading Investment Banks Capture Premium Fees

The competitive landscape among IPO advisors revealed clear winners:

These results demonstrate how the steady flow of deals has strengthened bankers' pricing power after years of intense competition. The market shift reflects companies' preference for long-term partnerships over transactional relationships.

Strategic Transformation in Client Relationships

The fee increase represents more than numerical growth—it signals a fundamental change in how companies approach IPO partnerships. Leading companies now seek comprehensive support spanning pre-listing equity story development, transaction execution, and post-IPO liquidity management. This evolution from basic distribution services to strategic advisory relationships has enabled investment banks to command higher fees while delivering enhanced value propositions.

Market Outlook and Pricing Discipline

Despite recent improvements, industry experts note that India remains a relatively low-fee market on a global basis, particularly for large issuers. However, analysts anticipate further fee rate increases driven by a larger share of standardized IPOs and a robust deal pipeline that reduces pressure for aggressive fee discounting. This healthier market dynamic supports more balanced fee approaches, moving away from mandates won purely on price considerations toward comprehensive service quality evaluations.