NSE IPO: This fee structure diverges sharply from prevailing market trends. According to data from the London Stock Exchange Group, companies paid an average advisory fee of around 1.86 per cent last year, compared with roughly 1.67 per cent in 2024., Markets, Times Now

NSE IPO Fees Likely To Set At Just 0.65%-What’s Behind The Unusually Low Cut?

NSE IPO deal size is expected to be about 2.5 billion (approx Rs 23,085 crore). (File photo)

The National Stock Exchange of India has reportedly pegged advisory fees for its much-anticipated initial public offering at around 0.65 per cent of the total issue size, according to people aware of the development. With the IPO expected to be valued at approximately $2.5 billion (about Rs 23,085 crore), the overall fee pool could reach nearly $16.25 million. A significant portion of this amount is expected to be distributed among the six lead banks involved in the transaction, sources said in a Bloomberg report.

This fee structure stands in contrast to broader market trends. Data from the London Stock Exchange Group shows that companies paid an average of about 1.86 per cent in advisory fees last year, while issuers in 2024 paid roughly 1.67 per cent.

The exchange recently appointed around 20 banks to manage the IPO process. Among them, Kotak Mahindra Capital, JM Financial, Morgan Stanley, HSBC, Citigroup and JPMorgan Chase have been assigned key responsibilities. Kotak Mahindra Capital is expected to act as the lead on this deal, states the report.

Cost Discipline Common In Public-Linked Deals

The relatively conservative fee highlights a broader trend in India’s capital markets, particularly in deals involving public-sector or quasi-sovereign institutions, where issuers closely manage transaction expenses.

In several instances, banks have agreed to minimal compensation in return for the prestige associated with high-profile mandates. For example, when State Bank of India raised Rs 25,000 crore in July, it reportedly paid six banks a token fee of Re 1 each.

“Compared with large state-owned or public institutions, NSE’s fee payout appears relatively fair,” said Raghuram Kasiviswanathan, head of IPO advisory at Uniqus Consultech in the Bloomberg report. “With the exchange at the heart of the country’s capital markets, securing a role offers not just immediate revenue, but a longer-term strategic foothold.”

Private Sector Deals Continue To Offer Higher Payouts

Fee structures in private-sector IPOs tend to be more lucrative. For instance, Hyundai Motor India paid about Rs 4.93 billion, or 1.77 per cent of its issue size, during its record listing in 2024. Similarly, LG Electronics paid around Rs 226 crore, or 1.94 per cent, for its $1.3 billion India IPO.

Earlier this year, Amundi and SBI offered fees of roughly 0.01 per cent for the planned IPO of SBI Fund Management, a level some bankers described as extremely low, prompting a few global firms to step away from the deal. Meanwhile, Life Insurance Corporation of India paid about 0.58 per cent in fees for its 2021 IPO, while NTPC Green Energy paid approximately 0.54 per cent.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. Times Now Digital suggests its readers/audience consult their financial advisors before making any money-related decisions.)

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