Bankers' fees drop as IPO sizes balloon

Average fee for IPOs this year 1.6%, lowest in seven years

While volumes on Deal Street have seen a sharp improvement over last year, it hasn't necessarily translated into huge windfall gains for investment banks. The reason: sharp reduction in fees charged by banks to manage Initial Public Offers (IPOs). This year, investment banks have charged 1.6 per cent of the amount raised through IPOs as fees. In comparison, investment bankers had charged two per cent last year and 3.1 per cent in 2015. The average fees this year is lowest in seven years.

In the first nine months of 2017, investment banks pocketed Rs 500 crore for helping companies raise Rs