NSE IPO: Exchange Proposes 0.65% Advisory Fee for $2.5 Billion Issue in Cost-Conscious Move

As per Bloomberg report, the National Stock Exchange of India (NSE) has announced a modest advisory fee of 0.65% for its upcoming initial public offering (IPO), expected to raise $2.5 billion. 

This decision reflects a trend in India where issuers, especially in government-linked transactions, keep costs under tight control. 

Details of the Advisory Fee Structure 

The advisory fee set by NSE for its IPO is 0.65% of the issue size. With an anticipated deal size of $2.5 billion, the total fee pool is projected to be around $16.25 million.  

This fee is significantly lower compared to the average fees of 1.86% paid by 417 companies in the previous year and 1.67% by 350 issuers in 2024, according to LSEG data. 

NSE has appointed approximately 20 banks to manage the IPO. Among these, Kotak Mahindra Capital Co., JM Financial Ltd., Morgan Stanley, HSBC Holdings Plc, Citigroup Inc., and JPMorgan Chase & Co. have been assigned key roles. Kotak Mahindra Capital Co. is acting as the left lead bank. 

Comparison with Other Transactions 

In India, it is common for government-linked or quasi-sovereign transactions to have lower advisory fees. For instance, when the State Bank of India raised ₹2,50,000 crore ($2.8 billion) in July, it paid a symbolic ₹1 each to 6 banks, as per news reports.  

Similarly, Life Insurance Corporation Ltd. paid about 0.58% of the issue size as fees in 2021, while NTPC Green Energy paid around 0.54%. 

Read More: NSE IPO May Enter Elite Market Cap Club, OFS Size Pegged At ₹21,000–25,000 Crore! 

Private Sector Deals 

In contrast, private-sector deals tend to offer higher fees. Hyundai Motor India’s IPO in 2024 paid about ₹493 crore, or 1.77% of the issue size, in fees.  

LG Electronics Inc. paid approximately ₹226 crore or 1.94% for its $1.3 billion India listing. These figures highlight the disparity in fee structures between public and private sector transactions. 

Conclusion 

The NSE's decision to set a 0.65% advisory fee for its $2.5 billion IPO underscores a broader pattern of cost control in government-linked transactions in India. This fee structure is notably lower than those typically seen in private-sector deals, reflecting the strategic importance and prestige associated with such mandates. 

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