Bonuses are typically commensurate with deal activity and fees earned. The kind of deals these bankers were part of, and the role they played, are also deciding factors. Banks pocket 2-3 per cent as fees, on an average, for managing IPOs, and 1.5-2.0 per cent for handling QIPs.
Buybacks fetch Rs 1-2 crore per deal. Fees depend on the issue size and number of bankers managing. “Bonuses will be linked to deal activity in FY20, and but there may be some rationalisation in payouts,” said a senior I-banker.
“Most of the domestic banks have done well in terms of revenue. However, given the bleak outlook, it will be up to individual managements to take a call on bonuses,” added another banker.
FY20 witnessed equity fundraising of Rs 91,670 crore through public markets
— 62 per cent higher than the previous year but 48 per cent lower than FY18, according to PRIME Database.
Fresh capital accounted for 61 per cent of the total equity fundraising. Thirteen main-board IPOs came to the market collectively, raising Rs 20,350 crore in FY20 — a 38 per cent rise from the previous year. SBI Cards’ offering of Rs 10,341 crore was the largest during the year. The average deal size was Rs 1,565 crore. Thirteen firms mobilised Rs 51,216 crore through QIPs, 388 per cent higher than the previous year. The largest QIP was by Bharti Airtel, which raised Rs 14,400 crore.
QIPs were dominated by banks, NBFCs, and telcos — accounting for 79 per cent of the overall amount.
According to market players, the pandemic may upset equity fundraising plans in the coming months, with likelihood high of no activity in Q1 and Q2. “While the IPO pipeline continues to remain strong with more than 30 firms wanting to raise over Rs 30,000 crore, it is highly unlikely that any of these issues will hit the market, till such time the uncertainty ends,” said Haldea.