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Citigroup Inc., which was part of the original list of mandated advisers, withdrew because of fees, the people said, asking not to be identified discussing private matters. SBI Funds later replaced Citi with Jefferies Financial Group. JPMorgan Chase & Co. also decided not to pursue the transaction after pitching for similar reasons, one person said.
Shareholders who sold in the IPO – State Bank of India and France’s Amundi SA – offered fees of about 0.01% of the issue size, which bankers called the low point, after some domestic advisers gave up only a token fee for the mandate, the people said. By comparison, companies paid an average of 1.86% of issue size last year, up from 1.67% in 2024, according to LSEG data.
Kotak Mahindra Capital Co., Axis Bank Ltd., SBI Capital Markets Ltd., Motilal Oswal Investment Advisors Ltd., ICICI Securities Ltd. and JM Financial Ltd. were chosen to work on the IPO, along with local units of Citigroup, HSBC Holdings Plc and Bank of America Corp., people familiar with the transaction told Bloomberg News earlier this week.
Low fees reflect a pattern seen in past government-related deals. When State Bank raised 250 billion rupees ($2.8 billion) in a share sale in July, it paid six bankers just one rupee each, according to local media. In such deals, banks often accept token fees as they compete for prestige, ranking credit and long-term relationships. With more than 200 private sector companies expected to tap the IPO market this year, investment banks can be selective and focus on deals that generate sufficient fees, according to the market regulator.
“Many banks have decided not to participate in trades that result in losses, especially as there are several large deals in the private sector in the pipeline where they can earn meaningful fees,” said Pranav Haldea, managing director of Prime Database Group. “Banks, especially foreign ones, are now much more careful about the costs they incur and the fees they earn.”
State Bank, SBI Funds Management and Citigroup did not respond to requests for comment. Amundi and JPMorgan declined to comment. Deliberations are ongoing and the terms of the offer could still change, the people said.
SBI Funds is jointly owned by State Bank and Amundi. The partners said last year that they plan to sell a combined 10% stake through an initial public offering. The offering could raise about $1.4 billion, valuing the company at about $14 billion, the people previously said.
India was one of the world’s busiest markets for new listings in 2025, with companies raising about $22 billion, surpassing last year’s record of about $21 billion, according to data compiled by Bloomberg.
More stories like this are available at bloomberg.com
Published on January 7, 2026
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