Flood of IPOs brings sackful of bonuses to I-Bankers’ accounts

The capital markets saved the day for Indian investment bankers as they took home hefty bonuses and payouts despite a relatively soft M&A business, company officials and industry sources said, pointing to the IPO frenzy as equity indices surged to records. Bonuses were 150-200% high for top performers in some of the top-rung local I-banks such as Kotak, JM Financial, Axis Capital, Avendus and Veda, among others, sources told ET.

A string of IPOs and other capital market offerings helped deal-makers earn an average 10% increase, while a few top performers took home 20-25% more, as companies tried to retain top talent, said industry officials. On the lower end, average bonuses were in 80-100% range, according to estimates.

"Full-service platforms, which encompass advisory and capital markets, have experienced robust performance in the past couple of months with strong capital markets activity. This has translated into significantly higher bonuses for platforms heavily invested in capital markets," said Ruchi Thakkar, director, capital markets, at Native. Average total compensation for MDs at domestic investment banks ranges between ₹3 crore and ₹6 crore, while for top global platforms, it is about ₹4.5-9 crore, estimates by Native showed.

Total compensation mostly includes a fixed pay and bonus. In a few cases, such packages may also include stocks and restricted stock units, or RSUs, which in most international banks would vest over three or four years.

Bonuses for investment bankers are usually 40-50% of the total compensation. "It has been a robust year for Kotak Investment Bank and both the capital markets and advisory businesses have fared well," said Kotak Investment Bank's head of HR Tejal Mulye. "Given that the firm has performed better than last year, payouts have been consistent with this better performance," she added.

This has led to a larger bonus pool for employees, she added, without disclosing the numbers.

"Estimates suggest average salary hikes of i-bankers in 2024 have been higher at 10-15%, compared with 4-7% last year," said Aditya Narayan Mishra, CEO, Ciel HR Staffing. "Market offers a strong pipeline of opportunities and the fund houses have been proactive in efforts to keep the sentiment high by raising base salaries higher than the previous year and at the same time, retain their best talent."

Avendus Group's CHRO Anirban Banerjee said: "Increments were in 25-30% range given that we reset our base compensation every 2-3 years to remain ahead of the curve in a competitive market and reward high performers." He added bonuses range from 90-to-200%, based on performance. Robust appraisals were used to retain top talent. "ECM bankers with strong coverage capability are in high demand," said Puneet Pratap Singh, country head at leadership search consultant, Heidrick & Struggles.

The IPO market boomed in India in FY24 with 75 issues launched - the highest in the last two years. Fundraising through IPOs rose 20% with about ₹62,000 crore garnered, against ₹52,110 crore raised by 37 IPOs in FY23.



“This is our fourth consecutive year of good growth. Being a mid-market sector agnostic, straddling across ticket sizes and regions has helped us,” said Ganapathiraman, managing director at Chennai based Veda Corporate Advisors, which has given 100-150% bonus or 2-3x of salary.. “Senior bankers with revenue responsibility and meeting/ exceeding targets could have variables in the 2-3x range of their CTC,” he said.

Axis, and JM Financial refused to comment on their bonus levels.

"Talent retention is very important and has been challenging," said Mulye of Kotak. "We have been taking feedback from the younger team in the firm on specific retention strategies. In this regard we continue to remain focused and evolve our plans to enable employee retention."