New Delhi. NTPC Green Energy IPO, a subsidiary of government company NTPC Limited, was listed on the stock market on Wednesday. It was listed on the Bombay Stock Exchange (BSE) at Rs 111.60 with a premium of 3.33 percent. During trading, it touched an upper circuit of 10 percent. NTPC Green Energy's IPO of Rs 10,000 crore was subscribed 2.55 times due to strong demand from institutional and retail investors.

The merchant bankers who managed the IPO did a good job, but the bankers did not really benefit in terms of fees or remuneration. According to the IPO document, the total merchant banking fee was a mere Rs 7.1 crore, a fraction of the fees charged by bankers for handling the issue of any private sector entity. Hyundai Motor India paid Rs 493 crore to its merchant bankers for handling its Rs 27,855 crore IPO.

Merchant Bankers for NTPC Green Energy IPO
IDBI Capital Markets, HDFC Bank, IIFL Capital Services, and Nuvama Wealth Management were the merchant bankers handlingthe  NTPC Green Energy IPO.

NTPC Green Energy's IPO is one of the biggest IPOs to hit the market
this year. Only Hyundai Motor India and Swiggy are ahead of NTPC Green Energy in terms of issue size. Vodafone-Idea had brought a follow-on public offer (FPO) of Rs 18,000 crore. Merchant bankers earned a hefty fee of Rs 275 crore for managing Swiggy's IPO.

Managing PSU IPOs is more about prestige than money.
Interestingly, merchant bankers always quote a much lower amount for government issues, as such offers are usually large and merchant banking firms benefit from their standing in the league table. An investment banker dealing with PSU IPOs said, "Managing IPOs of government companies is more about prestige than money. We also benefit by being among the top merchant banking firms in the league table, which helps us get bigger and more mandates." This is better than earlier years when bankers used to agree to work for almost zero fees, the investment banker said.

In 2009, merchant bankers earned a fee of only Rs 5.5 crore in NHPC's Rs 6,039 crore IPO. Merchant bankers earned a fee of only Rs 45 lakh in Oil India's Rs 2,777 crore IPO. Last year, Indian Renewable Energy Development Agency's Rs 2,150 crore IPO was launched and merchant bankers earned a fee of only Rs 11.5 crore. There were 3 merchant bankers in this issue - IDBI Capital Markets, BOB Capital Market,s and SBI Capital Markets.