IPO expense may be a 'privilege' for i-bankers

It is known that these companies do not pay for merchant banking services in IPOs. Still, they have managed to rope in the best hands in the merchant banking business to manage their issues.

Now, these companies are going a step forward by refusing to pay merchant bankers the ‘other expenses’ in the issue. These include the paper costs for the prospectus and travelling costs of the bankers among others, which make up a significant amount. According to bankers, a state-run company, which plans to come up with an IPO soon, has given the bankers the “privilege” of shouldering the expenses. Merchant bankers don’t seem to be complaining either, going by the line-up of bankers for this issue.

Contributed by Nishanth Vasudevan, Shailesh Menon & Santosh Nair