Some of Wall Street’s biggest banks have opted out of advising on a planned $1.4 billion initial public offering of India’s SBI Funds Management Ltd. because of low fees, according to people familiar with the matter.
Citigroup Inc., which was part of the initial list of mandated advisers, pulled out over fees, the people said, asking not to be identified while discussing private matters. SBI Funds later replaced Citi with Jefferies Financial Group. JPMorgan Chase & Co. also decided not to pursue the transaction after pitching due to similar reasons, a person said.
Shareholders selling in the IPO — the state-run State Bank of India and France’s Amundi SA — offered fees of about 0.01% of the issue size, which bankers called rock bottom, after some domestic advisers quoted only a token fee for the mandate, the people said. By comparison, companies paid an average fee of 1.86% of the 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 picked 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.
Past Trend
Low fees reflect a pattern seen in past government-linked deals. When State Bank raised 250 billion rupees ($2.8 billion) through a share sale in July, it paid six bankers just one rupee each, according to local media. In such deals, banks often accept symbolic fees as they vie for prestige, league-table credit and long-term relationships.
State Bank, SBI Funds Management and Citigroup didn’t respond to requests for comment. Amundi and JPMorgan declined to comment. Deliberations are ongoing and the terms of the offering could still change, the people said.
SBI Funds is jointly owned by State Bank and Amundi. The partners said last year they plan to sell a combined 10% stake through an IPO. The offering could raise about $1.4 billion, valuing the company at about $14 billion, the people said earlier.
India was among the world’s busiest markets for new listings in 2025, with companies raising about $22 billion, surpassing the previous year’s record of roughly $21 billion, data compiled by Bloomberg show.
