D-Mart pays lower fee income to its IPO managers

Avenue Supermarts, which operates the D-Mart retail chain, has paid fees of Rs 9.43 crore to the nine investment banks that managed the Initial Public Offering (IPO). It is just 0.5 per cent of the issue size.

Normally, investment banks charge between 1.5 per cent and 3 per cent to manage private sector IPOs. The average fee charged for the previous 10 big IPOs was around two per cent.

The nine investment banks that handled the D-Mart IPO are Kotak Mahindra Capital Company, Axis Capital, Edelweiss Financial Services, HDFC Bank, ICICI Securities, Inga Capital, JM Financial Institutional Securities, Motilal Oswal Investment Advisors and SBI Capital Markets.

The bulk of the Rs 9.43 crore fees was paid to Kotak Mahindra Capital, which acted as the main lead banker. At the same time the remaining seven were paid equally.

D-Mart’s total expense stood at Rs 32.6 crore, including investment bankers' fees, broker commission, advertising and marketing, listing fees and processing fees.

The stock price of Avenue Supermarts increased 0.39 per cent, and is trading at Rs 642.1 on an intraday basis.