Whalesbook
Record Fees Fuel Banker Bonanza
Investment bankers across India are anticipating substantial bonus payouts, following a landmark year in 2025 that generated record fees. Buoyant activity in equity capital markets (ECM) and vigorous dealmaking in private markets were the primary drivers behind this financial success.
Data from the London Stock Exchange Group (LSEG) reveals that investment banking fees for 2025 amounted to a remarkable $1.5 billion. A significant portion of this total came from equity deals, which accounted for $651.8 million. Mergers and acquisitions (M&A) followed, contributing $391.3 million, while bond deals added $232.5 million and loan syndications brought in $227 million.
These figures represent a notable increase compared to previous years. Investment banking fees in 2024 were $1.36 billion, and in 2023, they stood at $1.33 billion. This upward trend indicates a strengthening market for financial advisory services.
Bonus Expectations Soar
Industry experts and headhunters estimate that bonus payouts for investment bankers in 2024 reached approximately ₹1,000 crore. However, the bonuses anticipated for 2025 deals are expected to be considerably higher, reflecting the record fee generation.
Ruchi Thakkar, director for capital markets hiring at specialist executive search firm Native, noted the decisive upbeat sentiment. She highlighted a strong second half in ECM activity and a healthy pipeline of future deals.
Native predicts that bonus payouts for 2025 could range from 150% to 200% of base compensation across various banks. This could lead to aggregate bonus payouts exceeding ₹1,000 crore to ₹1,200 crore. It is estimated that over ₹800 crore in bonuses may accrue specifically to top bankers.
This includes more than 350 senior executives, such as managing directors, partners, and directors, at leading global and domestic investment banks operating in India. These professionals typically earn a fixed annual salary between ₹1.5 crore and ₹2.5 crore.
Mid- and junior-level bankers are also projected to experience relatively higher bonus increases. Native estimates suggest that over 70 freshers hired through campus placements by major investment banks in 2025, at average fixed salaries of ₹25-30 lakh, can expect bonuses at least equivalent to their fixed pay.
Top Earners and Competitive Landscape
Intensifying competition for talent, particularly with new banks entering the market, is prompting firms to increasingly leverage bonuses and forward compensation structures. In some instances, banks are offering two-year forward compensation packages to attract and retain senior talent, according to Thakkar.
In 2025, the highest fee earners included Morgan Stanley, which garnered $109.30 million, followed by Jefferies ($98.9 million), JP Morgan ($83.77 million), Kotak Mahindra Bank ($77.40 million), and Axis Bank ($67.65 million), according to LSEG data.
Dealmaking Momentum Continues
Industry participants and observers anticipate that the robust dealmaking activity seen in 2025 will extend into the new year. Ashish Jhaveri, managing director & head of investment banking at Jefferies, described 2025 as a milestone year for ECM, characterized by strong primary market flows from domestic and select foreign investors, despite market volatility.
He emphasized that the activity was broad-based, spanning diverse sectors, ownership structures, and deal sizes. This, combined with active block transactions, made 2025 a record year, with expectations of continued robust ECM activity.
Elaine Tan, senior manager, deals intelligence at LSEG, stated that dealmaking involving India has reached a three-year high in 2025, with a disclosed value of $154.6 billion, an increase of 87% compared to the full year 2024. This surge is supported by major domestic spin-offs and strong cross-border strategic interest.
Sectors like industrials, energy & power, and financials accounted for nearly 60% of the total value in 2025. Industrial deals saw a significant surge of 221% to $35.4 billion, energy & power jumped 190% to $28.9 billion, and financials rose 152% to $27 billion. The high technology sector nearly doubled, notably driven by Capgemini's $3.6 billion acquisition of WNS.
Outlook for 2026
Tan added that current activity reflects themes such as pure-play spin-offs and sustained interest in financial services and the energy transition, setting a solid foundation for momentum into 2026.
Ramesh Srinivasan, managing director and chief executive officer of Kotak Investment Banking, viewed 2025 as a better year than the record capital market year of 2024, highlighting a good balance between continued capital market momentum and a resurgence of large M&A transactions across financial services, pharma, and consumer sectors.
He anticipates that this trend will likely result in better payouts. Srinivasan expects deal volumes across M&A, ECM, and DCM to remain robust in 2026, consequently driving a higher fee pool for the overall investment banking industry. Bonus pools, closely linked to fee income, are expected to mirror this strong fee generation.
Impact
This news indicates a thriving financial services sector in India, driven by strong dealmaking. The expected record bonus payouts signal robust economic activity and investor confidence, potentially attracting further talent and investment into the Indian market. It reflects a healthy ecosystem for capital raising and corporate restructuring, which can benefit investors through increased IPOs and M&A opportunities.
Impact Rating: 8/10
Difficult Terms Explained
- Equity Capital Markets (ECM): The part of the capital markets focused on the issuance and trading of stocks (equity). It's where companies raise money by selling shares to the public or private investors.
- Mergers & Acquisitions (M&A): Refers to the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, tender offers, purchase of assets, and management acquisitions.
- Bonds: A fixed-income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). Bonds are used as a way for governments and companies to raise money.
- Loan Syndications: A process where a loan is provided by a group of lenders (a syndicate) to a single borrower. This is typically done for large loans that are too big for a single lender to handle alone.
- Base Compensation: The fixed salary an employee receives regularly, excluding variable pay such as bonuses, commissions, or overtime.
- Fiscal Cycle: The period over which financial accounts are reported, typically a year. In many countries, this is the calendar year (January 1 to December 31), but some organizations or governments use a different 12-month period.
- Spin-offs: The separation of a subsidiary or division of a company from its parent company, creating a new, independent entity. Shareholders of the parent company usually receive shares in the new company.
- Cross-border Strategic Interest: When companies from one country show interest in investing in, acquiring, or forming partnerships with companies in another country to achieve specific business goals or gain strategic advantages.
- Debt Capital Markets (DCM): The part of the capital markets that deals with the issuance and trading of debt instruments like bonds. It's how companies and governments raise funds by borrowing money.