The number of registered merchant bankers with the Securities and Exchange Board of India (Sebi) has reached 244, marking the highest level since 1999-2000 (FY2000). According to a Business Standard analysis of collated regulatory data, there were four additional registrations in the first two months of the ongoing year. Merchant bankers help companies sell securities to the public in return for a fee, and this surge reflects the unprecedented activity in India's primary market. As per Pavan Kumar Vijay, founder of Delhi-based merchant banker Corporate Professionals, the persistence of the IPO boom may see room for even more players to come in, in a rise reminiscent of the 1990s, with new registrations likely to continue as IPOs go up.
The merchant banker registration boom coincides with record activity in India's initial public offering (IPO) market. The IPO market raised a record ₹1.8 trillion in FY26 through 112 different companies on the mainboard of stock exchanges, as reported by Business Standard. Additionally, 254 small and medium enterprises (SMEs) raised nearly ₹11,000 crore — also a record. In FY27 so far, nine mainboard IPOs have raised ₹3,794 crore as of June, while 45 SME IPOs have raised ₹1,887 crore during the same period. According to Pavan Kumar Vijay, founder of Corporate Professionals, a number of the new players coming in are primarily handling issues in the SME space, with migration happening within the segment as merchant bankers who used to operate only in SME space have moved to mainboard operations.
According to Pranav Haldea, managing director at Prime Database, the primary driver of increased IPO activity is what he calls the net-worth creation effect. Earlier, traditional family-owned businesses were reluctant to dilute equity, but seeing the personal wealth of peers who went for exchange listings rise significantly has led them to seek similar gains. This phenomenon is particularly prevalent in Tier II and III cities, where local entities are increasingly signing up as merchant bankers to help local companies with regulatory requirements for stock exchange listings.
The growth in merchant banking registrations reflects a widespread momentum across the country, with some new registrations having correspondence addresses in places outside major metros, including Jaipur in Rajasthan, Ahmedabad in Gujarat, and Bhubaneswar in Odisha, according to regulatory disclosures. As reported by Business Standard, Pavan Kumar Vijay, founder of Delhi-based merchant banker Corporate Professionals, noted that many new players are primarily handling SME space issues, while migration is occurring within the segment as merchant bankers who used to operate only in SME space have moved to mainboard operations.
The investment banking fee pool has expanded significantly, with average annual aggregate lead manager fees averaging ₹2,500 crore in the five years ending FY26, compared to around ₹400 crore in the five years ending FY19, according to data from primedatabase.com. These fees exceeded ₹4,300 crore in FY26, reflecting the increased IPO activity. The regulator has sought to increase minimum networth requirements for Category I Merchant Bankers from ₹5 crore to ₹25 crore by January 2027, and further to ₹50 crore by January 2028, though these timelines were relaxed to March 2027 and March 2028 respectively.
