Investment bankers eye bumper bonuses after record $1.5 bn fee year in 2025
Calendar 2025 saw investment banks, both domestic and global, earn a staggering $1.5 billion in fees from clients for executing deals. This is likely to translate directly into higher bonuses for top bankers from January, industry experts and headhunters said.
Mumbai: Top investment bankers are likely licking their chops at the prospect of lucrative bonuses, after 2025 delivered record fees on the back of buoyant equity capital markets (ECM) and hectic private-market dealmaking.
Data from the London Stock Exchange Group (LSEG) shows that investment banking fees for 2025 totalled $1.5 billion, of which $651.8 million came from equity deals, $391.3 million from M&A deals, $232.5 million from bond deals, and $227 million from loan syndications.
Comparatively, investment banking fees in the previous two years were $1.36 billion (in 2024) and $1.33 billion (2023). In 2024, bonus payouts to investment bankers were an estimated ₹1,000 crore, according to industry experts and headhunters.
The bonuses for 2025 deals are expected to be higher. “The sentiment around bonuses in investment banks is decisively upbeat for 2025 with a strong H2 in ECM activity coupled with a healthy pipeline of deals ahead," said Ruchi Thakkar, director for capital markets hiring at specialist executive search firm Native.
The firm predicts the bonus payouts to be 150-200% of base compensation for 2025 across banks, likely exceeding ₹1,000–1,200 crore in aggregate. Of this, Native expects about ₹800 crore bonus to accrue to top bankers.
That would include more than 350 senior executives — managing directors, partners, directors — across top global and domestic investment banks in India who earn an average fixed salary between ₹1.5 crore and ₹2.5 crore.
Mid- and junior-level bankers are also expected to see relatively higher bonus payouts. Native estimates that more than 70 freshers were hired through campus placements by leading global and domestic investment banks in 2025 at average fixed salaries of ₹25–30 lakh, with bonuses expected to be at least equal to fixed pay.
Further, with newer banks entering the market and competition for talent intensifying, firms are increasingly using bonuses and forward compensation structures to gain an edge. In some cases, banks are offering two-year forward compensation to attract senior talent, Thakkar said.
Bonuses are typically paid out in the first quarter of the following financial year, depending on the fiscal cycle followed by banks.
In 2025, the highest fees were earned by Morgan Stanley ($109.30 million), Jefferies ($98.9 million), JP Morgan ($83.77 million), Kotak Mahindra Bank ($77.40 million) and Axis Bank ($67.65 million), LSEG data showed.
Outlook remains strong
Industry participants and observers expect the buoyancy in dealmaking of 2025 to spill over into the new year.
Ashish Jhaveri, managing director & head of investment banking, Jefferies, said 2025 was a milestone year for ECM activity despite market volatility, driven by strong primary-market flows from domestic and select foreign investors. He added that the activity was broad-based, spanning sectors, ownership structures (domestic, PE-owned and foreign) and deal sizes.
“This combined with activity on blocks made 2025 a record year," Jhaveri said. “We see robust overall ECM activity in the future as well."
“Dealmaking involving India has reached a three‑year high this year, with disclosed value at $154.6 billion—up 87% versus full‑year 2024," said Elaine Tan, senior manager, deals intelligence at LSEG. “The surge is supported by major domestic spin‑offs and strong cross‑border strategic interest."
Tan added that sectors such as industrials, energy & power, and financials made up nearly 60% of the total value in 2025 and also showed high gains.
Industrial deals surged 221% to $35.4 billion, energy & power jumped 190% to $28.9 billion, and financials rose 152% to $27 billion, according to LSEG. High technology nearly doubled, led by transactions such as Capgemini’s $3.6 billion acquisition of WNS.
“Current activity reflects several themes including more pure‑play spin‑offs and continued strong interest in financial services and the energy transition—setting a solid foundation for momentum into 2026," Tan added.
Capital markets underpin momentum
India’s equity capital markets remained among the world’s most active in 2025, recording fundraising of ₹1.76 trillion through 103 initial public offerings, Mint reported recently. This activity was primarily driven by large listings, including Tata Capital ($1.75 billion), HDB Financial ($1.46 billion), and LG Electronics India ($1.3 billion), among others.
“In my view, 2025 was a much better year for investment banking as compared to the record capital market driven year in 2024, as 2025 had a good balance between both continued momentum on capital markets but, more importantly, resurgence of large M&A transactions across financial services, pharma and consumer sector," said Ramesh Srinivasan, managing director and chief executive officer of Kotak Investment Banking.
And this is likely to result in better payouts.
“The fee pool in the past few years has been gradually increasing on the back of increased volumes. We expect the deal volume across M&A, ECM & DCM to remain robust in 2026 and consequently drive a higher pool for the overall investment banking industry," Srinivasan said, adding that bonus pools are closely linked to fee income and are expected to broadly mirror the strong fee generation seen in 2025.
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