The year 2025 has turned out to be a landmark period for India's investment banking community, setting the stage for what is expected to be the most generous bonus season in recent memory. This follows the industry raking in an unprecedented $1.5 billion in total fees from executing deals, as per data from the London Stock Exchange Group (LSEG).
A Deep Dive into the Record Fee Pool
The monumental fee income was powered by exceptionally buoyant equity capital markets (ECM) and a frenzy of private-market transactions. Breaking down the $1.5 billion total, equity capital market deals contributed the lion's share at $651.8 million. This was followed by mergers and acquisitions (M&A) at $391.3 million, bond deals at $232.5 million, and loan syndications at $227 million.
This performance marks a significant jump from the previous two years, where fees stood at $1.36 billion in 2024 and $1.33 billion in 2023. The leading fee earners for 2025 were global and domestic giants: 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).
Bonus Payouts: Who Gets What?
The direct correlation between fee income and bonus pools means bankers are in for a windfall. Executive search firm Native predicts that bonus payouts for 2025 could reach 150-200% of base compensation across banks. In aggregate, the industry's bonus pool is likely to exceed the estimated ₹1,000 crore paid out in 2024, potentially reaching ₹1,000–1,200 crore.
Ruchi Thakkar, Director for Capital Markets Hiring at Native, noted a decisively upbeat sentiment, driven by strong second-half ECM activity and a healthy deal pipeline. Of the total pool, about ₹800 crore is expected to accrue to top bankers. This group includes over 350 senior executives—managing directors, partners, and directors—across leading banks, who typically earn an average fixed salary between ₹1.5 crore and ₹2.5 crore.
The bounty isn't limited to the top brass. Mid- and junior-level bankers, including more than 70 freshers hired from campuses in 2025 at average salaries of ₹25–30 lakh, are also set to receive relatively higher payouts, with bonuses expected to be at least equal to their fixed pay.
Robust Deal Momentum to Spill Into 2026
Industry leaders are confident that the momentum from 2025 will continue. Ashish Jhaveri of Jefferies called 2025 a milestone year for ECM, with activity spanning sectors, ownership structures, and deal sizes. Elaine Tan of LSEG highlighted that dealmaking involving India reached a three-year high, with total disclosed value surging 87% to $154.6 billion compared to full-year 2024.
Key sectors driving this surge included:
- Industrials: Deals surged 221% to $35.4 billion.
- Energy & Power: Jumped 190% to $28.9 billion.
- Financials: Rose 152% to $27 billion.
Ramesh Srinivasan of Kotak Investment Banking emphasized that 2025 saw a good balance between capital markets and a resurgence in large M&A transactions. He expects deal volumes across M&A, ECM, and debt capital markets (DCM) to remain robust in 2026, consequently driving a higher fee pool and, by extension, strong bonus payouts that mirror the fee generation of 2025.
