1. Who Are Lead Managers?
Lead Managers, also called Book Running Lead Managers (BRLMs) or lead underwriters, are SEBI-registered independent financial institutions (often investment banks or merchant bankers) appointed by companies to oversee and execute the entire IPO process.
Sources: [1][5][6]
2. Key Roles and Responsibilities
- Due Diligence and Eligibility: Lead managers conduct a thorough review of the company’s financials, business model, and regulatory compliance to ensure IPO eligibility.
Source: [4][5]
- Drafting Offer Documents: They prepare crucial documents like the Draft Red Herring Prospectus (DRHP) and Red Herring Prospectus (RHP), ensuring all disclosures and compliance with SEBI and stock exchange norms.
Source: [2][5][6] - Structuring and Pricing: Lead managers help determine the IPO’s structure, issue size, and price band, and are deeply involved in the book-building process—collecting bids from investors to set the final offer price.
Source: [1][8] - Marketing and Promotion: They design and execute marketing strategies, organize roadshows, and present the IPO to institutional and retail investors to generate interest and demand.
Source: [1][5][6] - Regulatory Compliance: Ensuring all SEBI, ROC, and exchange regulations are followed throughout the IPO process.
Source: [3][5] - Appointing Intermediaries: Lead managers coordinate with registrars, bankers, and other intermediaries required for the IPO.
Source: [5][6] - Underwriting and Risk Management: They may underwrite (guarantee purchase of) unsold shares, reducing the risk for the issuing company.
Source: [1][5] - Allocation and Listing: After the IPO closes, lead managers manage share allotment, refunds, and ensure timely listing of shares on stock exchanges.
Source: [3][6] - Post-IPO Support: They provide ongoing advice and support to the company after listing and may help stabilize the share price in the initial days.
Source: [1][3]
3. How Lead Managers Influence IPO Success
- Ensuring Compliance and Transparency: Their expertise ensures all legal and regulatory requirements are met, reducing the risk of post-listing issues.
- Optimizing Fundraising: By setting the right price and marketing the IPO effectively, they help maximize capital raised for the company.
- Boosting Investor Confidence: Reputed lead managers attract large institutional and retail investors, increasing subscription and credibility.
- Reducing Risks: By underwriting and managing market uncertainties, they protect both the issuer and investors.
- Efficient Process Management: Their coordination ensures smooth application processing, allotment, and refunds.
4. Pre-Issue and Post-Issue Functions
- Pre-Issue: Due diligence, document drafting, marketing, regulatory filings, appointing intermediaries, and pricing.
Source: [3][5]
- Post-Issue: Managing escrow accounts, coordinating investor communication, allotment, refunds, listing, and share transfer to demat accounts.
Source: [3][5][6]
5. Compensation and Selection
- Lead managers are paid a commission by the issuer, generally a percentage of the issue size.
Source: [6]
- Companies may appoint multiple lead managers for large IPOs to ensure better reach and expertise.
Source: [5][6]
6. Top Lead Managers in India (by IPO Count)
| Lead Manager | IPO Count |
|---|---|
| ICICI Securities Limited | 174 |
| Axis Capital Limited | 166 |
| Kotak Mahindra Capital Company Limited | 159 |
| JM Financial Limited | 124 |
| Hem Securities Limited | 122 |
| Pantomath Capital Advisors Pvt Ltd | 112 |
| SBI Capital Markets Limited | 107 |
| IIFL Securities Ltd | 95 |
7. Summary Table: Lead Manager’s Impact on IPO
| Function | Impact |
|---|---|
| Due Diligence | Ensures company is IPO-ready and compliant |
| Document Preparation | Accurate, transparent disclosures boost trust |
| Pricing & Book Building | Optimizes capital raised, matches investor demand |
| Marketing | Generates investor interest, increases subscription |
| Underwriting | Reduces risk of undersubscription |
| Allotment & Listing | Ensures fair, timely process and smooth listing |
| Post-IPO Support | Advises company, helps manage price stability |