What is Cost of Raising Funds in India or Going IPO ?

One of our associates was doing a research on the cost of raising funds in India as an established Business [not startup ]. Here is how the Book Running Lead managers break up their schedule of charges for taking your company public from drafting, filing of REd Herring Prospectus to Listing with NSE / BSE.

Rs 10 Lakh on the date when you assign the contract to the Investment Advisory Firm
Rs 20 Lakh on the Date of Filing DRHP with SEBI
Rs 10 Lakh on receipt of SEBI approval
Rs 10 Lakh on the Date of Listing

Apart from this, they will also charge a flat 3% of the IPO for Lead Management, Underwriting, etc [Over subscription amount is excluded]. The charges mentioned are for company raising upto Rs 100 Cr with NEUTRAL Brand. Someone with stronger Brand may negotiate as your IPO has higher chances of sailing through without any difficulty. Add to this cost of advertising in Newspapers, Magazines, Web and TV. So ~5% will be the cost for raising capital via IPO.