Tesla Supplier CATL Sets Modest Underwriting Fees For World's Biggest IPO Of 2025

Investment banks managing Tesla (NASDAQ:TSLA) battery supplier CATL’s IPO, the world’s largest listing of 2025, are set to earn underwriting fees that fall below the industry standard. 

What Happened: Nine underwriters of Shenzhen-listed battery titan CATL are projected to receive a maximum of HK$238.7 million ($30.62 million). This data was shared by the Chinese firm in a securities filing earlier this week. The fixed commission on Hong Kong's largest listing of the year is just 0.2% of the funds raised—well below the industry average, according to Reuters.

This fee is just one-third of what Chinese home appliance maker Midea paid banks last year for its nearly $4.6 billion Hong Kong listing. It's also only a quarter of the 0.8% underwriting fee that China's largest express delivery firm, S.F. Holding, paid for its $792 million secondary listing in Hong Kong last November.

The sponsors of the CATL deal—JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), China International Capital Corporation, and China Securities International—will each receive $300,000 for their involvement. That's roughly half the five-year market average, according to Dealogic data. Meanwhile, Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and UBS are serving as joint global coordinators for CATL’s Hong Kong listing,

CATL may offer a 0.6% discretionary fee as an incentive. The modest fees underscore the tough environment banks face in Asia’s financial hub, even as a recent uptick in trading volumes and new listings has raised hopes for a rebound in major Chinese offerings.

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Why It Matters: This development comes after CATL’s announcement to raise over $4 billion through a stock listing on Hong Kong’s stock exchange. The company, a battery supplier for the Elon Musk-led Tesla Inc, aimed to raise the figure by selling over 117.9 million shares priced at HK$263 ($33.75).

CATL’s offering has seen strong demand and was oversubscribed multiple times since its launch on Monday, attracting interest from sovereign wealth funds and global long-only investors, according to a book message reviewed by Reuters.

Earlier in April, CATL had launched the second-generation ‘Shenxing’ fast-charging battery, which can power over 67 new EVs this year. The battery enables a range of 520 km or approximately 323 miles on a 5-minute charge, and can also be charged from 0% to 80% in 15 minutes in cold weather.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.