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

Investment banks managing Tesla 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 JPM, Bank of America 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 GS, Morgan Stanley 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.