Contemporary Amperex Technology Co (CATL), the world’s largest electric vehicle battery maker, is preparing for what could become the biggest stock market listing in history. This massive financial move is attracting attention not just for its size, but also for how little the Chinese giant plans to pay the banks handling the deal.
CATL hopes to raise up to $10 billion through a listing in China next year. This would surpass Saudi Aramco’s $29.4 billion IPO from 2019, currently the world’s largest. But there’s a catch—CATL is offering banks unusually low fees for orchestrating this record-setting financial event.
According to sources familiar with the discussions, CATL plans to pay fees totaling just 0.1% to 0.3% of the funds raised. This represents a fraction of the standard 2% to 7% typically commanded by investment banks for IPOs globally. For a deal potentially worth $30 billion, this means banks might share between $30 million and $90 million—far below what such a massive transaction would normally generate.
“This kind of fee compression isn’t surprising for a Chinese state-backed giant, but it still represents an extreme case,” notes Marcus Thompson, a Hong Kong-based IPO consultant not involved in the deal. “Banks are essentially accepting minimal compensation for the prestige of being associated with a historic listing.”
The battery maker’s approach highlights increasing pressure on global investment banks operating in China. Western financial institutions have already faced challenges maintaining profitable operations in the country amid economic slowdowns and regulatory uncertainties. While CATL’s public offering presents a rare opportunity for banks to participate in a landmark transaction, the financial rewards may prove disappointing.
CATL hasn’t officially announced which banks will lead the offering, though preliminary discussions have reportedly involved multiple major Chinese financial institutions. Several global banks with strong China presence are also jockeying for positions in the deal despite the low compensation.
The company’s negotiating leverage stems from its dominant market position. CATL controls roughly 37% of the global EV battery market and supplies major automakers including Tesla, BMW, and Volkswagen. This industry dominance gives it exceptional bargaining power when selecting banking partners.
China’s domestic stock markets have experienced volatility in recent years, but the government has signaled support for capital markets, especially for strategically important industries like electric vehicles and renewable energy. CATL’s listing would reinforce China’s commitment to maintaining leadership in the global EV supply chain.
Market observers note that while the fee structure may seem unfavorable, banks might still benefit through relationship building. “These institutions are playing the long game,” explains Zhang Wei, a Beijing-based financial analyst. “A successful CATL listing could lead to future business with not just the company but with China’s entire EV ecosystem.”
The battery maker’s financial performance has remained strong despite recent challenges in the electric vehicle sector. CATL reported a 64% increase in net profit for 2023, reaching approximately $4.7 billion. This solid financial foundation makes its offering particularly attractive to investors despite broader market uncertainties.
Investors worldwide are watching this deal closely, as it will likely reshape benchmarks for mega-IPOs going forward. The success or failure of CATL’s approach could influence how other market-dominant companies structure their public offerings, particularly in emerging economies.
For now, banks appear willing to accept these unprecedented terms. The rare combination of transaction size, market prominence, and strategic importance makes CATL’s offering too significant to ignore, even with minimal immediate financial rewards.
The massive listing, expected to happen in the first half of 2025, will serve as a crucial test of global investor appetite for Chinese companies and the broader electric vehicle sector. As the world transitions toward renewable energy and sustainable transportation, CATL’s market performance following its IPO could signal investor confidence in this transformation.
While CATL squeezes
