Recent large offerings like NSE’s Rs 22,500 crore listing expose the risk that size alone doesn’t guarantee investor profits, as historical data shows most mega IPOs underperform or remain underwater.
India’s biggest flotations have rarely been a one-way ticket to easy money, and the latest case of the National Stock Exchange’s long-awaited listing is reviving that argument. The central question is simple: does a very large initial public offering automatically enrich retail investors? Recent history suggests not. In a string of mega issues worth more than Rs 10,000 crore, only a couple have held above their offer prices, while several have slipped below them, reminding investors that size alone is no substitute for pricing discipline and business quality.
That is the backdrop for NSE’s proposed offering, which at more than Rs 22,500 crore would be the country’s second-largest listing after Hyundai India. According to data compiled by Ace Equity and cited by Livemint, India has seen six such large IPOs in recent years raise about Rs 1.06 lakh crore in total. Hyundai India trades about 11% above its issue price and Tata Capital about 8% higher, but the rest have disappointed: Life Insurance Corporation of India is about 57% lower, LG Electronics about 49% lower, Paytm about 15% lower and HDB Financial about 6% lower.
The broader lesson is sobering. Livemint’s review of the six biggest issues shows that four are still underwater, leaving the average return at roughly minus 18% on an issue-price basis. The message is not that large listings are doomed, but that investors cannot treat size as a proxy for upside. A mega IPO can arrive with immense visibility and strong brand recognition and still fail to reward buyers if valuation is stretched or the growth story is already priced in.
NSE’s own deal structure adds to the caution. The offer is entirely an offer for sale, meaning the exchange itself will not receive fresh capital from the listing. Existing shareholders are selling about 12.64 crore shares, with the price band set at Rs 1,700 to Rs 1,785 a share and the issue valued at about Rs 22,561.57 crore at the top end. The issue opened on 17 September and is due to close on 21 September, with a listing scheduled for 24 September.
Market signals have also cooled from the earliest enthusiasm. The grey market premium, which was around Rs 192 when the band was announced, has fallen to roughly Rs 48, implying only a modest premium to the issue price. Subscription has been adequate rather than euphoric: after the second day it stood at 1.15 times, with qualified institutional buyers at 1.32 times, non-institutional investors at 1.44 times and retail investors at 0.68 times. NSE remains a powerful franchise, and analysts quoted by ET have pointed to its market dominance and the long-term growth of India’s capital markets, but they have also warned that its earnings are heavily tied to transaction fees and derivatives volumes. That leaves the stock exposed if trading activity cools or regulators tighten rules. At the upper end of the price band, NSE would be valued at about Rs 4.42 lakh crore, or roughly 43 times estimated FY26 earnings, a rich multiple that explains why institutional demand will matter so much to the listing outcome.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
