Introduction

India’s biggest IPOs have not always translated into strong returns for investors. Six IPOs worth more than Rs 10,000 crore each have collectively raised around Rs 1.06 lakh crore, but four of these issues are currently trading below their respective issue prices.

The upcoming National Stock Exchange (NSE) IPO is now entering this mega-IPO segment with an issue size of Rs 22,562 crore. While NSE has a dominant position in India’s capital markets, its high valuation and significant dependence on transaction revenue and derivatives activity could become important factors for investors assessing the offering.

India’s Mega IPO Track Record Raises Questions

The recent performance of large IPOs presents a mixed picture. According to the data cited in the source material, only Hyundai India and Tata Capital are trading above their issue prices among the six Rs 10,000 crore-plus IPOs.

Hyundai India raised Rs 27,870 crore and is currently around 11% above its issue price. Tata Capital, which raised Rs 15,511 crore, is up about 8%.

The remaining four large IPOs have delivered negative returns from their respective issue prices.

LIC, which raised Rs 20,557 crore, is down around 57%. Paytm, with an Rs 18,300 crore issue, is down about 15%. HDB Financial, which raised Rs 12,500 crore, is down around 6%, while LG Electronics, which raised Rs 11,607 crore, is down around 49%.

Overall, the average return across these six mega IPOs is around minus 18%, while the issue-size-weighted return is approximately minus 16%.

Big IPOs Offer Mixed Results

The data suggests that the size of an IPO alone does not determine whether investors will generate positive returns. Valuation, business fundamentals, market conditions and future earnings expectations can play a significant role.

NSE IPO: What Investors Need to Know

NSE is preparing to raise approximately Rs 22,562 crore through an offer for sale. Unlike a fresh issue, the proceeds from an offer for sale go to existing shareholders rather than directly into the company.

Existing shareholders are offering approximately 12.64 crore shares. The price band has been set at Rs 1,700 to Rs 1,785 per share.

At the upper end of the price band, the IPO is valued at approximately Rs 4.42 lakh crore, translating to around 43 times FY26 earnings.

The IPO opened on September 17 and closes on September 21, with listing planned on the BSE on September 24, according to the information provided.

NSE Grey Market Premium Shows Caution

The grey market premium has also moderated from earlier levels.

NSE’s GMP was reported at around Rs 192 when the price band was announced but later declined to approximately Rs 58. At the upper price band of Rs 1,785, this represents a potential listing premium of slightly more than 3%.

Grey market premiums are unofficial indicators and should not be treated as guaranteed listing gains. However, the decline suggests that expectations for a substantial listing premium have moderated.

Subscription Demand Remains Measured

The subscription figures have shown interest from investors, but the demand has not been uniformly aggressive.

The IPO was subscribed around 42% on the first day. By the end of the second day, total subscription had reached approximately 1.15 times.

The category-wise subscription stood at:

• QIBs: 1.32 times
• NIIs: 1.44 times
• Retail investors: 0.68 times

These figures indicate differing levels of participation across investor categories during the subscription period.

NSE’s Business Model and Derivatives Dependence

NSE occupies a unique position in India’s financial markets, but its earnings profile is an important consideration for investors.

According to the information cited in the source material, nearly 79% of NSE’s revenue comes from transaction charges. This makes the company sensitive to trading activity and market volumes.

The rapid expansion of options trading following the Covid-19 period has been an important contributor to market activity. Any sustained decline in derivatives volumes could therefore affect transaction-based revenue.

Regulatory changes affecting derivatives trading are another factor investors may need to monitor. Changes in market structure, trading behaviour or regulatory requirements could influence future volumes and earnings.

Valuation Is Another Key Consideration

At the upper price band, NSE’s valuation is estimated at around Rs 4.42 lakh crore, or approximately 43 times FY26 earnings.

Supporters of the valuation point to NSE’s dominant position in India’s capital-market infrastructure, strong operating margins and the potential for long-term expansion of India’s financial markets.

At the same time, a higher valuation means investors are paying a substantial price for those growth expectations. If earnings growth or trading volumes fail to meet expectations, valuation could become a more significant factor in future returns.

Why Mega IPOs Can Disappoint

The experience of recent large IPOs highlights several factors that can influence post-listing performance.

First, large IPOs bring a substantial amount of stock into the public market. This can create significant supply after listing.

Second, high-profile companies can attract strong investor attention, sometimes resulting in elevated expectations around listing gains.

Third, valuation remains critical. A strong company can still deliver disappointing investment returns if its IPO price already reflects aggressive growth expectations.

LIC and Paytm illustrate how prominent companies can trade below their issue prices, while Hyundai India and Tata Capital demonstrate that large IPOs can also generate positive returns.

NSE Investors Should Watch These Factors

Investors evaluating NSE’s IPO may want to pay particular attention to:

• IPO valuation: The issue price implies a valuation of around Rs 4.42 lakh crore at the upper band.
• Transaction revenue: A large proportion of revenue is linked to transaction activity.
• Derivatives volumes: Sustained options activity is an important earnings driver.
• Regulatory changes: Changes affecting derivatives and trading could influence future volumes.
• Institutional demand: The large issue size requires substantial investor participation.
• Post-listing supply: The offer-for-sale structure means existing shareholders are monetising their holdings.
• Long-term earnings growth: Future returns will ultimately depend on business performance rather than IPO size alone.

Key Highlights

• Six recent Indian IPOs above Rs 10,000 crore collectively raised around Rs 1.06 lakh crore.
• Four of those six IPOs are trading below their issue prices based on the cited data.
• NSE’s IPO size is approximately Rs 22,562 crore.
• The NSE price band is Rs 1,700-1,785 per share.
• At the upper band, NSE is valued at approximately Rs 4.42 lakh crore.
• The valuation represents around 43 times FY26 earnings.
• Nearly 79% of NSE’s revenue is reportedly linked to transaction charges.
• NSE’s GMP reportedly declined from around Rs 192 to approximately Rs 58.
• Subscription reached around 1.15 times by the end of the second day in the cited data.
• The recent performance of mega IPOs shows that a large issue size does not automatically translate into strong investor returns.

Professional Disclaimer & Third-Party Reference

This article is based on information and market data referenced from standard third-party financial news sources, market-data providers and publicly available IPO information. Figures such as subscription levels, grey market premiums, valuations and returns may change with market conditions and subsequent data revisions.

The information is provided for news and general informational purposes only and should not be considered investment advice, a recommendation to subscribe to or avoid the NSE IPO, or a guarantee of listing or long-term returns. Investors should review the official IPO documents, financial statements, risk factors and relevant research from SEBI-registered professionals before making investment decisions.

Conclusion

The track record of recent Rs 10,000 crore-plus IPOs shows that size and brand recognition alone have not guaranteed positive returns. NSE brings a distinctive business model and a strong position in India’s capital markets, but its valuation, transaction-based revenue and exposure to derivatives volumes remain important factors for investors to assess.

The NSE IPO therefore highlights a broader lesson from India’s mega-IPO market: investors need to look beyond the headline issue size and examine valuation, earnings sustainability, regulatory risks and long-term business fundamentals before making an investment decision.