India's Rs 10,000 crore-plus IPOs have not exactly been a safe money-making club for investors. Six such large issues in the recent cycle together raised about Rs 1.06 lakh crore, but four of them are still trading below their issue price. NSE, which is raising Rs 22,562 crore through the IPO, is set to become India's second biggest public listing.

According to Ace Equity data, Hyundai India, which came up with the largest IPO in the country by raising Rs 27,870 crore, is up 11% from its issue price. Tata Capital, which raised Rs 15,511 crore, is up 8%. These are the only two positive names.

The rest have hurt investors. LIC, which raised Rs 20,557 crore, is down 57% from its issue price. Paytm, with an Rs 18,300 crore issue, is down 15%. HDB Financial, which raised Rs 12,500 crore, is down 6%, while LG Electronics, which raised Rs 11,607 crore, is down 49%.

In simple terms, four of the six Rs 10,000 crore-plus IPOs have given negative returns. The average return from the issue price is about minus 18%. On an issue-size weighted basis, the return is also negative at about 16%. That makes the mega-IPO track record a warning for investors chasing size alone.

What's ahead for NSE?

NSE is now entering this club with a much stronger brand than most IPOs, but also with similar challenges that come with a large offer. The issue is entirely an offer for sale, which means NSE will not receive fresh money from the IPO.

Also Read: NSE GMP falls to its lowest level since the IPO announcement. What’s next for the mega issue?

Existing shareholders are selling about 12.64 crore shares. The price band is Rs 1,700-1,785 per share, and the IPO size at the upper band is Rs 22,561.57 crore. The issue opened on September 17 and closes on September 21, with listing planned on BSE on September 24.

The grey market is already sending a cautious signal. NSE GMP, which was around Rs 192 when the price band was announced, has fallen to about Rs 58. At the upper price band of Rs 1,785, that implies just a little over 3% listing premium. A 3% GMP does not point to a failed IPO, but it clearly shows that the earlier expectation of a strong listing pop has faded.

Subscription has also been decent rather than euphoric. The IPO was subscribed 42% on the first day. By the end of the second day, it was subscribed 1.15 times, with QIBs at 1.32 times, NIIs at 1.44 times and retail at 0.68 times.

NSE is a rare business, but not a cheap IPO. At the upper price band, the exchange is valued at about Rs 4.42 lakh crore, or around 43 times FY26 earnings. The valuation is higher than many global exchanges, but analysts have argued that investors are paying for NSE’s dominance and India’s long-term capital market growth.

Read more: NSE IPO Tracker: Catch all the highlights here

Shruti Jain, Chief Strategy Officer at Arihant Capital Markets, said NSE is a dominant market leader with strong operating margins, but investors need to remain aware of its sensitivity to volumes.

"NSE is a high-quality business for long-term investors, but you need to maintain a degree of caution given its sensitivity to market volumes," she said earlier. However, nearly 79% of its revenue comes from transaction charges, leaving earnings vulnerable to market volatility and regulatory tightening on derivatives.

That is one of the biggest questions for investors. NSE's dominance in India’s capital markets is not in doubt, but a large part of its earnings has been driven by the post-Covid options boom. If derivatives volumes cool because of tighter Sebi rules, the earnings engine could slow.

Dr Ravi Singh, Chief Research Officer at Master Capital Services, had also flagged the same risk. He said NSE is a strong business, but investors should watch the valuation and its dependence on derivatives.

The other issue is size. Large IPOs need sustained institutional demand to deliver strong listings. Avinash Gorakshakar, Founder and Head Research at Avinash Mentor Research Services, said NSE issue could still attract institutional and HNI money because of its scale and visibility. But he also warned that because of the massive size and lack of a fresh-issue growth engine, upside on listing may be more measured than in smaller, high-growth IPOs.

Data also shows the same. Big IPOs do not automatically become big winners. In many cases, heavy supply, rich valuation and limited listing scarcity have capped returns. LIC and Paytm showed that even high-profile names can disappoint if pricing and investor expectations are not aligned. Hyundai and Tata Capital show that mega IPOs can work, but the gains so far have been modest.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclourses here.