Mega IPOs Turn Into Mega Disasters: Can HDB Financial Break the ₹10,000 Crore Curse?

The Indian IPO market has witnessed a troubling trend—mega public offerings (IPOs) above ₹10,000 crore have repeatedly disappointed investors. From Paytm (2021) to LIC (2022), high-profile debuts have turned into long-term losses. Now, HDB Financial Services, the NBFC arm of HDFC Bank, is preparing for a ₹15,000 crore IPO in late 2025.

This blog examines:
✔ Why mega IPOs have underperformed
✔ HDB Financial’s IPO prospects
✔ Investor lessons from past disasters
✔ Can this IPO break the curse?

The ₹10,000 Crore IPO Curse: A Track Record of Disappointments

1. Paytm (₹18,300 Crore IPO, 2021)

Listing Date: November 18, 2021
Issue Price: ₹2,150
Current Price (Dec 2024): ₹450 (79% down from IPO)
Why It Failed:
- Overvaluation (P/E of 49x at launch)
- Regulatory hurdles in fintech
- Path to profitability unclear

2. LIC (₹21,000 Crore IPO, 2022)

Listing Date: May 17, 2022
Issue Price: ₹949
Current Price (Dec 2024): ₹680 (28% down)
Why It Failed:
- Weak growth prospects vs private insurers
- Government’s pricing mismatch

3. Zomato (₹9,375 Crore IPO, 2021)

Listing Date: July 23, 2021
Issue Price: ₹76
Current Price (Dec 2024): ₹120 (+58% but highly volatile)
Key Issue: Profitability concerns despite recovery

HDB Financial IPO: Will It Be Different?

IPO Snapshot (Expected Q4 2025)

Detail	Specification
IPO Size	₹12,000-15,000 crore
Valuation	~₹60,000 crore
Lead Managers	Morgan Stanley, ICICI Securities, HDFC Bank
Key Strength	Backed by HDFC Bank’s ecosystem

Why HDB Financial Could Succeed

Strong Parentage: HDFC Bank’s brand trust
Profitability Track Record: 5-year CAGR of 18%
Diversified Portfolio: Loans, insurance, SME lending

Risks to Watch

⚠ Competition: Bajaj Finance, Cholamandalam
⚠ Asset Quality: Rising NPAs in unsecured loans
⚠ Market Sentiment: Mega IPOs still viewed skeptically

Why Do Mega IPOs Fail? 4 Key Reasons

1. Overvaluation & Hype

Companies price IPOs aggressively, leaving little upside.
Example: Paytm was valued higher than global peers like Square.

2. Weak Post-Listing Fundamentals

Many firms fail to deliver promised growth.
Example: LIC’s premium growth stagnated post-IPO.

3. Retail Investor Frenzy

FOMO (Fear of Missing Out) drives irrational bidding.
Example: Nykaa’s IPO was oversubscribed 82x but fell 75% from peak.

4. Macroeconomic Shocks

Rising interest rates, inflation hurt valuations.
Example: Policybazaar dropped 60% in 2022 due to Fed rate hikes.

Can HDB Financial Break the Curse?

Bull Case

✔ HDFC Bank’s Distribution Network: 6,000+ branches
✔ NIM (Net Interest Margin) of 6.5%: Better than peers
✔ Digital Push: 40% loans sourced via paperless process

Bear Case

✖ Unsecured Loan Risks: 28% of portfolio (higher than Bajaj Finance)
✖ Regulatory Scrutiny: RBI tightening NBFC norms

Expert Opinions

Morgan Stanley: “Fair valuation could be ₹1,200-1,500 per share.”
SEBI Chairman (2024): “Investors must assess sustainability, not just brand names.”

Investor Checklist Before Applying

Must-Analyze Metrics

Price-to-Book (P/B): Should be under 4x for NBFCs
GNPA Ratio: Below 3% is safe
Growth Visibility: 15%+ AUM growth sustainable?

Red Flags

Excessive OFS (Offer for Sale): Promoters cashing out?
Debt Levels: Debt-to-Equity over 2x is risky

Conclusion: Should You Invest?

HDB Financial’s IPO has strong fundamentals but carries mega-IPO risks. Investors should:

Wait for the RHP (Draft Papers) to check valuation
Compare with Bajaj Finance’s multiples
Avoid FOMO—allocate only 5-10% of portfolio

Final Verdict: If priced reasonably (P/B under 4x), this could be the first ₹10,000 crore+ IPO to reward investors. But caution is key.

Author Profile

Sourashis Chanda

Author (Intern) at Bitlance Tech Hub Private Limited | [email protected]

Sourashis Chanda brings readers their unique perspective on Business, Economy, Health and Fitness. With a background in Health and Physical Fitness of 2years, I am dedicated to exploring [what they aim to achieve with their writing, on the sustainable Economy of the country, various pro tips about business, latest goverment news, with some tips in health are and Fitness.