NSE IPO: Surge In Investors For Unlisted Shares — How To Buy Before The Offering

The National Stock Exchange of India, which is in the process of launching its much-awaited initial public offering, has quietly crossed a milestone — it now has over one lakh investors holding its unlisted shares.

This rise in interest reflects a broader trend where retail and institutional investors alike are increasingly exploring opportunities in the unlisted company space.

Though the NSE’s IPO has been in the pipeline since 2016, the growing number of shareholders is proof of its appeal. SEBI Chairman Tuhin Kanta Pandey has indicated that the much-anticipated IPO may soon receive regulatory approval, further fuelling investor enthusiasm, according to an Economic Times report.

The NSE handles a huge chunk of equity derivatives trading and maintains near-monopoly control over several segments. Of the roughly 22-crore demat accounts operational in India, most of the equity investors end up investing in the NSE by default, Sachin Jasuja, founding partner and head of equities at Centricity, was quoted as saying by ET.

Jasuja added that NSE accounts for around 85% of market share and is also the world's fifth-largest exchange by market capitalisation.

The growing investor interest in NSE's unlisted shares is primarily driven by factors such as improved liquidity, strong financial performance, consistent dividends and anticipation of a future IPO, Lovaii Navlakhi, managing director and CEO of International Money Matters, told ET.

Sanat Mondal, head of private markets at Sanctum Wealth, underlined the exchange’s strong financials. Investors value NSE’s operational efficiency, demonstrated by a 74% Ebitda margin and a 45% return on equity, he said.

According to market experts, to buy shares in the private unlisted market, investors need a Demat account and can access shares through specialised platforms or brokers.

Once investors choose the stock, they need to complete KYC, sign a share purchase agreement and provide payment proof.

Investing in unlisted shares carries a few risks. Navlakhi advised that unlisted shares do not have a fixed pricing system, which can make it hard to determine their true value and may lead to overpaying. Since these companies aren't required to share financial updates regularly, investors often depend on unofficial sources for information.

The main risk is illiquidity, as trades depend on finding a buyer or seller who fulfils their commitments, Anand Mody, head of products and COO at Aikyam Capital Private Limited, told ET.

SEBI mandates a six-month lock-in for pre-IPO investors, meaning shares can’t be sold immediately after listing. These risks necessitate due diligence and realistic expectations, said Vijay Kuppa, CEO at InCred Money, highlighting post-listing constraints.