- India's IPO market surge has boosted interest in unlisted shares, says Kamath
- Nithin Kamath warns retail investors ignore risks in pre-IPO unlisted share deals
- Unlisted shares often have 100–500% markups and high commissions, risking returns
The euphoria surrounding India's red-hot Initial Public Offering (IPO) market has spilled over into the unlisted share space. This has lead into "phenomenally stupid stories" and blind punting that threatens investor capital, according to Nithin Kamath, co-founder of Zerodha.
Kamath has issued the warning on X, cautioning that the "greed" driving this retail investors is causing them to ignore fundamental financial risks associated with pre-IPO deals.
The primary risk, according to Kamath, is the complete erosion of expected returns if the final price band of the actual IPO is lower than the price at which the investor purchased the unlisted shares.
"The greed is causing people to ignore some hard realities: these shares already come with 100–500% markups, ridiculous commissions, and terrible pricing. The biggest risk? There have been numerous cases where the IPO price ended up lower than the price at which people bought shares in the unlisted market," he explained.
Given how hot the IPO market is, I'm hearing some phenomenally stupid stories from the unlisted market. People are blindly punting on so-called "pre-IPO" companies hoping they'll make bigger gains than during the actual IPO.
November 28, 2025
The greed is causing people to ignore some hard…He noted that all these potential "gains" can be wiped out before these stocks even start trading. Kamath said that he had not expected the unlisted share space to become this popular. Colleagues showed me a platform sending WhatsApp blasts pushing this stuff, he added noting that the happenings in the unlisted space is crazy.
The unexpected popularity and aggressive promotion of this niche market have clearly caught the attention of retail investors especially and Kamath expressed his surprise at the extent of this interest.
According to the Zerodha co-founder, this indicates an increasing and frantic, push from retail investors to tap into pre-IPO riches. Kamath's message spotlights the importance of maintaining discipline, reminding investors that chasing hyper-inflated, early-stage valuations is a sure path to losing money.
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