In a recent post on X, Kamthha shared how the property manager contacted Xerod to buy shares in an unwanted company, intending to sell them on a 50% markup immediately. He described the craze for shares of companies as “crazy” in retail investors like the National Stock Exchange (NSE), Metropolitan Stock Exchange (MSEI) and Chennai Super Kings.
“Most investors believe that they can earn easy money by choosing these pre-IPO companies, waiting for the IPO and getting a big list. But it is not easy, and there are all kinds of risks,” Kamath warned.
He pointed to the recent example of HDB Financial Services, noting that its IPO price band was set about 40% from the last trade price on unused platforms, igniting many initial investors.
According to Kamath, the biggest problem in the unlucky shares market is the lack of price discovery. Unlike stock exchanges, where trading occurs in transparent ways and prices reflect market demand and fundamentals, unlisted shares are traded on an uncontrolled platform – no observation and often without excessive markups and commissions.
Next, there is no guarantee of fluid. Some companies can take years to go public – for example, operating for a decade. In the meantime, investors are stuck with eclicid shares and have very little visibility in the company’s performance.
Kamath noted, “Unlike companies also advertise less than the companies listed.” “It’s better to invest in mutual funds than you try to choose unlisted companies.”
To provide an ER -panda reference, Kamath connects the blog post by Zenval’s financial researcher Bhuvan, which breaks down how this platform works and why investors should be careful.
“They collect unwanted shares such as NSE, Chennai Super Kings, Boat, YO O Room, etc., add markup to the price and then sell them,” Bhuvan wrote. “At the top of the markups, there is also a commission. In many cases, markups plus commissions can be anywhere from 30-40% to 100-200%.”
Bhuvan noted that after the reputation investment boom draws more loose interest in these markets, fuel is done by a simple pitch: Find the next big company before it is listed. But the reality often does not match the promise.
The blog also cited recent losses, including HDB Financial Services, where the shares once traded above 1,500 in the unused market but later cost Rs 700-740 in the IPO band. Similarly, in 2023, investors lost to 60% after the stock capital was reduced in Reliance Retail.
In December 2024, Sebi issued a circular warning that the transaction on such an uncontrolled platform could be illegal:
The regulator said, “Some electronic platforms and/or websites are facilitating transactions in the unique securities of public limited companies. Such activities are in violation of the Securities Contract (Regulation) Act, 1956 and the SEBI Act, 1992.”
Bhuvan terminated his blog with a frank reality check for retail investors:
“If you do not have the edge, you are only keeping the age-old tradition of donating money to retail investors-without tax benefits.”
The message of Kamath and Bhuvan is clear: the unmistakable shares are high risk, low transparency and often over -priced. Retail investors stick to regulatory investment options such as mutual funds, ETFs or direct equity through stock exchanges.
(Connection: The recommendations, suggestions, views and views of the experts are their own. This does not represent opinions of economic time)
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