On the IPO buzz, the NSE share price has gone up by 45% in 3-4 months. Will the uptrend continue?

While there is still suspense over the timing of the National Stock Exchange’s (NSE) initial public offering (IPO), the buzz surrounding its public issue has increased in the last 3-4 months, leading to a 35-fold rise in its share price. 45% in the unlisted market.

An analyst said that 3-4 months ago Rs. 4,300, NSE shares are now trading at Rs. 5,800 per share, representing a gain of 35%. However, it admitted that prices have stagnated as there are no longer enough shares trading amid the growing debate surrounding its listing.

The analyst said that investors who have already taken positions are waiting for its listing as the stock shows and commands a premium over the current market price.

According to a website called ‘Unlisted Zone’, the NSE share price is around Rs. 6,200, representing a growth of 45% over the period.

Anticipation around the NSE IPO is strong as it is a global leader (derivatives), and since NSE approached the regulator – Securities and Exchange Board of India (SEBI) for an NOC for its public issue, so did its peers BSE and MCX’s re -Rating has been found.

The BSE share price has gained nearly 50% in the past one month while the MCX has gained 12%. Both have given multibagger returns in the last 12 months.

Analysts say the valuation of unlisted companies is more complex than their listed counterparts and one of the primary reasons is information asymmetry.

However, the privately held NSE was valued at around $17-$18 billion when private equity firm CrisCapital Management Co. executed a $700 million continuation fund in May this year to hold the company longer, a Bloomberg report said. KRIS holds a 4% stake in the NSE.

While the IPO news has kept the pot boiling, its 4:1 bonus share issue has also been the reason behind the recent movement in the price. In May, NSE’s board announced the issue and later fixed November 2 as the record date.

Regarding the likely timing of the issue, an expert said that given the current uncertainties such as geopolitical unrest, economic concerns in the US and China, the NSE will assess the situation before moving forward.

Clearing Decks

NSE’s board will once again seek a no-objection certificate (NOC) from the capital markets regulator to launch its much-awaited initial public offering, ET had earlier reported citing sources in the know of the development.

Earlier in April, MD and CEO Ashish Chauhan had said that the NSE is ready to start its IPO process but is awaiting Sebi’s approval.

If the exchange decides to sell 10% of its equity in the issue, the size of the IPO is Rs. 30,000 crore is expected. In May 2022, Life Insurance Corporation Rs. 21,008 crore issue is the largest IPO in India, followed by Paytm’s November 2021 Rs. 18,300 crore IPO.

The exchange initially filed its draft red herring prospectus (DRHP) in 2016, but the regulator rejected the proposal in 2019, instructing the exchange to refile after resolving the colocation probe.

In September, the capital markets regulator disposed of the case against the leading stock exchange and its executives Ravi Narayan, Chitra Ramakrishna and others in the co-location case due to absence of sufficient material evidence.

Following this, the NSE and its former chief executive Vikram Limaye and eight others took up with market regulator Sebi a case of misuse of the Trading Access Point (TAP) system by certain brokers to the tune of Rs. 643 crores was settled.

How do companies trade in the unlisted market?

The unlisted market refers to the trading of shares of companies that are not yet listed on a stock exchange. Most of these companies are privately held and their shares are often owned by founders, venture capitalists and private equity firms.

“Unlisted companies typically operate in emerging sectors such as technology, which reflect the country’s new economic architecture. However, due to lack of public information, these stocks often trade at a discount compared to their listed counterparts,” says Manish Bhandari, CEO. is and portfolio manager at Valam Capital Advisors.

What are the ways to buy shares in unlisted market?

Unlike listed shares, which are easily accessible to anyone with a demat account, unlisted shares are hard to come by. Transactions in the unlisted space often take place through intermediaries or over-the-counter (OTC) markets.

Retail investors can buy shares through private placements or off-market transactions, says Krishna Patwari, founder of Wealth Wisdom India.

Says Patwari, “Platforms like WWIPL.com specialize in facilitating these deals. Additionally, employee stock options (ESOPs) allow retail investors to purchase shares directly from employees, adding another avenue for entry into the unlisted space.

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(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times)