Pre-IPO Shares of NSE, Hero FinCorp, and HDB Financial See Strong Demand Amid Market Revival
This momentum has sparked renewed investor interest in unlisted shares, particularly of companies like the National Stock Exchange (NSE), Hero FinCorp, and HDB Financial Services.
Mumbai: The primary market is witnessing a resurgence, with a series of IPOs launched in recent weeks across both main board and SME segments. This momentum has sparked renewed investor interest in unlisted shares, particularly of companies like the National Stock Exchange (NSE), Hero FinCorp, and HDB Financial Services.
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Unlisted Shares Hit New Highs
Investor enthusiasm has pushed the prices of unlisted shares to new highs. NSE’s unlisted stock surged from ₹1,600 on May 1 to an all-time high of ₹2,375 by May 31, following positive discussions with SEBI about a possible IPO. Similarly, Hero FinCorp and HDB Financial have seen their unlisted shares climb to ₹1,650 and ₹1,250 respectively, ahead of their expected public listings.
Also Read: Financial Stocks Rally: Bank Nifty Hits New High as Market Closes in Positive Territory
Investor Sentiment Driving Pre-IPO Valuations
According to Krishna Patwari, Founder and MD of Wealth Wisdom India, the spike in prices is driven by growing optimism around these companies’ prospects. “Investors are keen to secure positions in these firms ahead of their IPOs, anticipating healthy listing gains,” Patwari said.
Market experts at Incred Money echoed this sentiment, stating, “Prices of unlisted shares are shaped by demand-supply dynamics and investor sentiment. Like listed stocks, premiums rise when demand outpaces supply. However, investors should not mistake rising prices for true valuation.”
Risks Involved in Pre-IPO Investing
Despite the excitement, analysts warn that pre-IPO investments carry certain risks—particularly for retail investors.
Liquidity Risk
Unlisted shares are not easily tradable on formal exchanges, making it difficult for investors to exit quickly without a buyer on the other side.
Lock-in Period
SEBI regulations mandate a six-month lock-in period for pre-IPO investors after a company goes public, preventing early profits from being realized immediately.
Valuation and Market Volatility
Prices in the unlisted market are not as transparent and can be influenced by speculation. Shares that trade at a premium may still list at a discount, catching investors off guard.
Lack of Transparency
Most unlisted companies do not publish detailed financials regularly, making it harder for investors to assess real value and future performance.
Cautious Optimism Recommended
While the rising interest in unlisted shares suggests optimism in India’s capital markets, experts advise a balanced approach. Thorough due diligence, understanding of risks, and realistic expectations are key for investors looking to tap into pre-IPO opportunities.
