From Rs 1,500 to Rs 2,300: NSE unlisted shares rally over 50% in a week: 6 reasons for sharp upmove

Shares of National Stock Exchange of India (NSE) have been soaring sharply higher in the unlisted market as the stock surged more than 50 per cent within a week. The stock, which was being sold for Rs 1,500 last Thursday is currently being traded around Rs 2,300 in the pre-IPO market.

A slew of news flow around NSE and its proposed IPO is pushing the demand higher among the investors, who are rushing to buy the stock in the pre-IPO market. There are six key reasons which are pushing NSE’s stock price higher in the unlisted market.

First, NSE is gearing up for regulatory clearance for its ongoing litigation with Sebi in the co-location case. This can further remove the roadblocks for its primary offering. Some reports suggest that NSE has chalked out Rs 1,000 crore to settle the case. Even the Sebi chairman Tuhin Kanta Pandey said that the application for NSE’s IPO, India’s largest stock exchange, was not something that cannot be sorted.

Secondly, the regulatory control over buying or selling of NSE shares has eased down lately. With the new ISIN number coming, delivery of NSE shares in the buyer’s demat account has dropped to one to two days, which earlier used to take up to two months or even more. The total number of NSE shareholders crossed 1 lakh a few days ago, highest for any unlisted company.

Third, there is a strong demand for NSE’s unlisted shares among the retail investors, particularly after its recent quarterly results and 4:1 bonus action. This not only has increased the liquidity among the investors, but a strong dividend yield for the investors also supports the stock price in the unofficial market.

Fourth, NSE has seen a sharp rise in its valuations with increased global interest. US-based Drew Investments is backing NSE at Rs 1,550-1,700 valuations, while the valuation of NSE has soared nearly to 5.7 lakh crore ($50 billion), drawing fresh HNI and retail investors. Some people are also drawing parallels with BSE, which is also supporting the stock prices.

Fifth, NSE has a strong market dominance. NSE is the world’s largest derivative exchange and The NSE ranks as the world’s second-largest stock exchange by trading volume. Besides that, with 268 IPOs raising 1.67 lakh crore, NSE reinforced its market leadership in the capital markets, boosting investors confidence.

Last, but not the least, investors are optimistic about its upcoming IPO, which is expected to unlock substantial value, driving demand for unlisted shares. Pandey, recently said that  all the outstanding issues will be resolved. “I can’t give you the timeline but it will be done soon. NSE and SEBI are talking. They are resolving the issues,” Pandey said.

NSE posted a 16 per cent year-on-year (YoY) rise in revenue at Rs 17,141 crore and 47 per cent YoY surge in its net profit at Rs 12,188 crore for the financial year 2024-25. The leading stock exchange also announced a dividend of Rs 35 per share.

NSE holds a dominant position with 99.8 per cent market share in equity futures, 94.6 per cent in the cash market, 93.9 per cent in currency derivatives, and 81.2 per cent in equity options as of Q4FY2, said InCred Money Team. Its financials back this dominance. Its results have reinforced investor interest, it said.

“NSE has consistently attracted attention in the unlisted space due to its strong business fundamentals and critical role in India’s financial infrastructure. With FY25’s solid numbers, investor demand has only increased, reflected in its shareholder base,” InCred added. “Given NSE’s scale, profitability, and investor interest, it might have the potential to be one of India’s largest IPOs.”