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NSE unlisted shares: NSE unlisted shares soar 80% in six months

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MUMBAI: The National Stock Exchange, the country’s biggest bourse, has seen its valuations surge 80% in the past six months as investors begin to factor in strong growth amid strong retail trading volumes and returns from IPOs last year.

NSE shares are currently traded at Rs. 1,750 apiece in the unlisted market compared with Rs. 900-1000 in September last year, said brokers. At the current price in the unlisted market, NSE is valued at Rs 87,000 crore.

“NSE shares in the unlisted market rallied sharply over the last six to eight months following excellent numbers the stock exchange has reported in the last few quarters,” said Narottam Dharawat, founder of Mumbai-based Dharawat Securities. “Currently, NSE shares are traded in the range Rs 1700-1800 apiece”.

For the nine months ended December 2020, NSE has reported 47% growth in consolidated revenue at Rs 4,238 crore while its net profits jumped 116% to Rs 3,191 crore during this period. NSE holds nearly a monopoly in equity trades with 92% market share in the cash market and nearly 100% in the derivatives segment.

“Rising interest in the stock market triggered a demand for unlisted NSE shares,” said Sunil Chandak, equity strategist at Gennext Investrade, a Mumbai-based firm dealing in unlisted stocks. “There is no fresh auction since Diwali last year, which has sparked off secondary trades,” he said.

Last year, State Bank of India sold about 1% stake in the stock exchange. SBI currently holds 3.23% stake in the bourse while SBI Capital Market and Stock Holding Corporation owns 4.33% and 4.44% stake respectively. Life Insurance Corporation, the biggest investor in the exchange holds 12.51%.

Billionaire investor and founder of D’Mart Radhakishan Damani, picked up 1.58% stake in the bourse last year. Damani purchased 7.8 million shares of NSE, which constitutes a 1.58% stake in the exchange. The value of the stake is estimated to be around Rs 700-900 apiece. He made the investment in his personal capacity.

The only listed stock exchange BSE has rallied 11% in the last six months and 48% in the last one year.

Buying NSE’s unlisted shares is not easy as the stock exchange has imposed stricter compliance that involves Know Your Customer, funding sources, and background check of investors. The exchange takes time to extend approval, said brokers. NSE’s proposed listing of shares is likely next year.

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