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NSE IPO Drains Liquidity from Unlisted Shares
21 Oct
Summary
- Unlisted share trading activity dropped by nearly 50% after NSE's listing.
- NSE previously accounted for over half of the unlisted market's trading volume.
- Newer companies like MSEI and Pharmeasy's parent are gaining interest.
Trading volumes in the unlisted share market have experienced a sharp decline of nearly 50% since the National Stock Exchange of India (NSE) debuted on the stock market last month. This significant drop is attributed to the NSE's previous dominance, accounting for over half of the trading activity in this unregulated over-the-counter space.
For over a decade, the NSE was a prime focus for investors in the unlisted market. Its much-anticipated IPO in September saw millions of shares change hands daily, a process that has now ceased. Brokers note that while such shifts are cyclical, liquidity and attention naturally move.
However, emerging interest is now seen in other unlisted stocks. The Metropolitan Stock Exchange of India (MSEI) has become a prominent actively bought stock, with companies like Transline Technologies, Quality Enviro Engineers, and Sun Drops Energia also attracting attention. API Holdings, the parent of Pharmeasy, Oravel Stays, and Hindustan Power Exchange are also popular.
Despite the current moderation in volumes, market participants are optimistic about future opportunities. While selling less-known companies requires more effort in explaining their business models and growth stories, the potential for new investment remains, indicating a continued dynamic in the pre-IPO market.
