SEBI Chairman Tuhin Kanta Pandey said that the country’s most-anticipated IPO, that of the National Stock Exchange (NSE), may soon get a green light from the market regulator. The NSE recently crossed a significant milestone—it now has over 1 lakh shareholders, making it the most widely held unlisted company in India. This is significant as even several listed firms in the country do not have an investor base like this.
While NSE’s IPO has been in the works since 2016, the sheer number of investors having interest in shares of the company signals the strong appetite for big players in the unlisted space. It also reflects a larger shift in investment choices. Over the past few years, investing in unlisted shares, popular among industry insiders and private equity players, has expanded its reach. Retail investors, family offices, and young professionals are taking bets on unlisted firms like NSE, Tata Capital, and PharmEasy.
So, what makes NSE so popular among investors? NSE is India’s largest stock exchange by volume and turnover. It handles the bulk of equity derivatives trading and has a near-monopoly in several segments.
Sachin Jasuja, Founding Partner - Head Equities, Centricity, says, “From the approximately 22-crore demat accounts operational in India, most of the equity investors end up investing in the NSE by default, since besides being the country's leading stock exchange, accounting for around 85% of market share, it is also the world's fifth-largest exchange by market capitalization. Operating in a virtual duopoly with significant institutional backing, NSE enjoys strong support from both government and non-government entities, further reinforcing its credibility and dominance.”
Lovaii Navlakhi, Managing Director & CEO of International Money Matters, says “NSE dominates India’s equity and derivatives trading, holding over 90% market share. The growing investor interest in NSE's unlisted shares is primarily driven by factors such as improved liquidity, strong financial performance, consistent dividends, and anticipation of a future IPO.”
The demand for this share among investors has risen considerably with time which also reflected in its price appreciation. “NSE's unlisted shares have experienced substantial price appreciation. The prices surged over 20% in off-market transactions. Adding to this, the stock availability of NSE has evolved over the past few years making it more accessible to retail investors. Before 2022, NSE shares were traded at low volumes in the unlisted space due to limited sellers, regulatory caution post the colocation controversy and no clarity on the IPO timeline. As a result, investors often had to wait 2–3 months or more to access even small quantities, and prices were quoted in wide ranges,” adds Navlakhi.
Venkat Moorty, President, PMS, Savart, a Hyderabad-based investment advisory firm, further says, “The reason why NSE became very popular within one year of its inception was electronic trading, low entry barriers and faster settlements.”
Another reason why NSE is so popular among investors are its robust financials. Sanat Mondal, Head - Private Markets at Sanctum Wealth, a Mumbai-based private wealth management firm catering to high-net-worth individuals (HNIs) and ultra-HNIs in India and abroad, says, “Investors value NSE’s operational efficiency, demonstrated by a 74% EBITDA margin and a 45% return on equity. In FY25, its net profit rose 47% year-on-year to ?12,187 crore, while total income increased by 17% to ?19,177 crore. Both EBITDA and PAT margins have seen health increase during the same period, indicating robust operational efficiency.”
Both NSE and BSE have large investor bases. “As of May 2025, the NSE registered approximately 22.3 crore total investor accounts. Interestingly, it took over 25 years to reach 4 crore investors (by March 2021), but the growth since then has been exponential—driven by simplified KYC, better financial literacy (thanks to finfluencers), and broader participation across investment products. In comparison, the BSE currently has nearly 21.6 crore registered investors,” says Vijay Kuppa, CEO at InCred Money.
“With over 11.3 crore registered investors and near-total geographic coverage, NSE leads in both equity and derivative segments, commanding an 87.4% market share in equity options. Retail participation is strong in the cash segment, while institutions dominate derivatives and index-linked instruments. BSE, although smaller in trading volume, serves a niche but growing market—particularly in SMEs, debt instruments, and long-term investment avenues,” says Mondal.
This unique position of NSE has resulted in increased investors interest off late. “During the last 2 years, greater participation from retail investors and better regulatory clarity have made NSE stock more investible and trackable in the private market. However, it is important to note that easier access to a stock does not necessarily indicate attractive pricing or ideal entry levels. Due to the recent surge in trading volumes, NSE’s unlisted shares are currently trading at a premium compared to listed peers like BSE,” says Navlakhi.
How can you buy unlisted shares in the stock market?
Retail investors can buy unlisted shares through wealth management firms or brokers. “There are many wealth management companies offering the sale and purchase of unlisted stocks, including Centricity to consumers across the country, and besides, other well-known wealth management firms such as Nuvama and InCred also provide their clients with opportunities to invest in unlisted shares like NSE,” says Sachin Jasuja.
Lovaii Navlakhi explains the process of buying unlisted shares, “To buy shares in the private unlisted) market, the first requirement is to have a demat account. Investors can access unlisted shares through specialized platforms or brokers such as UnlistedZone, Planify, Altius Investech, or by purchasing from existing shareholders and institutions that deal with private market transactions. It is advisable to use trusted platforms, and if there is limited knowledge, consulting a financial advisor is recommended. Once the unlisted stock and share lots are decided, compare prices across multiple sources to negotiate the purchase price effectively. Post that, Know Your Customer (KYC) documents, including PAN, Aadhaar, and demat account details are mandatory. Next, sign the share purchase agreement. It’s crucial to retain proof of payment, especially when a third party is involved, for record-keeping and potential dispute resolution. Finally, always ensure to receive confirmation from the broker to avoid any issues or scrutiny in the future.”
However, the process of buying shares in unlisted companies is slightly different from buying shares of companies which are traded in the stock exchanges. Sanat Mondal says, “These shares are generally acquired through private placements, pre-IPO rounds, or secondary transactions. The market is largely driven by private deal networks facilitated by wealth management firms. However, retail investors now have access through platforms like UnlistedZone, Altius Investech, and CapTable, which offer curated opportunities previously limited to institutional investors. These platforms help bridge the gap by facilitating off-market transactions and providing basic due diligence. Still, investors must be cautious, as liquidity is limited and holding periods can be long.”
Risks of investing in unlisted shares in the stock market
While investing in unlisted shares may look promising at first, it has its own risks, some of which are detailed below:
Lovaii Navlakhi says, “Unlisted shares lack a standardized pricing mechanism, which means prices can vary widely across brokers. This creates valuation ambiguity and increases the risk of overpaying. Unlike listed companies, unlisted firms are not obligated to publish their financials regularly, which may mislead investors to rely on intermediaries or informal sources while decision making. Additionally, unlisted shares are significantly less liquid, making it difficult to find buyers at the time of sale.”
As unlisted companies have lesser scope for regulation it makes the investment process riskier for investors. “While SEBI does regulate certain aspects such as stamp duty and depository participant (DP) charges, the overall unlisted market operates with far less oversight compared to listed markets. For unlisted shares, the holding period is 24 months to qualify as long-term assets, and the applicable rate is 12.5%. For less than 24 months, marginal tax rates are applicable.” adds Navlakhi.
Anand Mody, Head Products and COO, Aikyam Capital Private Limited, a firm whose clients have invested in unlisted shares of NSE, adds, “The main risk is illiquidity, as trades depend on not only finding a buyer or seller, but ensuring they fulfil their commitments. The sector is quite unorganized and hence there are various unsystematic risks associated. Other risks include price uncertainty due to the lack of a centralized order book, manual settlement, and limited financial information.”
Vijay Kuppa, CEO at InCred Money, further adds, “Post listing, SEBI mandates a 6-month lock-in period for pre-IPO investors. This means even if the company lists successfully, you won’t be able to sell immediately. While these risks exist, they can be managed by investing wisely, conducting due diligence, and having realistic expectations. And since unlisted shares inherit high risk, one should allocate only a small portion of their portfolio.”
While NSE’s IPO has been in the works since 2016, the sheer number of investors having interest in shares of the company signals the strong appetite for big players in the unlisted space. It also reflects a larger shift in investment choices. Over the past few years, investing in unlisted shares, popular among industry insiders and private equity players, has expanded its reach. Retail investors, family offices, and young professionals are taking bets on unlisted firms like NSE, Tata Capital, and PharmEasy.
So, what makes NSE so popular among investors? NSE is India’s largest stock exchange by volume and turnover. It handles the bulk of equity derivatives trading and has a near-monopoly in several segments.
Sachin Jasuja, Founding Partner - Head Equities, Centricity, says, “From the approximately 22-crore demat accounts operational in India, most of the equity investors end up investing in the NSE by default, since besides being the country's leading stock exchange, accounting for around 85% of market share, it is also the world's fifth-largest exchange by market capitalization. Operating in a virtual duopoly with significant institutional backing, NSE enjoys strong support from both government and non-government entities, further reinforcing its credibility and dominance.”
Lovaii Navlakhi, Managing Director & CEO of International Money Matters, says “NSE dominates India’s equity and derivatives trading, holding over 90% market share. The growing investor interest in NSE's unlisted shares is primarily driven by factors such as improved liquidity, strong financial performance, consistent dividends, and anticipation of a future IPO.”
The demand for this share among investors has risen considerably with time which also reflected in its price appreciation. “NSE's unlisted shares have experienced substantial price appreciation. The prices surged over 20% in off-market transactions. Adding to this, the stock availability of NSE has evolved over the past few years making it more accessible to retail investors. Before 2022, NSE shares were traded at low volumes in the unlisted space due to limited sellers, regulatory caution post the colocation controversy and no clarity on the IPO timeline. As a result, investors often had to wait 2–3 months or more to access even small quantities, and prices were quoted in wide ranges,” adds Navlakhi.
Venkat Moorty, President, PMS, Savart, a Hyderabad-based investment advisory firm, further says, “The reason why NSE became very popular within one year of its inception was electronic trading, low entry barriers and faster settlements.”
Another reason why NSE is so popular among investors are its robust financials. Sanat Mondal, Head - Private Markets at Sanctum Wealth, a Mumbai-based private wealth management firm catering to high-net-worth individuals (HNIs) and ultra-HNIs in India and abroad, says, “Investors value NSE’s operational efficiency, demonstrated by a 74% EBITDA margin and a 45% return on equity. In FY25, its net profit rose 47% year-on-year to ?12,187 crore, while total income increased by 17% to ?19,177 crore. Both EBITDA and PAT margins have seen health increase during the same period, indicating robust operational efficiency.”
Both NSE and BSE have large investor bases. “As of May 2025, the NSE registered approximately 22.3 crore total investor accounts. Interestingly, it took over 25 years to reach 4 crore investors (by March 2021), but the growth since then has been exponential—driven by simplified KYC, better financial literacy (thanks to finfluencers), and broader participation across investment products. In comparison, the BSE currently has nearly 21.6 crore registered investors,” says Vijay Kuppa, CEO at InCred Money.
“With over 11.3 crore registered investors and near-total geographic coverage, NSE leads in both equity and derivative segments, commanding an 87.4% market share in equity options. Retail participation is strong in the cash segment, while institutions dominate derivatives and index-linked instruments. BSE, although smaller in trading volume, serves a niche but growing market—particularly in SMEs, debt instruments, and long-term investment avenues,” says Mondal.
This unique position of NSE has resulted in increased investors interest off late. “During the last 2 years, greater participation from retail investors and better regulatory clarity have made NSE stock more investible and trackable in the private market. However, it is important to note that easier access to a stock does not necessarily indicate attractive pricing or ideal entry levels. Due to the recent surge in trading volumes, NSE’s unlisted shares are currently trading at a premium compared to listed peers like BSE,” says Navlakhi.
How can you buy unlisted shares in the stock market?
Retail investors can buy unlisted shares through wealth management firms or brokers. “There are many wealth management companies offering the sale and purchase of unlisted stocks, including Centricity to consumers across the country, and besides, other well-known wealth management firms such as Nuvama and InCred also provide their clients with opportunities to invest in unlisted shares like NSE,” says Sachin Jasuja.
Lovaii Navlakhi explains the process of buying unlisted shares, “To buy shares in the private unlisted) market, the first requirement is to have a demat account. Investors can access unlisted shares through specialized platforms or brokers such as UnlistedZone, Planify, Altius Investech, or by purchasing from existing shareholders and institutions that deal with private market transactions. It is advisable to use trusted platforms, and if there is limited knowledge, consulting a financial advisor is recommended. Once the unlisted stock and share lots are decided, compare prices across multiple sources to negotiate the purchase price effectively. Post that, Know Your Customer (KYC) documents, including PAN, Aadhaar, and demat account details are mandatory. Next, sign the share purchase agreement. It’s crucial to retain proof of payment, especially when a third party is involved, for record-keeping and potential dispute resolution. Finally, always ensure to receive confirmation from the broker to avoid any issues or scrutiny in the future.”
However, the process of buying shares in unlisted companies is slightly different from buying shares of companies which are traded in the stock exchanges. Sanat Mondal says, “These shares are generally acquired through private placements, pre-IPO rounds, or secondary transactions. The market is largely driven by private deal networks facilitated by wealth management firms. However, retail investors now have access through platforms like UnlistedZone, Altius Investech, and CapTable, which offer curated opportunities previously limited to institutional investors. These platforms help bridge the gap by facilitating off-market transactions and providing basic due diligence. Still, investors must be cautious, as liquidity is limited and holding periods can be long.”
Risks of investing in unlisted shares in the stock market
While investing in unlisted shares may look promising at first, it has its own risks, some of which are detailed below:
Lovaii Navlakhi says, “Unlisted shares lack a standardized pricing mechanism, which means prices can vary widely across brokers. This creates valuation ambiguity and increases the risk of overpaying. Unlike listed companies, unlisted firms are not obligated to publish their financials regularly, which may mislead investors to rely on intermediaries or informal sources while decision making. Additionally, unlisted shares are significantly less liquid, making it difficult to find buyers at the time of sale.”
As unlisted companies have lesser scope for regulation it makes the investment process riskier for investors. “While SEBI does regulate certain aspects such as stamp duty and depository participant (DP) charges, the overall unlisted market operates with far less oversight compared to listed markets. For unlisted shares, the holding period is 24 months to qualify as long-term assets, and the applicable rate is 12.5%. For less than 24 months, marginal tax rates are applicable.” adds Navlakhi.
Anand Mody, Head Products and COO, Aikyam Capital Private Limited, a firm whose clients have invested in unlisted shares of NSE, adds, “The main risk is illiquidity, as trades depend on not only finding a buyer or seller, but ensuring they fulfil their commitments. The sector is quite unorganized and hence there are various unsystematic risks associated. Other risks include price uncertainty due to the lack of a centralized order book, manual settlement, and limited financial information.”
Vijay Kuppa, CEO at InCred Money, further adds, “Post listing, SEBI mandates a 6-month lock-in period for pre-IPO investors. This means even if the company lists successfully, you won’t be able to sell immediately. While these risks exist, they can be managed by investing wisely, conducting due diligence, and having realistic expectations. And since unlisted shares inherit high risk, one should allocate only a small portion of their portfolio.”
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