Grey market interest in NCDEX rises amid NSE IPO buzz

Unlisted shares of National Commodity & Derivatives Exchange (NCDEX) and Metropolitan Stock Exchange (MSE) have witnessed a sharp uptick in demand and price in the grey market. The upward move comes amid National Stock Exchange's (NSE) long-awaited initial public offering (IPO). The farm derivates' exchange's (NCDEX) unlisted shares gained 27.5 per cent to Rs 255-level in just three days, according to Wealth Wisdom India.

Investors are increasingly turning their attention to unlisted shares of financial institutions, according to Krishna Patwari, Founder and Managing Director of Wealth Wisdom India. "For instance, the share price of the National Commodity and Derivatives Exchange (NCDEX) rose from Rs 200 on May 24 to Rs 255 on May 27. This uptick highlights the growing appetite among investors for unlisted equity investments," he noted.

"Heightened activity can be seen in the unlisted shares of NCDEX ahead of NSE's potential listing," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

The NSE, India's largest stock exchange, has been working towards its IPO for several years. Regulatory hurdles and governance issues had delayed the listing but it now appears that the exchange has made substantial progress in securing necessary clearances from the Securities and Exchange Board of India (Sebi).

It is important to note that unlisted shares trade over the counter in a loosely regulated grey market, where prices are influenced more by investor sentiment and scarcity than by underlying fundamentals. Despite its risks and lack of liquidity, this market often offers early indicators of investor interest in upcoming IPOs and related sectors.

On Tuesday, the unlisted shares of NSE surged to an all-time high of Rs 2,200, continuing their strong upward momentum ahead of the stock exchange's much-anticipated IPO. The latest valuation pegs the exchange's market capitalisation (m-cap) at around Rs 5.49 lakh crore.

"The rise in NSE's unlisted share price reflects strong investor demand ahead of the IPO, with expectations of significant returns post-listing," Patwari of Wealth Wisdom India stated.

Speaking at a recent event, Sebi chairperson Tuhin Kanta Pandey confirmed that regulatory issues delaying NSE's IPO are largely being addressed. "All the outstanding issues will be resolved and we will move forward. I can't give you the timeline, but it will be done soon. NSE and Sebi are talking. They are resolving the issues," the Sebi chief said.

Investor anticipation remains high, especially in the grey market, where optimism is building amid signs of progress on regulatory clearances.