NSE, Tata Capital, NDSL: IPO-bound listed shares fall up to 20% in pre-IPO market; here's why

Select IPO bound stocks including National Stock Exchange of India (NSE), Tata Capital, National Securities Depository (NSDL) have seen a drop of up to 20 per cent from the their recent highs, following the sharp cut for the price band of HDB Financial Services and limited buzz around their respective IPOs.

HDB Financials' IPO has been a reality check for a number of IPO-bound companies mentioned about. HDB Financial issued its shares of Rs 740 apeice in IPO, a discount of nearly 40 per cent from its price in unlisted highs at Rs 1,250 per share. The stock was listed at Rs 835 apeice, a discount of 33 per cent from its pre-IPO prices.

However, HDB Financial is not the only example. Investors have previous burnt their hands buying IPO-bound stocks at very high prices. UTI Asset Management Company (UTI AMC) hit Rs 900 mark in pre-IPO market, but issued its shares for Rs 554 per share in 20202. Tata Technologies and Waaree Energies also launched their IPOs at up to a 50 per cent discount from their unlisted prices.

Unlisted shares are increasingly capturing the attention of retail investors, thanks to the distinct advantages they offer beyond the traditional stock market. These opportunities allow investors to access high-growth companies early, diversify their portfolios, and avoid some of the common roadblocks associated with public markets, said InCred Equities.

"While unlisted shares offer exciting opportunities, they also come with certain risks that investors should carefully consider before investing. Unlisted shares are freely traded on exchanges. Exits can take time and often depend on finding a willing buyer—making a long-term perspective essential, InCred Equities added, cautioning on the rising demand for IPO-bound stocks.

NSDL has crashed more than 20 per cent to Rs 1,025 in the pre-IPO market. The stock was recently exchanging hands for Rs 1,275-1,300 per share. Its approval to launch the primary offer expires on July 31, 2025. If it fails to launch the IPO before the date, it will need to restart the process.

Similarly, Tata Capital, which is supposed to make its stock market debut by September 2025 as per RBI regulations, has seen a 20 per cent fall from its highs around Rs 1,100 per share. The stock is currently available in the range of Rs 850-875 apeice. Besides them, unlisted shares of NSE have also dropped more than 10 per cent to Rs 2,150 from its recent highs at Rs 2,400.

Analysts and experts tracking the pre-IPO market believe that unlisted shares often see massive rally triggered long-term growth story, strong parentage and fear-of-missing out (FOMO), but fundamentals and financial are vital and eventually, they come into play, leading to a corrections in the unlisted markets.

The recent correction in unlisted IPO-bound stocks reflects the cyclical nature of capital markets. Whether listed or unlisted, equities tend to move in sync with broader economic trends. Corrections, especially during periods of economic slowdown, are both natural and healthy, said Ranjit Jha, Founder & CEO at Rurash Financials

Investors often chase brand reputation without evaluating fair value, which can be risky. HDB Financial Services or Tata Capital have witnessed sharp price movements, with valuations sometimes outpacing fundamentals. It is essential that investors exercise caution, avoid buying at any price, and seek professional financial advice before investing in unlisted stocks," he suggested.

This cautious sentiment among investors has largely been triggered by the HDB Financial Services IPO, Krishna Patwari, Founder and Managing Director of Wealth Wisdom India . "The sharp valuation mismatch has made investors more vigilant about upcoming IPOs, leading to a broader pullback in pre-IPO valuations," he said.