MUMBAI: Everyone wants a piece of Chennai Super Kings (CSK), it seems.

Unlisted equity shares of the Chennai-based Indian Premier League (IPL) cricket team are getting traded at prices ranging from ₹25 to ₹32 apiece, according to brokers dealing in unlisted stock. “CSK is among the most popular unlisted scrips these days,” said Sandip Ginodia, owner of Abhishek Securities, which specialises in delisted and unlisted shares.

“At least 500,000 CSK shares would be getting traded across the country every day.” The buzz around unlisted equities is not restricted to CSK, according to brokers.

Shares of new-age businesses and startups such as Paytm (One97 Communications), Ola Cabs (ANI Technologies), Oyo Rooms, gaming company Nazara Technologies, Fino Paytech, unlisted HDFC-affiliate HDB Financial Services, small finance banks Capital SFB and Suryoday Bank, Swiggy, Hero FinCorp and Carwale.com, among others, are being traded in sizable lots everyday through brokers dealing in unlisted equities. “We’re seeing buying interest from HNIs and even small investors,” said Rajan Shah, managing director of 3A Capital Services, a broking firm dealing in unlisted shares for close to two decades.

“Investors are looking for new businesses these days… They’re not quite pleased with the way the listed markets have been faring over the past few months.” Unlisted shares enter trading circles when employees dilute their stock options or through private placements by promoters or general shareholders.

No formal market exists for unlisted equities. Used for working capital needsPromoters, especially of startups, use this route to raise small amounts of working capital without higher levels of stock dilution, and also get a valuation reference point for further fundraising, said brokers. “I personally can’t digest investing in startups even now,” says Ginodia, adding, “But then, investors come to us for new-age unlisted companies.

We try to dissuade them, but they don’t listen to us.

In such cases, we simply play the role of market-makers for such stocks.” Apart from retail investors, financial institutions running portfolio management services (PMS) and alternative investment funds (AIF) pick up unlisted shares.

Many of these funds invest to “capture pre-IPO valuations” to take advantage of a rise in valuations following an initial public offering. “Last two years, we’ve seen a lot of AIFs launching focussed pre-IPO funds, which invest in unlisted new-age companies.

These funds are in a sticky spot now,” said Prateek Pant, products and solutions head at Sanctum Wealth Management, sounding a warning.

“Investing in unlisted stocks is a risky game… These are illiquid counters, with almost no exit opportunity.

Investors could get trapped holding these papers if these companies do not go public.” According to brokers, investments in unlisted newage companies got a boost after the Flipkart-Walmart deal.

“People think they can make a lot of money investing in mid-sized startups… They’re willing to risk their money for higher returns,” said Shah of 3A Capital. Shares of most new-age companies are in dematerialised (demat) format, making ownership transfer seamless.

Promoters of such companies declined to comment on the record. “If our shares are seeing interest in the unlisted market, it’s because investors see value in our business,” said the promoter of an IPO-bound company on condition of anonymity.