INSUBCONTINENT EXCLUSIVE:
New Delhi: Ace investor Rakesh Jhunjhunwala recently advised investors to keep off the unlisted space
The Big Bull sees a big bubble in the unofficial market for unlisted shares, which he said may burst in the near term
dealers of unlisted shares only partially concur with the view
They argue that while there are some unicorn stocks, which are unreasonably overvalued, not all unlisted shares trade at premium
valuations.
Analysts from the unlisted space say Jhunjhunwala might be pointing towards stocks like Reliance Retail, which was hugely
There are some stocks that trade at very high valuations
Investors overvalue these stocks and pour ample wealth in them
at a valuation above its earnings, there are high chances of the bubble getting burst
that most of the growth has come to PE investors
Nazara Technologies, an unlisted entity
The scrip plunged over 50 per cent in the unlisted market in last one year to trade at Rs 550.
Abhishek Chaturvedi, Partner, Ultimate
Wealthowl said retail investors often fall for the buzz
usually rush in to the unlisted space when there is a buzz about an IPO
When PEs look for exit at premium valuations, small investors enter the stock
unlisted market are keen to bet on e-commerce and startup unicorns like Ola, Oyo, Paytm and Flipkart at premium valuations
However, none of them has posted a profit yet.
They say every investor wants to multiply wealth in the unlisted market within a short span
space as disclosures, volumes and liquidity are low
However, the risk-reward is often better, which is what usually draws high net worth investors into this space.
Sandip Ginodia, Founder,
Abhishek Securities, says unlisted shares in the e-commerce space can be minefields
They are not reliable investments
have a strong parentage, robust balance sheets, sound managements and good business value
like Metropolitan Stock Exchange of India, Essar Steel and Kitply Industries have destroyed investor wealth
On the other hand, HDB Financial, Chennai Super Kings and Hero FinoCorp have become multibaggers in off-market trade in last 3-4
years.
Delhi-based investor Ashish Chugh said the unlisted space is full of new-age businesses
when benchmarked against their listed counterparts
The valuation of a business is primarily a function of its ability to generate cash flows, grow up in size and become a dominant player in