Record-Breaking Returns: Unlisted Companies Shine for Investors in 2024

The year 2024 has been an outstanding duration for investors, especially those who ventured into the unlisted shares market. Even as the benchmark indices like Sensex and Nifty registered profits of over 8%, and the BSE Midcap and SmallCap indices surged by extent of 26% and 29% respectively, it is the unlisted companies that genuinely stole the spotlight. This article delves into the factors behind the record-breaking returns from unlisted corporations and highlights a number of the standout performers that have brought substantial exceptional returns for investors.

The Surge in Unlisted Shares

Unlisted shares, frequently known and often termed as pre-IPO shares that comprise the equity portion in companies. These shares are directly traded over the counter (OTC) and are viewed as a high-risk, high-reward investment or placed directly through private platforms. In 2024, the unlisted shares marketplace witnessed a significant surge in demand and increased trading activity, that is driven by investors in search of outsized returns as compared to listed shares in order to gain early investment advantage.

Experts attribute this surge to numerous elements. Firstly, the vibrant IPO market of 2024 performed a critical function. With 51 out of 69 IPOs in FY24 trading above their issue price and 10-11 delivering over a 100% return on investment (ROI), investors have been advocated to tap into undervalued unlisted stocks to maximize returns at the same time as mitigating the risk of lacking IPO allocations. Additionally, the limited supply of unlisted stocks coupled with surging demand created a bull run within the unlisted market.

Unlisted firms inclusive of Tata Capital, Studds Accessories, Nayara Energy, Motilal Oswal Home Finance, Cochin International Airport, and the National Stock Exchange (NSE) introduced amazing profits, highlighting the untapped potential in this sector. Along with many investors now diversifying their portfolios to include unlisted shares, 2024 has been a game-changer for this emerging asset class.

  

Listed Success Stories from Unlisted Phase

Several companies transitioned from the unlisted space to the listed market, reaping significant gains for early investors.

Companies	Unlisted Price (₹)	Listed Price (₹)	Current Price (₹)	Gain (%)
Waaree Energies	1450	2550	2850	69%
Swiggy	370	420	550	49%
Mankind Pharma	720	1300	1540	114%
Tata Technologies	850	1200	1400	65%

Exciting, right! The above mentioned are some of the most successful shares, which now have listed shares.

Standout Performers in the Unlisted Space at present 2025

Several companies preserve to shine  within the unlisted shares segment, providing substantial opportunities for investors:  

Nayara Energy: One of the pinnacle performers, Nayara Energy, noticed its unlisted shares surge driven by an astounding 346%. The business enterprise's strong financial performance and strategic initiatives in the energy sector contributed to this extraordinary growth.

National Stock Exchange (NSE):  NSE unlisted shares price surged by 143%, pushed upward by its dominant position in the Indian stock market and robust trading volumes.

Cochin International Airport: The unlisted shares of Cochin International Airport soared by means of 92%, reflecting the airport's strategic significance and strong operational overall performance.

Studds Accessories: Known for its motorcycle helmets and other safety product accessories, Studds Accessories saw its unlisted stocks upward trajectory by 76%, thanks to its increasing market presence and product innovation.

Motilal Oswal Home Finance: The unlisted shares of Motilal Oswal Home Finance surged around 50%, fuelled with the aid of the organisation's robust financials and emerging boom in the housing finance sector.

Tata Capital: Tata Capital unlisted shares increased by 47%, this rise demonstrated the company's robust financial overall performance and strategic initiatives in the financial services sector.

Unlisted Companies	Sector	Price (₹), Jan 2024	Current Price (₹)	Growth (%)
MSEI	Financial Services	1	12	1100%
Nayara Energies	Oil & Gas	370	1650	346%
NSE	Financial Services	700	1700	143%
Cochin International Airport	Infrastructure	240	460	92%
SBI Funds Management	Financial Services	1435	2650	85%
Orbis Financial Corporation	Financial Services	245	450	84%
Studds Accessories	Auto Ancillaries	795	1400	76%
Motilal Oswal Home Finance	Financial Services	14	21	50%
Tata Capital	Financial Services	700	1030	47%
Hero Fincorp		1350	1960	45%
HDB Financial Services	Financial Services	850	1200	41%
Oravel Stays (OYO)	Hospitality	65	55	-15%
Chennai Super Kings	Sports & Entertainment	175	195	11%
HDFC Securities	Financial Services	10600	10700	10%
Capegimini Technology Services	IT & Consulting	11700	14500	24%

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Factors Driving the Surge in Unlisted Shares

1. Increased Demand and Trading Activity: Investors sought superior returns amid a bullish sentiment in the market. With listed stocks reaching high valuations, many turned to unlisted stocks for better opportunities. 

   
   

2. Vibrant IPO Market: The thriving IPO market in 2024 further fuelled interest in unlisted shares. The anticipation of future listings encouraged investors to tap into these stocks early to maximize gains. 

   
   

3. Bull Run in the Primary Market: The stellar performance of IPOs in FY24 contributed significantly to the unlisted stock rally. Out of 69 IPOs, 51 traded above their issue price, with 10-11 delivering over 100% returns. 

   
   

4. Limited Supply and Surging Demand: The scarcity of quality unlisted shares created a demand-supply imbalance, driving up prices.  

   
   

5. Increased Investor Appetite: Experts note that the unlisted market witnessed a surge in demand due to its potential to offer outsized returns. With benchmark indices Sensex and Nifty rising over 8% in 2024, investors sought better opportunities in unlisted shares, which delivered significantly higher returns.

   
   

6. Impact of High-Profile IPOs: The listing of prominent companies like Waaree Energies and Swiggy bolstered interest in the unlisted market. Investors are leveraging unlisted shares as a strategy to secure pre-IPO gains, particularly given the stellar ROI of several recent IPOs.

   
   

7. Boost from Private Placements: The Metropolitan Stock Exchange of India (MSEI) saw a late-year surge, following a ₹238 crore equity raise involving notable investors, including the promoters of Groww and Zerodha. This highlighted the unlisted market's ability to attract high-profile investments.

   
   

8. Sectoral Performance: The financial services sector emerged as a leader, with companies like NSE, Tata Capital, and Hero FinCorp delivering robust returns. Similarly, sectors like infrastructure and oil & gas also showcased strong growth.

Overall, this enthusiasm is linked to the stellar performance of the primary unlisted market.

Conclusion

The year 2024 has been a record-breaking period for investors in unlisted companies, with many firms turning towards growth and delivering exceptional returns across diverse sectors. The surge in unlisted shares was driven by increased demand for superior returns, limited supply, and strategic investments. Investing in unlisted shares is indeed very profitable, especially because it provides an opportunity to earn significant potential returns on investment and at the same time, diversifying on shares. 

Nonetheless, investors should remain vigilant and consider or weigh the risks linked with investing in unlisted shares. High valuation risks, lack of liquidity, regulatory and compliance risks, and the unregulated environment are important factors to consider and can’t overlook. Through conducting thorough due diligence and working with reputable reliable platforms, investors can navigate the unlisted market and capitalize on the opportunities it offers.