Is Unlisted Investing a Lottery? The Story of an NSE Investor Who Bought Shares at Rs 1,827

NSE IPO Gives Unlisted Investors a Reality Check

The much-awaited initial public offering of the National Stock Exchange of India (NSE) is turning the spotlight on the risks of investing in unlisted shares.

For years, NSE shares have been actively traded in India's unlisted market, with investors attracted by the exchange's dominant position in equities and derivatives. However, the IPO pricing has come in below some of the valuations seen in the unlisted market.

The experience of investor Mahesh Gupta provides a useful example of how pre-IPO investing can produce unexpected outcomes.

Investor Bought NSE Shares at Rs 1,826.85

According to NSE's IPO offer documents, Mahesh Gupta acquired 500 NSE equity shares at Rs 1,826.85 per share.

NSE has now fixed an IPO price band of Rs 1,700 to Rs 1,785 per share. At the upper end of the IPO price band, the shares would still be priced Rs 41.85 below Gupta's acquisition cost.

If all 500 shares are sold at Rs 1,785, the difference between his purchase price and the IPO price would be approximately Rs 20,925. That represents a notional decline of about 2.3% from his acquisition price, before considering other factors such as allocation and eventual listing performance.

Why Did the IPO Price Come Below Expectations?

NSE's IPO price band of Rs 1,700-1,785 is below the Rs 2,000-2,100 range that many investors had previously expected.

At the upper end of the price band, NSE is seeking a valuation of approximately Rs 4.4 lakh crore.

The lower pricing reflects a more cautious approach towards valuation and future growth, particularly given NSE's heavy dependence on derivatives-related revenue.

NSE Still Has a Dominant Market Position

Despite the lower IPO valuation, NSE remains one of India's most important financial-market institutions.

As of June 2026, the exchange controlled more than 93% of India's cash-market turnover, nearly 100% of equity-futures turnover and around 75% of equity-options turnover.

Its dominant position remains a major attraction for investors considering the IPO.

Around 60% of NSE Revenue Comes From Derivatives

One of the key concerns highlighted by analysts is NSE's dependence on derivatives.

Around 60% of NSE's operating revenue comes from derivatives, while the rapid growth of the options market has faced regulatory and volume-related challenges.

Investors therefore need to consider whether NSE can continue growing beyond the current derivatives-led expansion and benefit from broader financialisation in India.

Is Unlisted Investing Really a Lottery?

The NSE example does not mean that investing in unlisted shares is literally a lottery.

However, it demonstrates why unlisted investing can involve substantially greater uncertainty than buying a listed stock.

An unlisted share does not have the same transparent, continuously quoted market price available on a stock exchange. Transactions can be infrequent, and the price may depend heavily on negotiations between buyers and sellers.

As a result, the price an investor pays in the unlisted market may differ significantly from the eventual IPO price.

Pre-IPO Prices Can Reflect Scarcity and Expectations

Unlisted shares of highly anticipated companies can command premiums because investors expect a future IPO or listing.

Scarcity can also influence pricing because there may be relatively few shares available for purchase.

This means the unlisted price may partly reflect expectations about future demand rather than a valuation established through a broad public market.

The NSE case illustrates this difference: strong investor interest in the company did not prevent the IPO price band from being set below some previous unlisted-market prices.

Liquidity Is a Major Risk

Liquidity is one of the biggest risks associated with unlisted shares.

A listed stock can generally be bought or sold through an exchange during market hours, subject to normal market conditions.

Unlisted shares do not offer the same straightforward exit mechanism. Investors may have to find another buyer, wait for an IPO or depend on another corporate transaction.

This can make it difficult to exit an investment at the desired price.

Valuation Risk Can Be Significant

Another major risk is valuation.

Investors purchasing unlisted shares may rely on expected IPO valuations, broker estimates or private-market transactions.

But the eventual IPO price is determined by the company's issue structure, investor demand, market conditions and valuation considerations.

The difference between the price paid privately and the IPO price can therefore result in losses even before the shares officially begin trading.

NSE Is Not the First Example

The gap between unlisted-market prices and IPO pricing has appeared in other cases as well.

The Economic Times report points to HDB Financial Services as an example. Its IPO price band of Rs 740 was significantly below the Rs 1,225 level at which the unlisted stock had traded shortly before the IPO. Investors who had bought around Rs 1,550 a year earlier faced an even larger potential erosion in value.

These examples show that an expected IPO does not automatically guarantee a premium for unlisted investors.

Buying at Rs 2,100 Could Mean a Much Bigger Gap

The risk becomes more apparent for investors who bought NSE shares at even higher unlisted prices.

According to Unlisted Assets co-founder Manish Khanna, an investor who purchased NSE shares at Rs 2,100 would be paying roughly an 18% premium over the IPO's upper price band of Rs 1,785.

However, the eventual outcome would depend on IPO allocation, the listing price and the company's long-term fair value rather than simply the difference between the two prices.

IPO Price Is Not the Final Investment Outcome

Investors should also avoid assuming that an IPO price automatically represents the final market value.

A stock can list above its IPO price, fall below it or trade around the issue price after listing.

Therefore, an investor who purchased shares in the unlisted market needs to consider three separate factors:

• The original unlisted purchase price

• The IPO issue price and allocation

• The eventual post-listing market price

The ultimate investment return depends on the price at which the investor can actually exit.

NSE IPO Could Still Attract Strong Demand

The lower IPO valuation does not necessarily mean that investors have lost confidence in NSE.

The exchange's strong market position, high trading volumes and importance to India's financial ecosystem could continue to attract substantial demand.

The IPO could therefore perform well even though its issue price is below some earlier unlisted-market expectations.

What Should Unlisted Investors Learn?

The NSE example offers several lessons for investors considering unlisted shares.

First, a popular company is not necessarily a guaranteed profitable investment.

Second, the unlisted price should not automatically be treated as a reliable indication of the future IPO valuation.

Third, investors need to account for liquidity risk and the possibility that they may not be able to exit when they want.

Finally, an anticipated IPO should be treated as a potential event rather than a guaranteed source of returns.

Unlisted Shares Need a Different Investment Approach

Unlisted investments can provide access to companies before they enter the public markets, but they also require investors to accept greater uncertainty.

Investors need to examine the company's fundamentals, valuation, financial performance, possible listing timeline and potential exit routes.

Buying solely because a company is expected to launch an IPO can be risky, particularly if the private-market valuation has already incorporated aggressive expectations.

What Does the NSE Case Tell Investors?

The NSE example shows that even a highly sought-after unlisted company can see its IPO valuation come in below private-market expectations.

For Mahesh Gupta, the difference between his purchase price of Rs 1,826.85 and the IPO's upper band of Rs 1,785 is relatively modest.

But the same pricing gap can become much more significant for investors who purchased NSE shares at substantially higher unlisted prices.

What Happens After the NSE IPO?

The NSE IPO is scheduled to open for subscription on September 17, 2026, with the issue price band set at Rs 1,700-1,785 per share.

The eventual listing price will provide a more meaningful test of whether the IPO valuation leaves sufficient upside for public-market investors.

For existing unlisted shareholders, the listing will also provide a clearer and more liquid market for NSE shares.

Bottom Line

The NSE IPO offers an important lesson for investors in unlisted shares: a high unlisted-market price does not guarantee a higher IPO valuation or a guaranteed profit.

Mahesh Gupta's purchase of 500 NSE shares at Rs 1,826.85 highlights the point. With the IPO's upper price band at Rs 1,785, his acquisition price is already above the public-issue valuation by Rs 41.85 per share.

NSE's strong market position and business fundamentals could still support investor demand. But the episode shows why unlisted investing carries valuation, liquidity and exit risks — and why investors should not treat pre-IPO opportunities as a one-way bet.