The bullish trend in the stock market has extended to unlisted shares, with several companies like Indian Potash, Waaree Energy, and Tata Capital seeing over 100% gains in the past six months. The Primex 40 index, tracking top unlisted companies, delivered a 49% return, outperforming the Nifty 500 Multicap 50:25:25’s 20% gain.
Investors buy unlisted shares in anticipation of upcoming IPOs, though share prices can drop if IPOs are delayed, as seen with Oravel Stays. Financial strength and corporate actions, such as NSE’s bonus shares and dividends, also boost prices.
However, the unlisted market carries risks, including potential fraud and wide bid-ask spreads. Experts advise caution and ensuring transactions are made through authorized brokers. Regulatory hurdles can delay share transfers, requiring due diligence from investors.
Over the past four years, household savings in India have significantly shifted towards equity investments, largely influenced by the Covid-19 lockdowns. Equity now dominates mutual fund assets, with its share rising from 39.2% in December 2020 to 60% in April 2024, as per Franklin Templeton data.
The total assets under management (AUM) for mutual funds surged from ₹31.02 lakh crore to ₹57.26 lakh crore during this period. This shift is driven by a strong market rally, with major indices like Nifty 50, Nifty Midcap 150, and Nifty Smallcap 250 seeing substantial gains.
The rise of systematic investment plans (SIPs), increased individual investor participation, and the disposal of physical assets in favor of equity mutual funds have further fueled this trend. Additionally, the removal of indexation benefits from debt mutual funds has redirected some investments towards deposits and non-convertible debentures (NCDs).
India’s benchmark indices reached new highs on Monday but retreated due to pre-election jitters. The Sensex briefly crossed 76,000 and the Nifty 23,100, but closed at 75,390.5 and 22,932.4, respectively. The Volatility Index (VIX) rose 6.8% to its highest in two years, reflecting market nervousness ahead of the June 4 election results.
