Business & Investment

Reliance on retail stocks: Higher stock valuations return D-Street veterans to unlisted markets

New Delhi: A pandemic hit on Daral Street has witnessed a sharp rebound in the last nine months, leading to historic Bull Run and creating a large number of outperformers across the market segment.

The· Gray market – Or an informal market for trade-in Unlisted stock – Duplicated similar performance during this period.

However, analysts say many investors have shifted from unlisted markets to listed markets later this year as better opportunities emerged in the latter. They said that as valuations became more expensive in the secondary market, many were beginning to return to the gray market.

During the year, some quality names from unlisted markets have properly rewarded investors who have maintained their patience in the face of strong panic.

Care Health Insurance, formerly known as Religare health, has become the leader in this performer pack. Unlisted stocks have turned into multi-baggers, soaring from 30-35 rupees to 125-130 rupees annually. Health insurance companies have seen a surge in volume during the health crisis.

The unlisted stock of the IPL franchise Chennai Super Kings (CSK) jumped three times a year from 25-30 rupees to 80-85 rupees as the 13th edition of the star-studded tournament was moved to the United Arab Emirates. I did. The company’s annual report shows that veteran investor Radakishan Damani is actively investing in equities.

Mobile gaming companies Nazara Technologies and Studds Accessories also doubled their share price during the year. Both were beneficiaries of the Covid blockade. Nazara Technologies and helmet maker Studds, backed by Rakesh Jhunjhunwala, are soon looking to an IPO.

Sandip Ginodia, CEO of Altius Investech, said during the blockade, many retail investors moved from unlisted to listed spaces due to the former limitation on the number of scrips and their availability.

“Spaces that aren’t on the list have their own barriers to entry and risks, but spaces on the list have been unmanageable. This space has more maturity, more capital, and greater risk appetite. , And works purely for fundamentals that require a long investment period, “he said.

Reliance Retail’s stake in Mukesh Ambani’s Reliance Industries retail division has nearly tripled annually to Rs 1,350-1,400. The entity was a hot topic as a small number of PE investors participated in the sale of shares. HDB Financial Services, NSE and Suryoday Small Finance Bank have also delivered spectacular returns to investors.

The unlisted market is unregulated, but fully legal. However, all transactions are in the cash segment. “There are no F & O segments or margin requirements in this market, which reduces fluctuations during difficult times,” said Dinesh Gupta, co-founder of Unlisted Zone.

Ginodia and Gupta said the unlisted market is at high risk due to the frequent mis-selling of large quantities of products. Still, off-market offers better value to investors with deep pockets.

Many analysts believe that unlisted spaces are likely to generate long-term wealth as they provide a better opportunity to choose value in the early stages of business. “This is why well-known investors are switching to this area,” he said.

Vivek Bajaj, co-founder of StockEdge, said the visibility of the market and the discovery of fair prices are very limited.

“As the valuation of listed spaces grows, the unlisted market will re-energize. The off-market may lead to the next wave of burlans as unlisted scrips fall below listed peers,” he said. It was.

Reliance on retail stocks: Higher stock valuations return D-Street veterans to unlisted markets Reliance on retail stocks: Higher stock valuations return D-Street veterans to unlisted markets

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