The Surge in Unlisted Shares Demands Expert Stewardship

As unlisted investing gains traction, questions around transparency and pricing regularly surface. A stock spikes on hype, only to collapse. A few retail investors, lured by promises of “the next multibagger,” are left holding illiquid assets with no price discovery and no exit.

Unlisted markets carry real risks: limited disclosures, low liquidity, information asymmetry, and pricing driven more by momentum than fundamentals.

But that’s not the whole picture. For those who understand how to navigate this market and do it through structured and professional vehicles, unlisted shares can offer meaningful long-term returns. The issue isn’t with the asset class itself, but with the manner in which it is accessed.

Recently, the IPO of HDB Financial Services (HDB) brought renewed attention to the risks and dynamics of the unlisted market. In the weeks prior, unlisted shares reportedly traded as high as ₹1,225¹. The IPO was eventually priced at ₹740 and the share price closed at ₹840 on the listing day², offering decent listing gains.

But the sharp gap from pre-IPO levels still raises questions: how do such divergences emerge, and what do they reveal? Understanding the context behind unlisted pricing is critical. According to The Economic Times, employee shareholdings were frozen ahead of the IPO in the case of HDB, restricting supply and likely contributing to inflated pricing.

This raises a deeper question: are high unlisted prices a sign of strong fundamentals or just demand-supply dynamics? That distinction is rarely obvious. In markets with sparse data and limited disclosures, judgment, experience, and analytical discipline are essential. This is where professionals add real value.

Several early investors who entered HDB at much lower prices a few years ago continue to hold healthy gains, while late entrants faced losses despite a positive listing. The episode underscores how outcomes in unlisted investing hinge on entry price, timing, and liquidity visibility – all of which are difficult to judge without due diligence and valuation discipline.

These are the very areas where experienced fund managers and managed vehicles play a critical role, bringing the frameworks, networks, and judgment needed to navigate such opaque and fast-moving markets with conviction.

Why Unlisted Shares Require Professional Management

The private market is not designed for casual investors. There are no daily NAVs, no mutual fund-style protections, no circuit breakers. Prices can move on speculation or rumor, with no regulatory pause.

While we acknowledge the opacity, it is important to recognise that it exists for a reason. The private market gives businesses space to grow away from the pressures of quarterly scrutiny, allowing founders to focus on product, profitability, and market leadership.

But that same opacity, while intentional, introduces complexity, especially around access to information, pricing, and governance. These asymmetries aren’t flaws, but features of the private market which demand professional interpretation.

Because the unlisted universe is vast and opaque, professional judgment becomes essential. Unlike listed equities, disclosures are limited, reporting is unstandardised, and price discovery is patchy.

The unlisted space is characterized by information asymmetry. Access to audited financials, shareholder agreements, or promoter records is typically restricted to those with sector expertise and deep networks. Professionals with this infrastructure hence have a real edge.

More importantly, not every unlisted stock is worth owning. A clear investment thesis, strict selection criteria, and valuation discipline are what separate real investing from speculative punting.

Due diligence goes beyond the business story. It involves validating financial hygiene, verifying shareholder title, assessing legal and corporate structures, and understanding counterparty risk. This is serious capital and it demands serious scrutiny, something most retail investors lack access to.

And while retail interest often peaks near IPOs, momentum is not a strategy. Entry may be easy, but exit is not. This is where professionally managed vehicles play a critical role, offering better access and clearer exit routes: IPOs, strategic buybacks, or secondaries.

Some unlisted companies have created real value. But recognising them early requires more than brand familiarity. It takes analysis, access, and conviction, which is where professional judgment becomes indispensable.

Take ICICI Lombard, for example. Its unlisted shares were available for as low as ₹70 between 2013 and 2017³. It went public at ₹661⁴ in 2017. As of June 2025, it traded near ₹2,040⁵ – a 3.1x return since IPO. On the surface, that’s a compelling trajectory, but seeing it as an opportunity back then would have required access to clean financials, confidence in the IPO timeline, and a clear view of valuation integrity. These are hard to come by without professional backing.

Even in newer sectors, the story holds. In March 2020, a secondary transaction in Nazara Technologies reportedly happened at ₹810⁶, well below its IPO price of ₹1,101⁷. By June 2025, the stock was at ₹1,300⁸. Yet here too, discerning the investable story required more than brand familiarity. It called for conviction in the company’s monetization model and unit economics, confidence in its path to profitability, and a disciplined view on valuation. These are judgments grounded in deep diligence and sector insight – the kind of work experts are structured to do, and retail investors rarely have access to.

Then there’s NSE, still unlisted. Its share price rose 140% over four years, from ₹740 in 2021 to ₹1,775 by 2025⁹. That reflects strong fundamentals: margin stability, profit growth, and market leadership. But even here, success depended on governance evaluation, earnings visibility, and comfort with shareholder rights. This is the kind of analysis that professionals are appropriately equipped to undertake.

These examples don’t suggest that every unlisted company is a success story. They simply reinforce the point that in private markets, the opportunity is real. But uncovering it, pricing it right, and participating in it meaningfully is rarely possible without expert eyes.

Where Professionals Win: Diligence, Discipline, and Decisive Action

Not every unlisted share deserves a place in a serious portfolio. In fact, most do not. And that is where professional stewardship becomes essential. As India’s private markets mature, it’s increasingly clear: alpha is not just about the access, the fund manager behind the decisions makes a difference.

In private markets, value does not come from access alone, but from what you do with it. Professional fund managers apply rigorous selection, due diligence, and pricing discipline to the information they get access to, turning asymmetry into advantage.

While individual investors may be drawn to potential and promise, institutional managers follow the process. The best funds assess governance, pricing integrity, and risk-adjusted outcomes, turning ambiguity into conviction.

In public markets, you pay a premium for liquidity. In private markets, you earn it by partnering with those who do the hard work others cannot.

That’s how opacity becomes opportunity: through the right structure, insight, and discipline.

Unlisted investing is risky and that is exactly why it demands trusted, regulated, and experienced hands. When the right structures meet the right opportunities, private markets offer what public markets rarely do: the potential for true asymmetric returns.

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