Trading volumes in unlisted shares plunge up to 70%

Mumbai: Investor appetite for unlisted shares is on the wane as falling prices, reflecting the wobbly secondary market, and a pause in fresh issuances have dried up activity in this unregulated space. Trading volumes are down 40-70% from the latter part of 2025, according to three brokers in the unlisted segment, with demand restricted to a popular few.

“This slowdown has been driven by a combination of factors, including a lack of quality companies, elevated valuations, and company-specific concerns,” said Hitesh Dharawat, founder of Dharawat Securities. “Additionally, the underperformance of recent IPO listings has made investors more cautious about entering at the pre-IPO stage.”

Trading volumes in the unlisted market, according to him, have declined by nearly 40% from the peak seen around September-October last year.

The shrinking demand has weighed on share prices too. Oravel Stays (Oyo), Hero FinCorp, Imagine Marketing (Boat), Nayara Energy and Zepto are down 13-28% so far in 2026, as per data from Wealth Wisdom India.

Shares of companies in high-growth sectors or those heading for an IPO remain popular. Metropolitan Stock Exchange of India, Chennai Super Kings, SBI Funds Management and Parag Parikh Financial Advisory Services are up 9-64% this year.

“Trading activity is now concentrated in a select set of stocks, with NSE accounting for nearly 60% of the remaining market size,” said Krishna Patwari, managing director and founder of Wealth Wisdom India. NSE shares had last traded at ₹2,010 as of Wednesday, and are up 3.6% this year.

According to him, trading volumes in the unlisted space are down by nearly 70% from the peak of the recent bull market in September 2024.Other than NSE, Patwari is seeing buying interest in CSK, Parag Parikh Financial Advisory Services, SBI Mutual Fund, IndusInd General Insurance and Nayara Energy.

“Compared to earlier trends, demand has softened in sectors such as defence, hospitality and NBFC names,” he said.

The frenzy in the unlisted shares during the bull market was driven by ample liquidity, strong risk appetite and a robust IPO pipeline, drawing investors to pre-IPO opportunities. Elevated valuations in listed peers and expectations of listing gains pushed prices higher, fuelling concerns of excesses in the space.

In recent months, fewer companies have been able to raise funds through private or pre-IPO placements, said Sandip Ginodia, Director at Altius Investech.

“Typically, capital unlocked after listings gets reinvested into new unlisted opportunities, creating a continuous flow,” he said. “A stronger secondary market would likely revive IPO activity and lead to more trading in the unlisted space.”