The shelving of listing plans by well-known startups such as wearables brand Boat, online pharmacy PharmEasy, online automobile marketplace Droom Technology, has taken the wind out of the sails from the market for dealing in unlisted shares, a report by Business Standard stated.
The volumes in the unlisted market have declined by 50-70 percent along with heavy correction in the prices compared to a year ago level, noted the report.
Prices in the unlisted market have taken a sharp beating with PharmEasy and Boat dropping their IPO plans, people dealing in the segment told BS. For others still in the pipeline like Ixigo and Oyo (Oravel Stays), the prices in the pre-IPO market have eroded over 50 percent, according to data shared by Unlisted Arena.
"A popular trade for savvy investors was to accumulate shares of IPO-bound companies. Until last year, listing valuations were far greater than the last fundraise for many startups. As a result, buying shares from the unlisted market and selling post-IPO was a profitable trade for many wealthy investors," the report explained.
Many high-net-worth investors (HNIs), who had purchased shares in pre-IPO expecting to sell them at higher prices after a six-month lock-in period, are eager to sell at losses, market players pointed out.
With withdrawals and delays coupled with selling pressure in the secondary market for recently listed technology shares have stifled the sentiments; the unlisted market has lost the excitement it witnessed a year back, noted the report.
Shares of the five marquee-listed startups—Zomato, Paytm, Nykaa, Policybazaar and Delhivery—have crashed more than 50 percent from their highs. The fall in share prices in the unlisted market too is reflective of this, added the market players.