Zerodha's Nithin Kamath warns investors on risks of unlisted shares
What's the story
Zerodha's founder and CEO Nithin Kamath has raised concerns over the current state of India's unlisted shares market. He took to X (formerly Twitter) to share his observations about the "crazy" trends in this sector. Kamath said he has been hearing some "phenomenally stupid stories" from the unlisted market, stressing that it's a bit crazy what's happening out there.
Investment caution
Kamath warns against blind investment in 'pre-IPO' companies
Kamath also warned against the trend of blindly investing in so-called "pre-IPO" companies. He said many people are doing this with the hope of making bigger gains than during an actual IPO. However, this greed is making them ignore some hard realities about these investments. "These shares already come with 100-500% markups, ridiculous commissions, and terrible pricing," he wrote.
Market risks
Kamath highlights risk of lower IPO prices
The biggest risk, according to Kamath, is that the IPO may eventually come in at a much lower price than the rates prevalent in the unlisted market. He cited several examples from 2025 where IPOs were priced lower than their unlisted market counterparts. For instance, NSDL's IPO was priced at ₹800 per share, which was 22% lower than its then-unlisted market price of ₹1,025.
Market trends
Kamath expresses surprise at popularity of unlisted share space
Kamath also expressed his surprise at the growing popularity of the unlisted share space. Tata Capital, the largest IPO of the year, set its price at ₹326 per share, a 55% discount to the ₹735 unlisted market price. "All those 'gains' wiped out before you even start. I honestly didn't expect the unlisted share space to become this popular. Colleagues showed me a platform sending WhatsApp blasts pushing this stuff," Kamath said.
Twitter Post
Take a look at Kamath's post
Given how hot the IPO market is, I'm hearing some phenomenally stupid stories from the unlisted market. People are blindly punting on so-called "pre-IPO" companies hoping they'll make bigger gains than during the actual IPO.
— Nithin Kamath (@Nithin0dha) November 28, 2025
The greed is causing people to ignore some hard…