New Delhi: A quiet storm is building in the unlisted equity markets, and it has the fingerprints of greed, miscalculation—and a long-awaited initial public offering (IPO).
With a cryptic nudge from the newly appointed SEBI chairman about a potential go-ahead for the NSE IPO, the subterranean market for unlisted shares has gone into a frenzy. For months, brokers in Mumbai and Delhi had played the twin-bet game—going long on the second stock exchange while simultaneously shorting India’s largest bourse, whose shares were trading in the grey market.
The gamble worked—until it didn’t. NSE’s unlisted shares, once languishing around ₹1,500, have spiked to over ₹2,050 in just two trading sessions (Thursday and Friday), pushing its informal market cap beyond ₹5 lakh crore. And now, brokers who promised clients delivery of NSE shares are scrambling.
Clients, spooked by the sudden rally and the IPO news, are demanding actual delivery into their demat accounts. But the shares aren’t there. Most brokers never owned them—only the promise of future purchase at lower prices.
“This is a classic short squeeze,” said a Mumbai-based market veteran. “Brokers were confident they could always buy back NSE shares cheap. That confidence has blown up.”
The squeeze is exposing the opaque underbelly of the grey market. With over ₹4,000-₹5,000 crore worth of unlisted NSE shares traded each quarter, this isn’t some fringe back alley—it’s one of the busiest equity corridors in the country.
But the current crunch may lead to delivery defaults exceeding ₹5,000 crore, insiders say. “No one will talk openly,” said a Delhi broker. “Media, brokers, even some institutions are deep into this game. Everyone had a stake in pushing up prices of one exchange and suppressing the other.”
This isn’t the first time this has happened. A few years ago, a global financial giant rumoured plan to dump $1 billion worth of NSE shares triggered a mini panic among short sellers.
That sale never materialised, forcing a desperate scramble to cover. That was a warning shot. This is the full-scale war.
Brokers across Delhi, Mumbai, Bengaluru, Ahmedabad and Surat are now huddled in damage-control mode, hosting emergency weekend meetings with clients. With settlement pressures mounting and tempers running high, the unlisted NSE trade—once seen as a lucrative arbitrage play—is now a minefield.
The IPO may be coming. But for some, the reckoning has already arrived.