Retail investors burn fingers as NSE unlisted shares slide from July peak
NSE’s unlisted shares have dropped by a fifth from July highs as uncertainty over weekly options' expiry and fading hopes of a near-term listing weigh on investor sentiment.
MUMBAI : Late entrants into NSE’s unlisted shares have been singed by a steep correction in its stock price over the past two weeks, compounding losses since July’s record highs. The fall has hurt retail shareholders the most, whose numbers quadrupled in the three months through June.
The selloff has been driven by two concerns: market regulator Sebi weighing the future of weekly index options contracts— Nifty and Sensex options— in light of the huge losses faced by individual investors, and diminished visibility on NSE's listing this fiscal year.
NSE’s share price has fallen 7.3% over the past two weeks to around ₹1,900–1,940 from ₹2,050 on 11 September, when Mint reported that Sebi could soon issue a consultation paper on extending the tenure of index options contracts from weekly to possibly fortnightly.
Sebi’s concern stems from its latest study showing that the average loss of 87 lakh individual traders rose to ₹1.1 lakh in FY25 from ₹86,728 each in FY24, largely due to weekly options trading.
IPO delay adds pressure
The recent slide follows a sharper 16% drop from record highs of ₹2,400–2,450 in July, after hopes dimmed for the country's largest stock exchange listing this year. Sebi has yet to issue a no-objection certificate (NoC) for the offering, as it continues to review legacy corporate governance issues tied to the bourse’s former management.
A listing is now seen as likely only in the next fiscal, provided the NoC comes through in the coming months, according to sources. The regulator is checking resolution of certain alleged corporate governance issues by the bourse's previous management.
“Profit booking has been driven by the expiry day issue and a listing only in FY27 from the current fiscal with Sebi yet to issue the NoC," said Narinder Wadhwa, MD, SKI Capital. “The current deals are reported being struck at around ₹1,900 from ₹2,000–2,050 fifteen days back."
Wadhwa expects the stock to hover between ₹1,800 and ₹1,900 until clarity emerges on both the expiry reforms and listing approval.
Another broking official whose firm deals in unlisted shares agreed on the premise of the correction.
"The two issues have driven long- term investors taking profits off the table as anyway one holding the shares is locked in for six months after the listing," he said. "With the listing delayed and looming expiry related issues, there is propensity for profit taking now."
Retail rush and retreat
NSE shares had earlier surged from about ₹1,550 in late March to ₹2,450 by July, after the exchange eased transfer rules for unlisted shares in line with Sebi norms for unlisted market infrastructure institutions, cutting transfer timelines from three months to a day. This stoked optimism about an imminent public listing.
The rally swelled NSE’s investor base nearly fourfold to 159,394 by June from 39,201 the previous quarter. Of these, small investors— those holding up to ₹2 lakh in equity capital— made up 92% (146,208). As of March 2025, NSE had 33,896 retail shareholders, implying an over fourfold jump in the small investor base on a quarter-on-quarter basis.
NSE’s defence
NSE isn’t alone in the downturn. BSE shares have slumped almost 30% from their June peak of ₹3,030 to ₹2,122 on Tuesday, while commodity derivatives bourse MCX has shed 12% from its July high to ₹8,039. BSE, like NSE, has been hit by speculation over Sebi curbs on weekly options in addition to broader market volatility following President Donald Trump’s punitive tariffs on India. MCX has been hit by market volatility.
As speculation rages on replacing weekly contracts with fortnightly or monthly tenures, NSE has countered with data showing that retail exposure may be overstated. According to the exchange, only 1.7%—about 20 lakh—of its 11.9 crore registered investors traded exclusively in equity derivatives over the past year through August.
As of 31 August, NSE commanded a 92.6% share of the equity cash market and 76.4% of equity options premium turnover, with BSE accounting for the balance.
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