Nithin Kamath, founder and CEO of online trading platform Zerodha, has expressed concerns over the growing craze for unlisted shares in India. Speaking on social media platform X on Friday, Kamath described the market as “phenomenally crazy” and warned investors against blind speculation.

Kamath highlighted the risks of pre-IPO investing, where investors hope to make gains even higher than the returns from the eventual IPO. According to him, this “greed” often leads people to ignore fundamental risks.

“These shares already come with 100–500% markups, ridiculous commissions, and terrible pricing,” Kamath wrote. He emphasized that the biggest danger is when the IPO is priced significantly lower than unlisted market rates, wiping out the apparent gains before investors even officially participate.

Examples from 2025

Several IPOs this year illustrate Kamath’s warning:

• NSDL: Its IPO was priced at ₹800 per share, 22% below the unlisted market price of ₹1,025, and even further below the June peak of ₹1,275.
• Tata Capital: The largest IPO of the year, priced at ₹326 per share, represented a 55% markdown from its unlisted market price of ₹735.

While NSDL’s shares have recovered to trade above their pre-IPO unlisted price, they remain below their June 2025 highs. Tata Capital shares, meanwhile, continue to hover near their IPO levels, far below the previous unlisted market prices.

Kamath also noted the rise of platforms aggressively promoting unlisted shares, with WhatsApp blasts pushing retail investors into the market. He admitted he did not expect the unlisted share space to gain such popularity so quickly.

The Zerodha CEO’s cautionary message underscores a growing gap between hype and fundamentals in India’s pre-IPO investment space, reminding investors to carefully assess valuations before committing funds.