Unlisted shares of Reliance Retail rises by 40% by turning premium.

Featuring Blog by: Livemint

Shares of unlisted Reliance Retail Ltd are changing hands at a more than 40% premium to prices prevailing just a month back, fuelled by euphoric bets that the Mukesh Ambani-led company will be listed soon, analysts tracking the stock said.

“The company’s shares are currently changing hands at ₹2,030 apiece against ₹1,450 in April, assigning a value that is more than two-thirds of its parent Reliance Industries Ltd. The share price surged over 2.13 times since December 2019, when it changed hands at ₹950 apiece," said Aditya Kondwar, chief operating officer, JST Investments.

Unlike the trading of listed companies that happens on stock exchanges, trading in unlisted shares is an over-the-counter transaction. It is a person-to-person deal and is carried out by brokers. The supply of these shares comes from company employees, who have received ESOPs and may be looking for liquidity before a share buyback or listing of the company, as well as early investors, usually individuals, of the company seeking an exit. On the other hand, buyers of such shares are looking to get an early entry into a company that may be planning to go public, hoping to make a good return when the company hits the public market at a higher valuation.