NSE To Cut Share Transfer Lag, Considers Bonus Issue

NSE is an unlisted company. Despite that, it has seen a lot of positive momentum in the unlisted shares market, given which, NSE is trying to cut down the lag time involved in the share transfer in this market.

1. Current problems with share transfer of unlisted shares

Unlisted markets are one of the most under-rated market segments in the investment sector. Yet, few of the biggest companies are traded here, NSE being one of them.

While trading in the listed market guarantees a transfer of shares in T+2 days, the unlisted market is not so smooth. They often get caught up in a bureaucratic process, resulting in long delays.

Unlisted companies like NSE have to always check every potential shareholder application and see if they fit their profile or not. This manual verification takes up a lot of time. Sometimes this along with documentation can take up to 4 to 5 months. This really affects their business.

To make things smoother, they are trying to automate the process in a way that this process can be completed in around 10 days.

1. How the bonus issue help in this case

With this in mind, they are also leading a bonus issue. This bonus issue will be a 1:10 issue, which will increase the number of equity shares of NSE by 10 times and make it 495 million.

How will this help NSE’s cause?

• Firstly, this is a very opportunistic move where NSE is trying to automatically capitalize the automated system that they are trying to build for the unlisted shares transfer.

• Then, by simultaneously preparing for the reduced time, and working on reducing it, it will definitely increase its liquidity in the unlisted markets.

• The bonus issue will act as a confidence booster for the investors of the company.

• The increased liquidity, coupled with a show of confidence, may attract more investors to participate in the unlisted markets facilitated by the NSE.

NSE’s strategy seems great, and it will definitely attract a lot of investors as it is already seen as a very reliable stock.

NSE’s investor data

NSE's investor data paints an interesting picture as of December 31, 2023. Approximately 8,700 individual investors together hold just over 12 percent of the stock exchange. After the bonus issue, this ownership should translate to around 65 million shares.

If we dive into the recent trading activity, these shares were valued between Rs 2,850 to Rs 3,600 in January, according to the information available on the NSE website.

This diversity in ownership and the range of share prices reflect the overall strength of the NSE share price.

The report also showed that there is an involvement of individual investors from different financial backgrounds. This means that people really trust NSE, and that’s why people with lower backgrounds, for whom their savings matter a lot, are also investing in NSE.

It also indicates a certain level of liquidity, as these shares are actively changing hands at varying prices. That means that the stock has high momentum.

How to invest in NSE

If you also want to capitalize on this momentum of NSE stock price then you can contact any unlisted market intermediaries and invest through them.

Normally, to invest in any unlisted shares you can contact any of the following avenues:

• Intermediaries like Stockify: They give you a listed stock market-like experience for unlisted shares.
• ESOPs: You can directly purchase the ESOPs from the employees themselves
• Investment Banks: Many investment banks help you find a deal or help you purchase a part of an unlisted company.
• Portfolio Managers: Many venture capitalists and startup portfolio managers have a huge lot of unlisted companies. They have private funds for these. You can pool in some money and enjoy the benefits of a mutual fund-like asset.
• Private Deal: Lastly, you can directly contact the company and try to crack a deal.

But it's always more convenient to contact intermediaries. Stockify because they are also known as India’s best market for unlisted shares.