Several unlisted stocks traded offline through select brokers have surged between 15% and 27% in the past two months amid the positive outlook for the secondary market. Some gainers included Reliance Retail (up 22%) and Tata Technologies (27%). Foreign brokerage CLSA reported in March that it believed Reliance Retail had a good chance of an initial public offering within the next 12 months. Reliance Retail’s board has approved a proposal to reduce its share capital, RIL said on Friday. Reliance Retail said that shares held by shareholders other than promoters and holding companies would be cancelled and wiped out.

The market regulator recently approved the IPO of Tata Technologies, the Tata Group’s first public share offering in nearly two decades. Oravel Stays, which runs the hospitality tech company OYO, has risen 17% in the past two months. According to reports, in March this year, the company pre-submitted its offer documents to the market regulator and may launch the public offering around Diwali this year. Other gainers included Sterlite Power Transmission (19%), Hero Fincorp (16%), Ixigo (14.5%) and Studds Accessories (8%).

Several companies, including ideaForge Technology, Cyient DLM, Synoptics Technologies and Senco Gold, have entered the primary market in the past few weeks. Shares of leading drone maker ideaForge were listed on the BSE on Friday at Rs 1,305 per share, a premium of 94%.

Experts remind investors to pay attention to valuation when investing in non-listed companies.

The Nifty index rallied 10.5% in the April-June quarter, the fourth-best performing index after Brazil (+15.9%), Japan (14.2%) and Russia (14.1%). Nifty expects FY24/FY25 earnings per share (EPS) to be revised down by 1%/1.4%, while most emerging markets see more downward revisions of 4%-9%. India remains on track to post the highest two-year EPS growth rate among the world’s 19 largest equity markets. The Nifty’s performance boosted its 12-month forward price-to-earnings ratio to 18.6 times from 17.4 times at the start of the quarter, implying a 17.7% premium to the average. “The gap between India’s 10-year government bond yield and 12-month expected earnings yield has risen to 1.7 percentage points, still below the danger zone of 2.0 percentage points. In developed countries such as the US, France and the UK, stock valuations Valuation relative to debt is much higher,” a recent CLSA report said.