Investing in the stock market is often described as a delicate balancing act between risk and reward. It is like navigating a dynamic landscape, where opportunities for growth and profitability are abundant for those who are willing to explore beyond conventional options. While many investors focus on listed companies, investing in unlisted companies presents an exciting opportunity for real-time investors.
These unlisted companies, also known as pre-IPO stocks, offer a substantial potential for profitability. Let’s find out how.
In this article, we will delve into five immensely profitable ‘unlisted’ Indian companies that have attracted attention for their impressive performance and prospects in 2023.
1️⃣ National Stock Exchange (NSE)
When it comes to unlisted stocks in India, the National Stock Exchange (NSE) unlisted share stands out as one of the most valuable and promising options. As the largest stock exchange in the country, the NSE has experienced significant growth and profitability, making it an attractive investment opportunity for investors.
➡️ Financial Performance:
- The NSE has consistently delivered impressive financial results, reflecting its strong position in the Indian market.
- During the period between March 2020 and March 2021, the NSE witnessed a remarkable 60% increase in operating income, reaching Rs. 5,625 crores.
- Moreover, its net profit surged by an astounding 89% to Rs. 3,574 crores within the same timeframe.
➡️ Market Dominance:
- As the predominant stock exchange in India, the NSE holds a virtual monopoly on stock derivatives, which has contributed to its impressive financial performance.
- With an operating margin of nearly 80% EBITDA, the NSE boasts a strong market position and enjoys a favorable competitive advantage.
- It’s near-monopoly status and dominance in stock derivatives further strengthen its appeal as an investment option.
➡️ Strong Growth Potential:
- The NSE’s growth trajectory indicates significant potential for future expansion and profitability.
- Its revenue growth from FY19 to FY23 was 3.5 times higher than the global average, while profit growth reached an impressive 10.6 times.
- With substantial increases in Futures and Options volumes, the NSE is well-positioned for continued success.
➡️ Attractive Valuation:
- In the unlisted market, shares of the NSE are currently being quoted in the range of ₹3,175 to ₹3,300 apiece.
- These valuations are considered attractive, considering the NSE’s strong financial performance, market dominance, and growth potential.
- With its clean promoters and multiple revenue levers in place for future revenue accretion, the NSE shares possess the characteristics of a potential multi-bagger.
➡️ Increasing Demand:
- Since March 2023, the demand for NSE shares in the unlisted market has surged.
- The company’s announcement of a dividend of ₹80 and better-than-expected financial results have further fueled investor interest.
These robust facts and figures highlight the NSE’s ability to generate substantial returns for its stakeholders.
2️⃣ Reliance Retail:
Investing in Reliance Retail’s unlisted shares is a profitable opportunity, offering the potential for multifold returns. With a strong financial performance, plans for an IPO listing shortly, and continuous growth initiatives, Reliance Retail positions itself as a prominent player in the Indian retail market.
➡️ Financial Highlights:
- In the fourth quarter of FY23, Reliance Retail reported a 12.9% increase in net profit, amounting to 2,415 crore INR.
- The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 33.1% to reach 4,769 crores INR.
- Reliance Retail experienced a remarkable 21.1% growth in total revenue during the fourth quarter, reaching 61,559 crores INR.
➡️ Pre-IPO Potential:
- Reliance Retail, a subsidiary of Reliance Industries Limited, is speculated to go public within the next 2-3 years, along with its sister company Jio.
- Investing in Reliance Retail’s pre-IPO shares is seen as an opportunity to earn significant returns, given the company’s growth trajectory and potential market listing.
- The company’s dominant position in the Indian retail market and its continuous evolution and expansion strategies indicate a promising future.
➡️ Future Growth Prospects:
- Reliance Retail aims to capture market share by launching new brands such as the iconic beverage drink “Campa Cola” and a beauty platform called “Tira.”
- The company’s revenue is consistently surging and reaching new heights, indicating a favourable market environment.
- The organized retail segment in India is projected to grow at a CAGR of 15-18% until 2025, presenting a substantial growth opportunity for Reliance Retail.
By capitalizing on the company’s expansion strategies and the expected growth in the organized retail segment, investors can benefit from the high returns and low risk associated with Reliance Retail.
3️⃣ Tata Technologies
Tata Technologies Limited unlisted shares has become one of the most awaited events on Dalal Street. In the unlisted market, the company’s shares are currently trading around Rs 850 levels, attracting significant attention from investors.
➡️ Financial Performance:
- For the nine-month period ended December 2022, Tata Technologies recorded a 15% YoY growth in revenue at Rs 3,052 crore.
- The services segment contributed 88% of the total revenue.
- Net profit for the same period stood at Rs 407 crore.
➡️ Global Leadership in Engineering and Digital Services:
- Tata Technologies is a global leader in engineering and digital services.
- The company is headquartered in Singapore with regional offices in the US, India (Pune), and the UK.
- It serves clients in the automotive, aerospace, and industrial verticals across Europe, Asia Pacific, and North America.
- Tata Technologies has a workforce of over 8500 employees.
➡️ Impressive Financial Data:
- FY22 saw a YoY growth rate of 48.2% in net sales, amounting to Rs 3,529.6 crore.
- Net profit witnessed a significant increase of 82.7% to Rs 437 crore in the same period.
- The company’s EPS for FY22 stood at 10.45, representing a substantial growth of 82.7%.
With consistent revenue growth, strong net profit figures, and a diverse client base, Tata Technologies has positioned itself as an attractive investment opportunity.
4️⃣ Kannur International Airport Ltd (KIAL)
Kannur International Airport Ltd (KIAL) offers profit opportunities in various industries, including heavy industry, marine products, trade of fruits and other food items, and textile and handloom products. The airport’s strategic location and efficient operations make it an ideal hub for these industries, facilitating trade and business activities.
➡️ Focus on Tourism Industry:
- The Indian government and companies like OYO Hotels & Rooms have been actively empowering the hospitality and tourism industry.
- The budget for the financial year 2023-24 recognizes the importance of the tourism industry and prioritizes its growth and development.
- Experts predict a surge in international tourist visits to India in the coming years, as the industry recovers from the impact of the pandemic.
- Kannur International Airport is well-positioned to capitalize on this opportunity and contribute significantly to the growth of the tourism sector.
➡️ Financial Insights:
- The market capitalization of Kannur International Airport Limited is currently valued at 1351.5 Cr.
- The Price/Sales (P/S) ratio stands at 30.15, indicating the market’s perception of the company’s revenue generation capability.
- The industry PE ratio is 86.05, indicating the market’s optimism about the growth potential of the aviation sector.
The airport’s private-public partnership model, coupled with the local government’s involvement, has contributed to its accomplishments. With profit opportunities spanning various industries and a strategic focus on the tourism sector, KIAL is well-positioned to capitalize on the expected surge in international tourist visits to India.
PayMate is an innovative payment platform that combines payment processing and credit solutions. The company’s remarkable growth, profitability, and expanding customer base further demonstrate its success in the B2B payment industry and makes it an appealing unlisted stock to invest in 2023. More about PayMate unlisted shares.
➡️ Partnerships and Stakeholders:
- The company has established partnerships with trusted financial institutions and stakeholders, including VISA, which holds a 2.94% stake in PayMate India Ltd.
➡️ Growth and Profitability:
- PayMate has experienced rapid growth and is recognized as India’s fastest-growing B2B payment company.
- In 2021, PayMate expanded its customer base to 49,618 customers, which includes 391 new enterprises and 49,227 SMEs.
➡️ Financial Performance:
- Net sales for PayMate have shown significant growth over the years, reflecting the company’s increasing market presence and revenue generation.
- In March 2018, net sales amounted to 54.86 Cr., and by March 2022, it reached an impressive figure of 1,208.80 Cr.
Please note that the above data based on the latest information available, are only meant for educational purposes and in no way meant to be taken as recommendations. Please conduct due diligence before investing in any of the above stocks.
At Rurash Financials, we specialize in providing comprehensive services for investing in unlisted shares. Our expert team diligently researches and analyses potential companies, identifying unlisted stocks with exceptional growth potential.