Investor confidence in India’s unlisted securities market has taken a hit after HDB Financial Services’ Initial Public Offering was priced significantly below grey market expectations. The impact has rippled across high-profile pre-IPO stocks like NSE, NSDL and Tata Capital, whose unlisted values have dropped between 5% and 18% in recent weeks, according to an ET report.The Rs 12,500-crore HDB IPO was priced at Rs 740 per share, sharply lower than the Rs 1,225 quoted in the unofficial market on June 18, resulting in steep losses of nearly 40% for investors who bought at peak levels. The stock debuted at Rs 835 and closed at Rs 838 on Wednesday.“Post the HDB IPO, we’ve observed a shift in investor sentiment, from being brand-conscious to becoming more valuation-sensitive, especially as HDB was priced significantly lower than its unlisted market value,” said Hitesh Dharawat of Dharawat Securities, an online marketplace for unlisted shares, according to the financial daily.In the aftermath, unlisted prices of other marquee names have dropped sharply. NSDL has declined from Rs 1,250 to Rs 1,025 amid fears its upcoming IPO—expected by the end of July—may also be priced below prevailing secondary market valuations. NSE shares have fallen nearly 6% over the past month as high-net-worth individuals and institutional investors began trimming their positions.“Retail investors are continuing to buy into these names, fuelled by FOMO and expectations of strong listings, despite elevated valuations,” Dharawat added.Sandip Ginodia, director at Altius Investech, said investors are now more valuation-aware and comparing unlisted prices with listed peers. NSDL is currently valued at a price-to-earnings (P/E) ratio of 59.8 times, compared with listed rival CDSL’s 70 times.Tata Capital is trading at a price-to-book (P/B) ratio of 10.5 times, significantly higher than India’s largest NBFC, Bajaj Finance, which trades at 7.4 times.“Tata Capital is yet to see a large amount of selling, but we anticipate the prices coming down further as the issue nears listing, due to its lofty valuations,” Ginodia told ET. He advised investors to remain cautious in the unlisted market, warning that inflated expectations could lead to sharp downside if IPO pricing does not match.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)