Unlisted Share

Overview

Unlisted Shares Plan

Importance

Advantages

Investment

How to Apply

Unlisted Share

Overview

Unlisted Shares Plan

Importance

Advantages

Investment

How to Apply

Unlisted Share

Overview

Unlisted Shares Plan

Importance

Advantages

Investment

How to Apply

Unlisted Share

Overview

Unlisted Shares Plan

Importance

Advantages

Investment

How to Apply

Unlisted share FAQs

Unlisted shares are the shares of a company not listed on any recognized stock exchange. This class of shares gets traded in private or through over-the-counter markets. They are given out to companies that are yet to go into the public.

These unlisted shares can be bought through private deals, brokers who specialize in the sale and purchase of unlisted securities, or directly from the company that issues such shares. Investors may also form part of pre-IPO placements, whereby companies issue shares before listing in the stock market.

Investment in unlisted shares is a riskier investment because of the low level of liquidity, lesser regulation, and limited information with regard to the company's financial performance. These shares are also highly volatile and not easy to sell when compared to listed shares.

Unlisted shares can yield a good amount of return, especially if the company grows big and decides to go public. However, the returns are not certain, and generally speaking, such investments are highly speculative.

The valuation of unlisted shares is not that straightforward and, in most cases, involves methods such as discounted cash flow analysis, comparable company analysis, and market-based approaches, among others. It also usually gets done by financial analysts or through private negotiations.

While the unlisted shares do not get traded on the stock exchange, all other regulations by the Securities and Exchange Board of India and other concerned authorities would still be applicable to them. Companies that issue unlisted shares would have to follow all the requirements concerning disclosure and reporting.

Yes, unlisted shares can be converted to listed during an Initial Public Offer in case a company decides to get itself listed. The same can, therefore, be beneficial for the shareholder because of the increase in liquidity and better valuation that might be accorded to such shares upon listing.

Unlisted shares can be traded through private transactions, brokers, and some specific platforms that arrange trade in unlisted securities. Note that the process of selling unlisted shares is usually tougher, as there may be a lower demand for them and/or lack of access to broader markets.

This is the investment in unlisted shares, suitable for experienced investors only, with a high-risk tolerance and a long investment horizon. It might also be interesting to such investors who would like to invest in innovative startups or companies before their IPO.

Unlisted shares offer an additional dimension of diversification to your portfolio by providing exposure to those companies which are not available on public markets. This may, in turn, reduce the overall portfolio risk and provide access to selected unique growth opportunities.

Yes, unlisted shares can be used to create wealth in the long run, especially if the company grows and then lists. But investors must be prepared for the high risks and consequent possible illiquidity of their investments.

Moreover, most of the startup investors in its early stages hold unlisted shares; one of the important exit strategies could involve their sale when the company gets acquired or is about to go public and make a huge profit from that sale.

In rare circumstances, unlisted shares can be accepted as security where a lender accepts them and feels the share value is good enough to secure lending. Because of the nature of unlisted shares being illiquid, they are not as welcome in comparison with listed ones as collateral.

Unlisted shares often form the principal of private equity investment, whereby the investors advance finance to private firms against the equity ownership thereof. These investments are usually made with expectations of high returns on investment, when the company goes public or gets acquired later on.

Some unlisted shares come with a lock-in period, wherein the investor is not allowed to liquidate their securities. The duration varies from company to company based upon the policy of the companies and the share purchase agreement conditions.

Unlisted Share

Unlisted Share

Unlisted Share

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Diversification:

Higher Return Potential:

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High Growth Potential:

Access to Exclusive Investment Opportunities:

Diversification:

Higher Return Potential:

Early Investment Opportunities:

Reduced Market Volatility:

Eligibility Criteria:

Required Documents:

Fill the form

Answer your phone

Get a Life Insurance from best lender

High Growth Potential:

Access to Exclusive Investment Opportunities:

Diversification:

Higher Return Potential:

Early Investment Opportunities:

Reduced Market Volatility:

Eligibility Criteria:

Required Documents:

Fill the form

Answer your phone

Get a Life Insurance from best lender

Unlisted share FAQs