Dezerv<\/a>. The shares I bought belong to a company called boAt.<\/p><\/blockquote>\n 2. Through Employees<\/span><\/h3>\n Most private companies offer their workers stock ownership plans (ESOPs) to retain them and give them a sense of ownership. So, these unlisted shares are also available to the employees.\u00a0<\/span><\/p>\n
This means that you can simply ask your friends or relatives to get you the shares of such companies..<\/span><\/p>\n
3. Through Financial Institutions<\/span><\/h3>\n As unlisted shares are inexpensive, financial institutions invest a lot of money in them. An investor with significant capital and a high-risk tolerance thus typically invests in unlisted shares through a financial institution.<\/span><\/p>\n
4. Platforms For Crowdfunding<\/span><\/h3>\n This is a common practice in startups since it enables a sizable group of investors to pool their resources and finance startups in exchange for a percentage of their unlisted shares. These investors later fund these companies in exchange for the equity.<\/span><\/p>\n
How To Choose Unlisted Companies<\/span><\/h2>\n Different ways exist to select the most ideal way to invest in unlisted companies. Check them out below.<\/span><\/p>\n
1. Investigate Futuristic Industries<\/span><\/h3>\n This still stands as the primary motivation for investing. Find tomorrow’s industries to invest in. Typically, there aren’t many companies in the market, and they’re still in their infancy.\u00a0<\/span><\/p>\n
Gaming, SaaS, Fintech, e-commerce, and other well-known industries have been included in the trending list of investments throughout the years.<\/span><\/p>\n
2. Find Out Who Has Already Invested<\/span><\/h3>\n You can locate businesses where some well-known founders of successful startups are re-entering markets they support. If you like, you can also check out which prominent business tycoons have invested in them.<\/span><\/p>\n
The majority of the time, these angel investors have a knack for finding firms that will become hugely successful in the future. In addition, they have an entire team of investors that conduct all the necessary due diligence to guarantee that their investments are in good hands.<\/span><\/p>\n
3. Companies On Their Way To Going Public<\/span><\/h3>\n Companies close to going public may still have a competitive advantage over their issue price. However, this is merely one of many benefits. Most of these businesses have previously published their DRHP.<\/span><\/p>\n
These records, often known as holy grails, contain all the pertinent information regarding the company. Additionally, they are handled professionally and are subsidiaries of previously listed businesses.<\/span><\/p>\n
4. Liquidity<\/span><\/h3>\n Liquidity is a crucial factor while searching for unlisted companies. Liquid companies typically have a large number of interested investors and significant trading volumes.<\/span><\/p>\n
5. Pre IPO Investment<\/span><\/h3>\n Purchasing or selling company shares before the company’s initial public offering (IPO) occurs in the pre-IPO market. There is no stock exchange where you can buy these shares because they are not traded in the open market.<\/span><\/p>\n
Unlisted shares can be purchased through intermediaries and platforms that specialize in locating and putting unlisted shares on the market. In addition to buying shares from existing and eager new investors, intermediaries and platforms also offer employee stock option Plans (ESOP).<\/span><\/p>\n
The pre-IPO market has opened up recently and is now accessible to the general public. There are online marketplaces where investors can purchase unlisted shares from companies, including Analah Capital, TradeUnlisted, and Unlistedkart. Shares of these unlisted businesses are kept in a Demat account.<\/span><\/p>\n
The minimum amount of this investment might range between Rs.25,000 and Rs.50,000, according to Unlistedkart, depending on the unlisted share. Other investment platforms haven’t referred to a minimum investment requirement.\u00a0<\/span><\/p>\n
All pre-IPO shares are restricted for six months following the date of listing, and following the regulations of India’s market regulator. It indicates that you cannot sell equities before six months have passed after the listing date.<\/span><\/p>\n
Short-term securities are unlisted securities that are sold in less than 24 months. The gains are taxed at a tax slab rate that applies to you and to the person’s income. After indexation, the tax rate on long-term capital gains, if sold after 24 months, is 20 percent.<\/span><\/p>\n
It’s essential to remember that unlisted shares are unstable and illiquid, so you might not be able to sell them quickly. Since institutional players predominate the pre-IPO market and their transactions tend to be slower, selling shares and obtaining cash at any hour of the day is challenging.<\/span><\/p>\n
The Drawbacks of Buying Shares of Unlisted Companies<\/span><\/h2>\n Purchasing unlisted shares is not a surefire road to success. Every currently unlisted company does not necessarily need to be a wealth producer.\u00a0<\/span><\/p>\n
As there is little information available, determining the fair value of shares of unlisted companies is also quite tricky. Also, purchasing shares in an unlisted company also carries some inherent risks.<\/span><\/p>\n
Even when you go on to sell the shares of such corporations, it may prove difficult if an unlisted company does not become listed shortly. In other words, there can be liquidity issues.\u00a0<\/span><\/p>\n
Shares of businesses that do not trade on reputable stock exchanges are taxed at a higher rate, reducing your profit margins. Furthermore, keeping these shares in a Demat account also carries a good enough cost.\u00a0<\/span><\/p>\n
Conclusion<\/span><\/h2>\n If you have been in the stock markets for some time, you must be aware of the risk potential in such assets. Although the stock markets are safe and do not include scammers, it has its own regulatory body, SEBI.<\/span><\/p>\n
Buying unlisted shares might pose a risk to retail investors and traders, as they face many scams.\u00a0 This is because these shares are not regulated by SEBI.<\/span><\/p>\n
So, you can think of this in two ways: You are in love with this unlisted company and know all the fundamentals, or you can choose to invest only that much which you can afford to lose. Hope now you know the A to Z of investing the shares of unlisted companies in India.<\/span><\/p>\n ","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"excerpt":{"rendered":"
Unlisted shares are simply those shares that are not listed on any of the capital markets. These assets are, however, available on alternate platforms. This article will tell you everything about these unlisted companies and how you can easily invest in them. So, without delaying anymore, let’s get straight to it. What Are Unlisted Shares? …<\/p>\n ","protected":false,"gt_translate_keys":[{"key":"rendered","format":"html"}]},"author":12,"featured_media":8698,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[276,232,277],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/aayushbhaskar.com\/wp-content\/uploads\/2022\/07\/How-To-Buy-Shares-Of-Unlisted-Companies-In-India.png","acf":[],"yoast_head":"\n
How To Buy Shares Of Unlisted Companies\u00a0In India - Aayush Bhaskar<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n \n \n \n \n\t \n","gt_translate_keys":[{"key":"link","format":"url"}],"_links":{"self":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/8688"}],"collection":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/comments?post=8688"}],"version-history":[{"count":0,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/posts\/8688\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media\/8698"}],"wp:attachment":[{"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/media?parent=8688"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/categories?post=8688"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aayushbhaskar.com\/wp-json\/wp\/v2\/tags?post=8688"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}