Exhaustive Guide To Pick Unlisted Shares Like A Pro

Today, unlisted shares are gaining tremendous popularity due to the golden opportunity they provide to retail investors. In fact, the popularity of unlisted shares has also grown because of the competition between new-age companies that want to reach the requisite threshold for being listed on the stock market. However, most unlisted stocks are related to startups or small businesses, but these companies expand more quickly than well-established businesses. When it comes to investing in unlisted shares, you just need to pick the right pre-IPO company in India to get a high return on investment (ROI). If you want to invest in unlisted shares and don’t know the selection criteria, this write-up is definitely for you. 

Let’s start this comprehensive guide to picking unlisted shares like a pro. 

Why Should You Invest In Unlisted Shares In India?

There are a lot of investment opportunities around us, such as Gold, SIP, Equity, Listed Shares, etc., but unlisted shares are one such golden opportunity that helps you diversify your investment portfolio. Pre-IPO companies in India have the tendency to do significantly well in the stock market as they ensure high ROI for investors especially once they go public. Making an early investment in such companies will easily double and triple your money by the time they opt for IPOs. So, you can quickly expect to get a high ROI on your investment which is like icing on the cake. Let’s move a little further and discuss the tips for picking the best-unlisted shares in India. 

How To Select The BEST Unlisted Share To Invest In?

Here we’re going to highlight some of the crucial tips to select the best-unlisted shares to invest in. Read and follow the tips mentioned below. 

Always Seek Futuristic Companies 

One of the very first tips you should follow when selecting unlisted share companies in India is to look for futuristic companies. It simply means you need to look for companies of tomorrow to invest in. Such companies are in a nascent stage, are few in the market, and are not listed for sure. Some of the popular categories are Fintech, gaming, SaaS, eCommerce, etc. Therefore, you should always look for those companies that are currently doing well and have clear goals for the future. 

Companies On A Route To Ipo 

Yes, companies that are already on route to IPO can be advantageous for you in terms of their issue price. Further, such companies already have their DRHP (Draft Red Herring Prospectus) released, a document containing all the necessary information about the company you need to know. These documents are subsidiaries of companies already listed and professionally managed. DRHP is an excellent way to learn about any company before investing in its shares. 

Check Who Has Already Invested 

Another essential tip you need to follow is to check out who has already invested in the company you’re picking for unlisted shares. It means you can look at famous angel investors, tycoons/businessmen who have invested in them. The reason for checking for such investors is only because they have a knack for hunting out startups that will make it big tomorrow. Furthermore, they have a team of experts who do all the necessary research work to ensure their investment is in the right hands. So this way, you will have a better idea of whether to buy unlisted shares of any particular company or not. 

Keep An Eye On The Liquidity 

Next, you have to ensure the liquidity of a pre-IPO company you want to buy unlisted shares. You should know that liquidity plays a major role when looking for unlisted shares. Basically, the companies with high liquidity have a large number of investors interested and also have high trading volumes. So, look for such pre-IPO companies to gain a high return on investment. 

Risk Analysis 

Investors can research for risk assessment to pick the right unlisted shares. As the market is too volatile, it increases the risk higher than the listed market. However, with proper risk analysis, investors can diversify the majority of it from the portfolio. You can start with fundamental and technical analysis to evaluate the company and overall industry risk factors to predict any fall in prices. 

Frame the Investment Timeline

In the unlisted market, Although it is advisable to stay in the unlisted market for a longer time until the company files for an IPO to leverage the profit, you can still frame a timeline. If you follow a predictive analysis, it helps to assess any uncertain fluctuation in the market to sell out the shares. Otherwise, keep the investment for the IPO timeframe to increase your profit expectations. 

Research for Price History 

Another significant factor in picking the right unlisted shares is to research price history. It helps to assess the high drop in pricing and track what are the factors that influence it. So, investors can get an idea of the projected trends of share pricing to evaluate financial performance. 

Exit Opportunities 

One of the prominent reasons for investors to enter the pre-IPO market is to invest with the best exit strategy. So, you can research unlisted shares with high growth prospects to buy the pre-IPO allotment shares and get a higher return after its IPO oversubscription. 

How To Invest In Pre-Ipo Companies? 

Now that you have read all the necessary tips to pick the right and best-unlisted shares, it’s time to understand how to invest in pre-IPO companies. Though buying and selling unlisted shares is like a topsy-turvy task, taking help from unlisted share brokers from Stockify will make this process a lot easier. Once you have already selected a company to invest in, you can connect with us. We will guide you throughout the process and share every necessary information you need to know. We have more than 10 years of experience in this industry, are trusted by 1000+ clients, and have made 5000+ successful deals across the country. You can also count on our expertise to make investments in unlisted shares. You can also check out our list of pre-IPO companies from different industries, such as manufacturing, green energy, aviation, beverages, etc.

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Piyush Jhunjhunwala
Piyush Jhunjhunwala
CA, CPA, Ex. PepsiCo, Reckitt, Coty
CEO & Founder
Dubai, UAE.
Rahul Khatuwala
Rahul Khatuwala
Ex. Wipro & Finaco Founder
Co-Founder
Bangalore, India.