Confused About Investing In Unlisted Shares?

The unlisted shares market in India has reached the point where every other investor is shifting its focus to buy unlisted shares in India. The stock market, which was earlier ruled by listed companies, shares a big part with unlisted shares today. Amidst all the hype about unlisted shares in India, it can get intimidating and confusing to buy unlisted share/pre-IPO stocks. This write-up is to clear your doubts about investing in pre-IPO stocks in India. We will cover some factors to be taken into account before entering the investing market and then the benefits of buying unlisted shares in India.

Let’s go!

Short Glimpse Into Unlisted Shares

The companies that have not yet gone public and whose shares are not traded in the stock market are called unlisted companies. These are majorly start-ups and small-scale businesses, and the trading of their shares is done on the OTC (over-the-counter) market. When it comes to unlisted shares, investing early is most beneficial for investors to make huge profits. 

Is It Safe To Buy Unlisted Shares In India?

As the pre-IPO stocks in India are exchanged over the counter, it can lead to investment risks and rewards depending on whether the investor has taken the time to look into the company’s revenue growth. Like listed shares investing, trading in unlisted shares in India involves similar risks. To buy unlisted shares in India, you must be careful; you can also take the help of trusted professionals for such queries and avoid maximum risks. 

Factors To Consider When You Buy Unlisted Shares In India

There are several factors to consider when you buy pre-IPO stocks in India; the below-mentioned pointers will help.

Analyse The Company’s Business

It’s indispensable to analyse the company’s status when you buy unlisted shares in India. Find out what the management has in mind for the company’s future goals and check out the company’s mix and risk-to-business cash flows. Determining the company’s revenue sources will help you buy unlisted shares better decisions.

Determine The Company’s Value Proposition

To determine the company’s value proposition, you will need to assess the competitive edge of the company in the industry peers and find out the USP (Unique Selling Proposition/Point) of the company’s services and products to buy the pre-IPO stocks in India.

Check Out The Company’s Valuation

One of the best ways to gauge a company’s status is to compare whether its relative valuation price is lower or higher than its peers. When you are willing to buy unlisted shares in India, check out the trading price of the unlisted share price of the company in the grey market and then take a step ahead.

Figure Out The Future Potential Of The Company

Investment means capital growth, and to make sure of it, figuring out the company’s future potential is essential. Look into the company’s plans to expand and fund its expansion. Analyse the future prospects, growth plans and execution strategy of the company. 

Perks Of Buy Unlisted Shares In India

When you consider these factors while investing in pre-IPO stocks in India, the chances of earning huge rewards multiply. Here are a few benefits to consider when you buy unlisted shares in India:

High Return Potential Investments

The unlisted shares have very low liquidity and frequently get overpriced or underpriced for an extended period based on the company’s recent happenings. Henceforth, the investors can make a sizable return if they buy pre-IPO stocks in India when they are cheap.

Risk/ Portfolio Diversification

Unlisted shares come with an excellent benefit which is risk/portfolio diversification. Investing in unlisted shares in India is a great way to establish yourself in the stock market but keep the risk of loss to a minimum. Moreover, unlisted shares offer stability and have similar or better return potentials to that of listed shares.

Less Volatile Price Range

Listed shares are all about changes in the company, which give them their volatile nature. Unlisted shares, however, are safer because they generally have low volatility, and you do not have to worry about regularly unlisted shares’ price changes. You can check out the unlisted shares’ price daily updates based on market fluctuations on Stockify, evaluate the company’s performance and make an informed investment decision.

High Growth Potentials

Lastly, unlisted shares in India are the quickest way to make huge profits. The companies trading their pre-IPO shares are majorly smaller in size and still need to be on a scale to trade their shares publicly. This gives birth to the small base effect: invest in the company in its growing period and generate hefty returns when the company gets listed and enters the stock exchange market.

Unlisted shares come with their own portion of perks and pitfalls, similar to the pros and cons of trading in the listed shares, so healthy and mindful investing is crucial. If you are willing to enter the unlisted shares market of India, Stockify is a renowned platform to buy and sell unlisted shares which provides access to retail investors at lower entry barriers. Our aim is to provide our clients with all blue chip stocks before their listing is done in the public market. To ease out all the queries, our experts will guide you into taking your investing step ahead by ensuring you get regular updates. So wait no more and buy unlisted shares in India now!

Table of Contents

Investing in unlisted shares can earn you huge profits and returns if you know how to determine the right company, analyse the company’s valuation proposition and figure out its future potential.

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Piyush Jhunjhunwala
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Rahul Khatuwala
Ex. Wipro & Finaco Founder
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Bangalore, India.