Investing in pre-IPO stocks is an excellent opportunity for investors to make big profits. These are the stocks of companies that are not listed on the stock market. Gone are the days when trading unlisted shares in India was only available for individuals with high financial worth. Today, anyone can invest in the unlisted shares of companies from the comfort of home. You only need the account, and an online trading platform like Stockify. This article will explain how you can make your first investment in Pre-IPO stocks with Stockify.
What Does Pre-IPO Investing Mean?
Before we explain how to invest in Pre-IPO stocks, you need to know what exactly Pre-IPO investing means. If you have come across this term for the first time, here is a simple explanation. Pre-IPO investing means buying the shares of a company that is not listed in India's stock markets, like the Bombay Stock Exchange(BSE) and the National Stock Exchange(NSE).
Before listing on the stock market, companies sell their substantial number of shares privately through the Initial Public Offering, widely known as the IPO. In the past, only financial institutions, private equity firms, and venture capitalists could invest in the pre-IPO share before the company goes public. However, anyone can easily invest in unlisted shares, especially retail investors. A trading marketplace like Stockify provides the complete details of the market valuation, overall growth, and previous years' performance of the company. You can easily analyse and buy unlisted shares of the Pre-IPO company by using the DEMAT account.
Advantages of Investing In Pre-IPO
There are various advantages of investing in the pre-IPO stocks of the company. First of all, various companies provide their unlisted shares before going public at a lower price than the listed shares. The pre-IPO share is an excellent opportunity for retail investors to invest in some of the top-performing companies and earn a good dividend on it in the future. Here are the top advantages of investing in pre-IPO stocks:
Offers Better Value For Money
The pre-IPO stocks of the companies offer better value for money than the listed stocks. Investing in the company's unlisted shares allows you to acquire the stakes of the company at the best possible market value. However, you can only make a huge profit on pre-IPO stocks if you have held them when the stock market goes up and down. Stockify can help you diversify your portfolio by choosing the right Pre-IPO stocks like ELCI Investment Limited, OYO, Tata Technologies, etc.
Discounted Rate of Shares
One of the major benefits of buying pre-IPO shares is that you can get these shares at a significantly discounted rate. Once you buy the shares at a discounted rate, all you have to do is wait for the company to go public. This way, the shares will make you a good profit with less investment.
Diversification
Another benefit of buying pre-IPO unlisted shares is that it can help you diversify your portfolio, which can help you yield a good profit. There are many such shares available in the unlisted market that can give you the most ROI possible. A diversified portfolio makes sure that you have a chance of making a good ROI or lessening the loss as much as possible.
Early Investors Perks
Many companies offer perks to their early investors. These perks may include discounted prices, better access to future offerings and the opportunity to participate in shareholder events.
Low-Risk Investment
Investing in an unlisted company is considered a less risky investment as compared to a public company. It means you can earn a high Return On Investment(ROI) as these companies have yet to make a profit and make their correct valuation in public. Additionally, you will have access to these stocks when the company goes public.
Offers Detailed Business Plans
One of the major advantages of investing in the Pre-IPO of companies is that they offer detailed business plans. That means you have more information about the company, like the previous year's revenue, profit-after-tax ratio, and many more. Furthermore, these small companies or startups don't raise additional funds, so they provide detailed business plans to their investors.
Some Disadvantages Of Pre-IPO Shares
Along with many advantages, Unlisted shares also have a few disadvantages and that is what we will discuss in this section.
High Risk
Buying pre-IPO shares poses a high risk of losing your money. Not all IPOs are meant to be a good and profitable Portfolio. Some IPOs, when listed are not able to perform and hence result in decreasing prices which can make the company bankrupt.
Liquidity Concerns
Pre-IPO shares have liquidation problems, and sometimes you can only sell unlisted shares after them being listed on any trading platform.
How To Make A First Investment In Pre-IPO With Stockify?
Investment in the Pre-IPO stocks of unlisted companies starts with a good trading platform. Stockify is one of them that offers retail investors a simplified process of buying or selling unlisted shares of the companies. The process of making a first investment in Pre-IPO stocks involves these steps:
Choose A Company
The primary step of making a first investment in Pre-IPO stocks is choosing a company you want to buy the unlisted shares. For this, you must visit Stockify website and click the "Buy with us" section. After that, choose the "Unlisted shares (trending or others)" per your needs. Once you click on it, you will get the list of companies offering unlisted shares and their details.
KYC Verification & Payment
The next step is to complete the KYC verification, in which you must provide your bank account and DEMAT details. Once you complete the verification process, you will be asked to choose the payment method.
Transfer Of Shares
Once you have successfully completed the above step, the transfer process of shares is initiated. It may take some time, and you will get notified once the process transfer share is done.
Start Your Investment Journey With Stockify
Investing in Pre-IPO stocks is not easy when you don't have enough information about it. We at Stockify simplified it by providing a trading platform to retail investors. Our stocks experts make available the key metrics of unlisted shares and companies so that you can choose the right company. So what are you waiting for? Explore the different Pre-IPO and make your first investment with us.
