The market of the unlisted shares in India continues to rise and provides an opportunity to buy or sell shares conveniently. In India where the majority of people have limited knowledge of the stock market, investing in a stock of any company brings financial security to their life. However, only few people know the process of buying and selling unlisted shares in India. As per the Economic Times Report, there are over 10 lakhs of unlisted companies whose shares are available for buying in stock market. Whether its a sports franchise Chennai Super Kings, OYO or Tata Technologies, their unlisted shares are available for investors. So, if you don't know how to buy or sell the unlisted share, this post will share the complete process.
What Does Unlisted Shares Mean?
In simple words, the unlisted shares are the equities or financial securities of the companies. These can be startups or businesses that are not listed in the stock market. It is also known as the pre-IPO equity that is available for the trading and investors can easily buy or sell them. When the company is not listed in stock market, it is not bound to rules and regulations of Stock Exchange Bonds of India (SEBI). In this scenario, there is a higher risk for the investors as the entry and exit from the market is not smooth. However, all the companies that offer unlisted shares to the investors are registered with the Ministry of Corporate Affairs that makes them follow the national stock trading policy.
The Process Of Buying And Selling Unlisted Shares In India?
When it comes to the stock market, people still have some sort of insecurity about the future returns. The risk of losing money increases when the company is unlisted. So, it is beneficial to buy unlisted shares. One of the biggest advantages of investing in unlisted shares is that it allows investors to buy stakes in startups and companies.
Process Of Buying Unlisted Shares
The process of buying unlisted shares is pretty straight-forward. Investors can buy the share directly from the pre-IPO listed marketplace. It is the place where the employers and private brokers make their stake available at the better price. However, to buy the unlisted shares you also need a trusted broker who has a good track record. Remember, you should have your DEMAT trading account ready with sufficient balance. The whole process of buying unlisted shares is the multi-step process are follows the pattern as follows:
First of all, you need a reliable platform like Stockify to begin with research of the various unlisted shares. The best unlisted shares to invest also needs the assistance of a broker that shares the market performance of the particular share for the past few months to years.
Now, you shortlist the unlisted share based on its past performance and risk assessment . Here you will need specific knowledge of the industry of which you want to buy the stock. Based on this data, you have to negotiate valuation of the share.
After that the term sheet is signed and the process of due diligence will be performed. In this stage, you can take the help of a dealer who will make you aware of the terms and conditions. When you are done with it, the process of due diligence starts. Apart from this, you can also buy unlisted shares of the companies during its pre-IPO stage. Most companies issue unlisted shares before bringing the Initial Public Offering(IPO).
Process of Selling Unlisted Shares
The process of selling the unlisted shares is quite simple when you have an experienced broker. There are various online platforms that provide the marketplace of buying and selling unlisted shares. Here, there are two scenarios: First you have the shares of IPO bound companies and second you have shares of non-IPO bound companies. In simple words, you can easily sell the shares of IPO bound companies as compared to the other one. Here is the process of selling unlisted shares in India:
First of all, you have to get in touch with the entity holder or spokesperson to share the concern. Your dealer or broker can complete this process. All you have to share is your DEMAT account details and Client Master Report(CMR).
After that, transfer the unlisted shares you want to sell to the broker’s DEMAT account along with its details. Here your CMR comes into play that contains the approved document along with shared details at the time when you buy it. You can email it along with account details and ID proof.
Once the dealer receives the unlisted share, he/she can find the best buyer and sell the shares. The advantage of having a broker is that it can negotiate the unlisted share price and get you an excellent deal.
It is the whole process of buying and selling unlisted shares in India. You might find it difficult when you do it on your own. There are various things you need to keep in mind like performance of the company, liquidy, and present market condition. You also have an option to buy directly from stock promoters, employers, and portfolio management systems. However, it will become cumbersome for you. Count on Stockify for unlisted share trading to make the process easier for you.
Choose Stockify For Buying & Selling Unlisted Shares
Choosing and investing in the right share can be overwhelming. The process of selling and buying unlisted shares involves market research, analysing company performance, and negotiating the best value before buying it. During the process, it is vital for you to have a broker who will do this process for you. Stockify provides various unlisted shares of various companies. We provide the access of shares to retail investors with low barrier entry. Here, we analyse the risk and bring you the best deal ever possible.
Possible Opportunities In Unlisted Shares
Unlisted shares are not available for trading on any stock exchange, so new investors are often not much aware about these offerings. Here are the possible ways for investors looking forward to buy or sell unlisted shares:
Pre IPO Companies
In India, numerous pre-IPO companies offer shares in unlisted markets to attract funds from investors. We provide access to the pre-IPO companies to explore and make your investments. If you analyse financial and growth prospects, it offers a great advantage for an investor to increase their profitability.
Early Stage Startups
The accelerated growth of startups in India creates a great demand for investments. You can contact startup owners to acquire these unlisted shares; otherwise, you can invest in a startup like Swiggy through the convenient platform Stockify.
Employee stock options (ESOPs)
Under the ESOP scheme, companies offer shares at discounted prices to employees so that when they sell after the lock-in period, it will provide a high profit. So, these unlisted shares can be obtained through contacting employees and negotiating the offer to buy the stocks or shares.
Private Placements
In unlisted companies, promoters, top investors, wealth managers, and investment banks offer unlisted shares through private placement. However, they impose a compulsion to buy a minimum amount of shares at a price set after negotiation. So, you can contact these stakeholders to buy unlisted shares of pre IPO companies.
Our process is straight-forward and doesn’t include the high fee during the transaction. At our website you will get access to blue-chip stocks before their listing in National Stock Exchange(NSE) or Bombay Stock Exchange(BSE). Buy or sell unlisted shares without any worry.
