When it comes to investment, people usually look at the stock market and public companies. Many retail investors need to be aware that many private limited companies are equally profitable and popular as publicly traded companies. These unlisted firms have decided not to launch their initial public offering (IPO); instead, they depend on private equity firms, angel investors, and venture capitalists. It means unlisted shares are not easily accessible to familiar retail investors.
Over the last few years, a significant increase in retail investors’ curiosity about where to buy unlisted shares. India has witnessed the growth of many unlisted companies doing great in valuation. The success story of emerging businesses holding outstanding valuations has grabbed the attention of many investors. Unlisted companies reveal the value of their stocks after launching their IPO and make it available for retail investors. But, many individuals wish to buy pre-IPO stocks to grow their money with minimal risk as unlisted shares offer multiple advantages to investors.
When investors choose to invest in unlisted shares, they diversify the risks associated with the investment. Another benefit of investing in unlisted shares is their undervalued rates because very few investors are likely to invest in pre-IPO stocks due to less liquidity. Additionally, when investors buy shares of an unlisted company there is a high probability that the company they have invested in will get listed on the stock exchange and raise its share price from the initial price.
Let’s make it more clear with the following examples.
ICICI Lombard General Insurance
ICICI Lombard General Insurance Company Limited is one of India’s leading general insurance companies dealing with general insurance products, insurance claim management, reinsurance, investment management, and much more. The pre-IPO (unlisted) share price of the company in 2009 was Rs.70 per equity share. The company got listed in the Bombay Stock Exchange Limited and National Stock Exchange of India Limited in 2017, and the listing price of its shares is Rs. 680 per equity share. That means the price has increased nine times in eight years.
Previously known as Biswanath Hosiery Mills, Lux Industries is an Indian underwear company headquartered in Kolkata. It is one of India’s oldest undergarments companies that offers various hosiery products for men, women, and kids. In 2014, Lux Industries’ unlisted share price was Rs. 75 per equity share. The company went public in 2015 with a listing price of Rs. 735 per equity share. That means the share price of Lux Industries has grown nine times within one year. As an investor, if you had invested Rs. 1000 in Lux Industries, the value of your investment would have been around 9000 rupees after one year.
Tamilnad Mercantile Bank Limited
Established in 1921, Tamilnad Mercantile Bank Limited is an Indian bank headquartered in Thoothukudi, Tamil Nadu. Initially, the bank was founded as Nadar Bank, but later in 1962, its name changed to Tamilnad Mercantile Bank Limited to broaden its reach beyond the Nadar community. It has 12 regional offices, and 509 branches across India. From 2010 to 2015, TMB was rated the fastest-growing private sector bank for five consecutive years. In 2010, TMB unlisted shares price was Rs. 40 per equity share, and when the company launched its IPO in 2022, the price of its listed share was Rs. 55o per equity share. It indicates that the investors who had invested in the company early have grown their money thirteen times.
The above-mentioned stories of ICICI Lombard, Lux Industries, and TMB show that early investment can grow money manifolds. If you have savings and patience, invest it into a promising company to reap substantial benefits. Today your investment in unlisted shares will grow many times once the company you picked gets listed and increases its share value.
Many unlisted companies have shown exponential growth over the years and are planning to launch their IPO soon. Investors can pick the unlisted company that has the potential to deliver high returns after detailed research and analysis of its financial statements, EBITDA report, EPS margin growth, and other aspects. For your convenience, we have listed a few rapidly growing unlisted companies you can consider.
B9 Beverages, formally Bira91, is an alcoholic beverage company in India. Bira91’s superb beer, robust draught network, and unique personality sparked a fever among urban millennials. Additionally, the total share capital of the firm is Rs. 428,750,432, and the paid-up capital is Rs. 414,996 864. Today, the company is ranked among the world’s top 25 craft beer brands by sales volume, and it is one of the fastest-growing brands in the world. In 2019, the price of Bira91 was Rs. 150 per equity share, and as of July 2022, Bira91’s unlisted share price was Rs. 750 per equity share. Within three years, the share price of B9 Beverages has grown four times.
Chennai Super Kings
Who doesn’t know the Chennai Super Kings in India? One of the most successful franchises in the world’s biggest cricket league. As a company, CSK has a total share capital of Rs. 31,316,000, while its paid-up capital is Rs. 30,815,308. Brand Finance Report reveals that the value of Chennai Super Kings is estimated at $65 million, which makes it one of the most valuable franchises in the IPL. Chennai Super King’s unlisted share price is Rs. 167 per equity share, while in 2019, CSK’s unlisted share price was Rs. 11 per equity share. Pre-IPO stocks of CSK have grown sixteen times in three years.
The above companies are just instances of unlisted companies’ exponential growth. The success of stocks doesn’t only imply profit to the company. In the true sense, stocks’ success is the success of the company’s stockholders. There are other unlisted companies like Razorpay Software Pvt. Ltd., PNB Finance and Industries Ltd., Honeywell Electrical Devices and Systems India Limited, Inox Leasing and Finance Limited, and Inox Leasing and Finance Limited, that have shown significant growth over the years and have potential to deliver good benefits to investors.
At Stockify, we have witnessed the successful journey of top-performing unlisted shares that climbed on the growth trajectory with the company’s performance and brought substantial returns to the investors. However, there is more to know about stock trading than just stock prices and market capitalisation. Therefore, it is recommended to start trading with expert guidance and learn how professionals approach the market indicators like EBITDA growth, profits, and liquidity. Connect with our team and let them simplify stock investments for you.