Did you know you can buy shares of a company before it goes public? This is exactly what Pre-IPO investment will allow you to do. You will have the chance to buy shares before they hit public stock markets like NSE and BSE. What this usually means is higher growth potential and lower valuations when compared to post-IPO prices.
Zomato, Nykaa and Paytm were once Pre-IPO stocks. The very early investors made huge gains when these companies were listed. SO how can you invest in Pre-IPO shares? Read the blog below to know more!
What is the Pre-IPO Investment Process Like?
Pre-IPO investment means buying shares before a company launches its IPO. These shares belong to employees, early investors, or private equity firms looking to sell before the company lists.
Since they are not traded on NSE or BSE, you can only buy them through unlisted share brokers or platforms like Bharat Unlisted.
Why Should You Invest in Pre-IPO Shares?
- Early Access to High-Growth Companies
- Pre-IPO shares allow you to invest before prices rise on listing day.
- Companies like OYO, Swiggy, and Razorpay have been popular Pre-IPO investments.
- Lower Valuations
- IPO prices are often higher than Pre-IPO rates.
- Investing early gives you a better entry point.
- Better Returns Over Time
- If the company performs well post-IPO, your investment can multiply.
- Investors in Nykaa’s Pre-IPO round made huge profits.
- Institutional Investors Buy Early
- Big investors like mutual funds and private equity firms invest before IPOs.
- Pre-IPO investing lets you follow smart money moves.
How You Can Buy Pre-IPO Shares
Since these shares don’t trade on exchanges, you need a trusted broker. Here’s how the process works:
- Find a Reliable Dealer
- Platforms like Bharat Unlisted connect buyers with verified sellers.
- Avoid scams by choosing reputed brokers.
- Check Company Performance
- Look at the company’s financials, revenue growth, and future potential.
- Understand why they are raising funds before the IPO.
- Understand Pricing
- Pre-IPO prices depend on market demand and company valuation.
- Compare prices across dealers to get the best deal.
- Complete KYC and Buy Shares
- Provide KYC documents and make the payment.
- Shares will be transferred to your demat account.
The Few Risks to Consider
- Liquidity Issues
- Pre-IPO shares can’t be sold until the company lists or finds a buyer.
- IPO Delays or Cancellations
- Some companies postpone or cancel IPOs, delaying investor exits.
- Pricing Volatility
- Not all IPOs succeed. Some list at a discount instead of a premium.
Pre-IPO investmenting offers exclusive access to high-potential companies. But it comes with risks. Research well and invest through trusted platforms like Bharat Unlisted.
Want to start investing in Pre-IPO shares? Join Bharat Unlisted today and explore India’s top private market opportunities!