You often hear people talking about investing in stocks. But did you know that not all stocks trade on the stock exchange? Some companies choose to stay private or delay their IPOs. Some such companies actually do issue unlisted shares that are not available on NSE or BSE.
By making such investments you can receive huge financial rewards. These investments also come with some risks which we will break down for you in the article below.
What Exactly Are Unlisted Shares?
They are shares of companies that are not yet listed on any stock exchanges- BSE or NSE. This means you can’t buy or sell them on NSE or BSE. Instead, they are traded privately through brokers and platforms.
Companies issue unlisted shares to raise funds before going public. Some well-known brands, like OYO, Swiggy, and PharmEasy, were once unlisted companies. Investors who bought early saw huge gains when these companies went public.
Why Companies May Be “Unlisted”?
- Less Regulation
- Listed companies must follow strict SEBI regulations.
- Unlisted firms enjoy more flexibility in running their business.
- Long-Term Growth Strategy
- Some companies prefer to delay their IPO.
- This allows them to focus on business expansion without stock market pressure.
- Exclusive Investments
- Unlisted shares are not available to all investors.
- Only institutional investors and select individuals can buy them.
How You Can Buy Unlisted Shares
Since unlisted stocks don’t trade on exchanges, you need a trusted dealer or broker. Platforms like Bharat Unlisted help investors buy and sell these shares safely.
Here’s how the process works:
- Find a Reliable Broker
- Choose a platform that deals in verified unlisted shares.
- Avoid scams by checking broker credibility.
- Check Availability
- Unlisted shares have limited supply.
- Prices change based on demand and company performance.
- Complete Documentation
- KYC and agreement forms are required for legal transactions.
- Always ask for proper paperwork.
- Make the Payment and Get Shares
- Once the deal is final, you receive shares in your demat account.
What Are the Risks of Investing?
- Liquidity Issues
- Selling unlisted shares can take time.
- You must find a buyer through a broker.
- Price Fluctuations
- Unlike listed stocks, unlisted share prices are not regulated.
- Prices depend on demand and company performance.
- IPO Delays
- Some companies never go public.
- Without an IPO, exiting your investment can be tricky.
Should You Really Invest in Unlisted Shares?
Investing in unlisted shares can be rewarding. But it’s important to understand the risks before diving in. If you want early access to high-growth companies, this could be a good option.
Looking to invest? Bharat Unlisted connects investors with India’s best unlisted stocks. Start today with as little as INR 10,000!