Buy or Sell Unlisted Shares

Unlisted shares are the types of shares, which are not directly available to trade in an open market such as in NSE or BSE. You can only trade these shares in over-the-counter trading platforms(OTC).

Pre-IPO Shares are private equity shares which are available in secondary sale. Therefore, It is not a direct Investment in the company. Pre-IPOs are often those companies which have filed the DRHP (Draft Red Herring Prospectus) Papers for IPO, or those companies which haven't been listed yet on the stock exchange. Technically, Unlisted & Pre-IPO Shares are the same.

There are various types of shares available in the market which are divided into different phases :

• Pre-IPO : When a company is newly formed & its shares are issued.
• Listed Shares : When a company is established enough to raise funds directly from the public via Initial Public Offering (IPO).
• Stopped Trading : when shares of any specific company becomes inactive due to lack of interest by the Investors.
• Delisted : When a company is undergoing constant heavy losses, It ends up delisting itself from the exchange to cut-off a heavy expense for listing fee.
• Liquidation : When a company becomes insolvent, It starts distributing its assets to claimants. It is basically the shutdown phase of a company.

Unlisted shares are the shares issued by a company before it signs the Initial Public Offering to get listed on the stock exchange of India. All private companies should comply with certain guidelines and eligibility requirements such as market capitalisation, company size, listing fee, etc. to get listed on the stock exchange. These companies, often in their growing stage, do not have the resources to fulfil the stock exchange requirements.

Since Private Equities are difficult to liquidate for an Investor, there are various challenges faced by an Investor like : Transparency, Trust, Authenticity, & Most common one is looking for a buyer. We provide an escrow facility working end-to-end safe & secure transactions between the buyer & the seller; ensuring the safety of your money & securities smoothly on a real time basis. We provide portfolio management of unlisted shares along with proper diversification in various companies/sectors.

The most major reason behind this is that there is a very heavy fee charged by SEBI every year for its listing. Number of top-branded companies find this as a lucrative Idea by raising funds without listing. Hence, It becomes fruitful for both, Investor (as an Early-stage/Angel Investor) & Fund-Raiser to participate in this way before the company plans to be publicly traded.

There are various reasons why you should invest in unlisted shares:

• Unlisted shares are complementary to listed shares and the risks involved in unlisted shares are dynamic. The chances of getting a similar or better profit are higher than that of listed companies.
• Unlisted shares offer a much higher return as the shares you bought during the pre-IPO stage at a certain amount has the potential to multiply when it signs the IPO.
• Unlisted shares are less stressful since the prices do not change daily. Due to the limited number of long-term investors, the market price doesn't change as frequently compared to the listed companies.

here is no particular way to value all unlisted shares. Some of the common methods by which unlisted stocks are valued are as follows:

• Book Value Method

Under this method, the company's tangible assets and liabilities are taken into account.

• Last Transaction Price Method

The last price at which the pre-IPO share was traded is taken into consideration.

• Price To Earning Ratio

Past earnings are taken into consideration to anticipate the future cash flow. Once that is predicted, you have to discount these future cash flows with a discount rate.

• Net Asset Value (NAV)

Net asset value is calculated based on the current price in the share market, whereas book value uses previous prices.

Unlisted shares, unlike listed shares, trade in the over-the-counter market. It is difficult to trade directly since there are not a lot of buyers and sellers. An intermediary can be helpful in this way.The risks involved in unlisted shares are dynamic in nature. It is advised to invest your money in various unlisted companies as it reduces the risk of incurring a loss.

For Example - If you have kept Rs.500 to invest in unlisted shares, it is advisable not to invest the whole amount in one company. It would be better if you divide the sum into let's say 5 companies.

• Company A - Rs100
• Company B - Rs100
• Company C - Rs100
• Company D - Rs100
• Company E - Rs100

After a while, 2 companies incur a loss while the others have 2 times the profit. Now though you incurred a loss of 200, you also received a total of 600 from other companies. Thus, diversification plays a major role in investing in unlisted stocks

Before 1994, the concept of transferring shares was done through physical form which has a major risk of being lost, stolen, or torn down. In 1994, the concept of dematerialisation of shares was introduced which brought an ease for the investors to be carefree from transferring shares without any drawbacks and hassle taking place.

A company can dematerialise its shares through any of the following two depositories - CDSL or NSDL. These are the only two depositories which facilitate the dematerialisation of the shares. In the Private Equity Market, these shares are transferable from one demat account to another demat account.

These shares are usually available with VC's, AIF's, Angel Investors, ESOPs, PE Funds,& etc; In hefty big ticket size worth crores. Which we provide & facilitate to the Investors at a small ticket size so that they don't end up missing the opportunity.

Yes, these shares are the best options to invest, as after listing in the open market you can expect huge returns from them.

You can only purchase these shares on over-the-counter trading platforms(OTC) such as Sharecart.com.

Since unlisted shares have a limited number of investors who aim to invest for the long term, you can expect good returns with peace of mind.

There are commonly three types of unlisted shares available in the market: Pre IPO Shares, ESOP Shares, and De-listed shares.