Sharescart Research Club logo ×
Screener Research Unlisted Startup Funding New IPO New
NRI's Investment Guide
  • NRI's and Unlisted Shares
  • Opportunities For NRIs
  • How Can NRI's invest
Unlisted Shares Banner

Find Investment Ideas

Name

Phone


An NRI’s Guide To Invest In Unlisted Shares In India

India continues to be a hotspot for profitable investment opportunities for NRIs as one of the economies with the fastest growth in the world. Over the years, regulations governing foreign and NRI investments have been loosened, permitting simpler capital inflow. As long as they follow the rules set forth by the Foreign Exchange Management Act (FEMA), NRIs are permitted to invest in listed shares on the stock market, ETFs, mutual funds, debentures, NCDs, and other securities. Can an NRI purchase Indian unlisted shares? Yes is the clear-cut response.

NRIs and Unlisted Shares

From the standpoint of the Indian Foreign Exchange Management Act 1999 Regulation, the investment made by an NRI is a "foreign investment." Similar to listed shares, unlisted shares in India have drawn many NRI investors as it provides investors with a strong return. Unlisted shares also carry lower risks because they are not governed by the Stock Exchange of India. Unlisted shares must first be understood in order for an NRI to comprehend investing in unlisted companies in India.

What are Unlisted Share?

Securities or financial instruments that are not listed on the stock market are known as unlisted shares. Unlisted shares are also referred to as OTC securities since they are traded on over-the-counter (OTC) markets. Smaller or newer companies typically decide against trading on any public stock exchanges because they don't match specific criteria like market size, listing fee, etc.

Attractive returns are one of the primary reasons investors purchase unlisted shares. To entice investors, companies offer these shares at a discount.

Investment Opportunities For NRIs in Unlisted Companies

If NRIs desire to invest in Indian unlisted companies, they can choose from a variety of investment alternatives, such as:

  1. Pre-IPO Investment

    Pre-IPO companies are businesses that are not listed on the stock exchange. You can invest in these pre-IPO businesses as an NRI without the assistance of exchange houses. You'll receive a deposit of the share into your NRI Demat Account. You can make investments in pre-IPO companies by getting in touch with an unlisted share broker.

  2. Investing In New Businesses

    In order to achieve exponential development and greater investment returns, NRIs might also invest in start-up businesses. Although investing in start-ups has a higher risk, the potential return on investment is very high.

  3. Directly Purchasing ESOPs from Employees

    ESOPs (Employee Stock Ownership Plans) are yet another excellent technique to buy unlisted shares in India. To connect with the employees of various companies who wish to sell their shares at a given price, NRIs might get in touch with unlisted share brokers in India.

Documentation Requirements

The KYC procedure has made investing in unlisted shares in India easier for NRIs. A PAN card, an NRI Demat account, and other important documents must be presented at the time of investment. 

There are two types of bank accounts for NRIs:

  • Non-Resident External (NRE) - A bank account opened in India in an NRI's name for his foreign earnings is known as an NRE. The NRE accounts are exempt from tax.
  • Non-Resident Ordinary (NRO) - A bank account opened in India in the name of an NRI to manage his money produced in India is known as an NRO account. The Income Tax Act of 1961 states that the interest received on an NRO account is subject to a 30% tax.

Tax Implications

The tax implications for NRIs are shown below based on long-term capital gains and short-term capital gains:

Short-Term and Long-Term Capital Gains

NRIs are permitted to make non-repatriation investments in unlisted shares in India. However, they can also purchase shares on a repatriation basis; however, they must notify the RBI of the transaction. Only if the unlisted shares are sold within two years will the gain on them be deemed short-term, and the income will be taxed at the marginal rate.

How Are NRIs Able To Invest In Unlisted Companies?

Non-resident Indians must abide by the rules of the Foreign Exchange Management Act (FEMA) in order to invest in Indian unlisted firms.

Pre-IPO companies are private businesses that are not currently listed but may do so in the future. Without the intervention of any exchange, you can invest in these pre-IPO companies. Even though the trade is off-the-record, the shares will still be deposited in your NRI Demat account. Investors and traders can purchase and sell shares of a company in pre-IPO marketplaces before the company is listed on stock exchanges.

Through middlemen like investment companies that enable the exchange of unlisted shares, you can purchase unlisted shares. These shares might be listed at any time, and you could sell them for a profit. You cannot, however, sell them before six months have passed since the date of listing.

Conclusion

Finding a reputable intermediary who concentrates solely on NRI investment in India and can assist you in successfully completing the transaction and lowering the risk of capital loss is essential because investing in unlisted shares has a number of dangers.

Shares that are not openly traded on the stock market are known as unlisted shares. Common stocks, corporate bonds, penny stocks, government securities, and derivative products are all examples of unlisted shares. In addition to other documentation, NRIs who want to invest in unlisted shares in India require a PAN card and an NRI Demat account.

Top Unlisted Companies & InstaBuy Companies

Sell or Purchase Share (Tentative Price)

Fundamental Analysis

Company Industry Stock P/E P/B Company rating MCAP (in Cr.) Current Price
Pharmeasy e-Commerce -1.7 1 6756 11
Reliance Retail Retailing 141.5 23 698659 1400
Orbis Financial Finance - Investment 64.1 13.7 3065 325

Top Recommendations

Hexaware Technologies

It is a leading global provider of BPO and IT services. Hexaware Technologies Limited provides IT consulting, software development, and business process services.

Unique Features

  • Delisted Company
  • Undervalued Stocks
  • Likely to Grow 2x

API Holdings

Incorporated in 2019, The company operates a consumer healthcare app called PharmEasy that enables the home delivery of pharmaceutical products.

Unique Features

  • Market Leader
  • Available now at 66% discount
  • QIB's invest at Rs.100 per share.

Sterlite Power

Sterlite Power began on 5th May 2015 and is headquartered in Delhi. It is a leading developer & solution provider in integrated power transmission.

Unique Features

  • Likely to grow in 4-5 years
  • Part of Vedanta Group
  • Decent Valuation

Signify Innovation

Incorporated in 2015. Signify is into the manufacturing of electric lights and light fixtures for consumers and professionals.

Unique Features

  • Lighting Industry
  • Part of Philips Group
  • Decent Valuation

Chennai Super Kings

CSK is a subsidiary brand of India Cements. This company is quite popular in India as it known for its cricket team.

Unique Features

  • Most loved IPL Team
  • LIC holds more than 6% Shares
  • One of the best businesses

Elcid Investment

Elcid Investments Limited was incorporated on 3 December 1981 in Mumbai. It is a Non-Banking Finance Company registered with the Reserve Bank of India.

Unique Features

  • NBFC
  • Listed Company
  • Book Value is Rs.6,16,440.

Studds Accessories

STUDDS is a leading manufacturer of motorcycle accessories and helmets. They become the largest helmet manufacturer (two-wheeler) in the world.

Unique Features

  • No.1 Brand of Helmets
  • Having business in 20+ countries
  • Trustworthy Management

Mohan Meakin

Mohan Meakin manufactures alcoholic beverages such as rum, whisky, beer, etc., and non-alcoholic beverages like apple juice, mineral water, etc.

Unique Features

  • Delisted Company
  • Decent Valuation
  • Popular alcoholic (Old Monk)

Orbis Financial

Orbis is recognized as a leading player in the Financial Services Industry, providing Securities Services since 2009 to FDI, Corporate, HNI's.

Unique Features

  • leading player
  • Decent Valuation
  • Excellent growth

Schneider Electric

Schneider Electric President Systems Limited is a designer, manufacturer and supplier of customized enclosure systems for over 30 years.

Unique Features

  • Delisted Company
  • Undervalued Stocks
  • In FY22, 45% growth in Sales

Check Health Insurance Premium

Check Health Insurance Premium

Success Stories

How Your Money Can Grow With Us

ICICI Prudential

Pre IPO Price:
130
IPO Price:
334
Listing Price:
310
Absoulte return 138%

1 Lac Invested in ICICI Prudential pre-ipo turned into 2.3 Lac after listing.

ICICI Lombard

Pre IPO Price:
400
IPO Price:
661
Listing Price:
680
Absoulte return 70%

1 Lac Invested in ICICI Lombard pre-ipo turned into 1.7 Lac after listing.

HDFC Life

Pre IPO Price:
210
IPO Price:
290
Listing Price:
344
Absoulte return 64%

1 Lac Invested in HDFC Life pre-ipo turned into 1.6 Lac after listing.

AU Small Finance Bank

Pre IPO Price:
175
IPO Price:
358
Listing Price:
597
Absoulte return 241%

1 Lac Invested in AU Small Finance Bank pre-ipo turned into 3.4 Lac after listing.

RBL Bank

Pre IPO Price:
60
IPO Price:
225
Listing Price:
301
Absoulte return 402%

1 Lac Invested in RBL Bank pre-ipo turned into 5 Lac after listing.

BSE

Pre IPO Price:
200
IPO Price:
806
Listing Price:
1069
Absoulte return 435%

1 Lac Invested in BSE pre-ipo turned into 5.3 Lac after listing.

CDSL

Pre IPO Price:
60
IPO Price:
150
Listing Price:
261
Absoulte return 335%

1 Lac Invested in CDSL pre-ipo turned into 4.3 Lac after listing.

Nazara Tech

Pre IPO Price:
545
IPO Price:
1101
Listing Price:
1990
Absoulte return 265%

1 Lac Invested in Nazara Tech pre-ipo turned into 3.6 Lac after listing.

Dmart Avenue

Pre IPO Price:
280
IPO Price:
300
Listing Price:
616
Absoulte return 120%

1 Lac Invested in Dmart Avenue pre-ipo turned into 2.2 Lac after listing.

Reliance Retail Ltd

Price in 2019:
450
Current Price:
3250
Absoulte return 622.22%

1 Lac Invested in Reliance Retail Ltd pre-ipo turned into 7.2 Lac.

Tata Technologies

Price in 2019:
1100
Current Price:
6350
Absoulte return 477.27%

1 Lac Invested in Tata Technologies pre-ipo turned into 5.7 Lac.

whatsapp