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Tata Capital 1075 (-1.8%)NSE India 6200 (0%)SBI Mutual Fund 2100 (0%)HDB Financial 1150 (2.2%)Essar Oil 600 (0%)Capgemini Technology 12000 (0%)Waaree Energies Ltd 2250 (0%)OYO 46 (-4.2%)Hero Fincorp 2050 (0%)Hexaware 745 (0%)AB Inbev Sabmiller 350 (0%)HDFC Securities 11800 (0%)Care Health Insurance 195 (-1.5%)BOAT 1395 (0%)CIAL 325 (6.6%)Electrosteel Steel Ltd 52 (0%)Sterlite Power 785 (8.3%)Signify Innovations 1650 (0%)Indian Potash 3300 (1.5%)Motilal Oswal 15 (0%)VIkram Solar Ltd 315 (6.8%)Shriram Life Insurance 400 (0%)Swiggy 390 (0%)Pharmeasy 11 (0%)Carrier Airconditioning 575 (0%)Fincare Small Finance Bank 260 (0%)Philips India 975 (0%)Polymatech Electronics Pvt Ltd 775 (0%)CSK 174 (0%)Kurlon Ltd 1300 (0%)Otis Elevator 3900 (0%)Philips Domestic Appliances 750 (0%)Elcid Investments 210000 (0%)Merino Industries 3600 (9.1%)Orbis Financial 375 (29.3%)Mobikwik 575 (0%)Bharat Bank 10650 (0%)Matrix Gas and Renewables 1050 (2.4%)Lava 52 (-5.5%)Indofil Industries 1015 (-3.3%)Kurlon Ent 600 (0%)ESDS Software 225 (0%)Studds 950 (-2.6%)GKN Driveline 1425 (0%)Kannur International Airport 132 (0%)Mohan Meakin 1995 (0%)Spray Engineering Devices 750 (0%)Fino Paytech Limited 155 (-3.1%)Lakeshore Hospital 135 (0%)Bira 585 (0%)Goodluck Defence 220 (4.8%)AV Thomas 22000 (0%)Greenzo Energy Pvt Ltd 725 (0%)MSEI 1.3 (0%)Ring Plus 650 (9.2%)Urban Tots 100 (0%)Martin and Harris Lab 1100 (0%)Schneider Electric 675 (0%)AVPL 80 (29%)NCL Buildtek 315 (0%)Maharashtra Knowledge Corporation MKCL 450 (0%)RRP S4E Innovation 425 (52.9%)India Carbon ltd 1250 (0%)ICEX 6 (0%)Empire Spices and Foods ltd 585 (0%)Resins and Plastic 550 (0%)PolicyX 50 (0%)Maxvalue Credits And Investments 6.5 (0%)Ramaraju Surgical Cotton 325 (0%)ICL Fincorp 26 (-3.7%)Quality Enviro 882 (0%)Assam Carbon Products 345 (6.2%)Bazar India 28 (0%)Madbow 50 (0%)ACS Technologies 48 (4.3%)Silverline Technologies Ltd 10 (-16.7%)Market Simplified 39 (0%)

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NRI\'s Investment Guide

Get Best Deals on Unlisted Shares

Find Investment Ideas


Get Best Deals on Unlisted Shares


Summary

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 73.9 15.9 3537 375

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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.

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