1.02 Currently, an unlisted public company (UPC) being a public company whose shares are not listed and is not seeking for its shares to be listed on the stock market of the stock exchange, is not required to obtain SC’s prior authorisation under section 212 of the CMSA for the offering of its shares.
The Securities Exchange Board of India prescribes a six-month lock-in period for non-promoter investors from the date of IPO allotment, if they are pre-IPO investors. If you buy and sell in the unlisted stage after holding for more than two years, then the gains are taxed at 20 percent after indexation.
Since shares of unlisted companies are not freely traded on stock exchanges, there is no fair or exact market price. … There is no formal market for unlisted equities. Unlisted shares enter trading is usually done when there is diluted equity for sale by existing shareholders, promoters or employees of the company.
Definition Of Unlisted Shares
An unlisted share is any security or financial instrument that’s available for trade on over-the-counter markets and is also known as over-the-counter (OTC) securities. Typically, unlisted companies do not trade on any formal stock exchange.
How do I invest in a company that is not listed?
How can you Invest in Private/ Unlisted companies?
- Intermediaries and start-ups – …
- Buy from existing employees with ESOPs. …
- Buy from Promoters Directly. …
- Buy PMS or AIFs which pick up unlisted shares. …
- Equity crowd funding platforms, Angel Funds.
Buyers place the order to buy IPO shares at a certain premium by contacting the grey market dealers. Next, the dealer contacts the sellers who applied in the IPO and ask them if they are willing to sell their IPO shares at a certain premium at this time.
As it’s over the counter market, there are no official people or business you can approach for IPO Grey Market trading. If you are interested in buying or selling IPO stocks in Grey Market, you have to find a local dealer who can find buyers or sellers for you.
Unlisted share investment is a high-risk investment and hence has the potential to deliver significantly higher returns as early investors benefit the most before the company gets listed on stock exchange.
Also, holding these shares in a Demat account has its own cost. We can conclude that it is completely safe to buy unlisted shares if the investor has gone through the required process of unlisted shares that require a process of due diligence.
How do I buy and sell unlisted stocks?
Step by step process to sell unlisted /Pre IPO shares is as under:
- Step 1: A deal is proposed between unlisteddeal and seller either on WhatsApp or over email.
- Step 2: Seller provides their client master copy, PAN card copy, Aadhar card copy, delivery instruction slip (DIS) copy and cancelled cheque copy.