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Factors To Consider Before Buying Unlisted Shares Online

Nowadays more and more people are investing money in the stock market and many people are getting good returns from it. Most people do the research about a listed company and buy their stocks from online platforms, but there are a lot of  successful companies that are yet to be listed. These companies offer their unlisted shares or pre-IPO shares in grey markets. A company’s unlisted share price India depends on the performance of the company, if the company loses money, so do you.


So if you’re looking to invest in companies like boAt, Tata Technologies, OYO and LAVA, you have to buy these unlisted shares through the grey market. Don’t worry, this is not illegal, it’s totally legal and unlisted stocks are traded as per SEBI regulations. although there is a higher chance of loss in unlisted shares. On top of that, there are various factors that you have to consider before buying unlisted shares in India. In this article, we’ll tell you about unlisted shares and the things you should  keep in mind before buying  unlisted shares. 

What are Unlisted Shares?

As the name implies, unlisted shares are shares of the company that is not yet listed on the stock market. So, you cannot go directly to any stock broker app and buy these shares. Only specific firms and platforms deal with stocks of unlisted companies. The reason why these companies don’t list themselves on NSE or BSE is, because Companies have to submit their financial reports, profit loss history and other documents to SEBI, which approves the IPO of companies, and then they get listed and many companies don’t want to share their financial details to SEBI. 

Types Of Unlisted Shares in India

There are many types of unlisted shares, The major types of unlisted shares in India are as follows:

1. Pre-IPO Companies

You can invest in companies that are planning on offering their IPO Soon. These companies usually have a good growth potential. All you have to do is to create  a Demat account and initiate the transaction and your shares will be credited to your Demat account. However, you have to select the intermediary wisely as it  can make a big difference. 

2. Startups

The Indian Startups are on the rise and every year many promising startups are born. You can invest in these startups and expect a big return. Most startups keep a cap of ₹50000 for minimum investment in their startup. If you invest in these startups,there is a chance that the startup will grow and may become a multimillion dollar company someday which means that your investment is worth a lot more. 

3. Buying ESOPs From Employees

ESOPs are company shares that are offered to the employees by the company at a special price and there are many brokers who will connect you with employees who want to sell their ESOPs. 

4. Buying Through Promoter

Another way of buying unlisted shares is to buy it directly from the promoter. If you’re looking to buy a significant amount of unlisted shares then you’re better off to buy it straight from a promoter. Any investment bank or trusted broker will help you make contact with the promoter and then you can know the unlisted share price India and buy it directly. 

Factors To Consider Before Buying Unlisted Shares

There are many factors to consider if you want to make a profit from your unlisted share investments. 

1. Broker or intermediary 

While investing in unlisted shares, you have to make sure that you’re not giving away your money. Many apps that deal in listed companies don’t deal in unlisted companies; this leaves the door open for frauds, who will offer a pre-IPO share or startup share in more than the actual amount. So, you need to choose your intermediary very carefully. However, there are many trustworthy platforms on the internet like Stockify, which offers unlisted shares safely and easily. 

2. Company risk

Most of the companies that are offering their unlisted shares do not disclose their financial reports or other reports publicly. Therefore, if you’re looking to buy unlisted shares then it is necessary to get expert assistance  and do your own thorough research as well. 

3. Previous Performance

When buying unlisted stocks, the financial performance of a company in the last few years is really important as the price of unlisted shares directly depends on the performance of the company. 

4. Valuation

You should also do a thorough research on the valuation of the company. The information is not present in a public forum as the company is not yet listed. So If you evaluate a company more than it’s really worth then your unlisted share will lose money instead of gaining it. 

We hope that the information given above can be of use to you.  Unlisted shares are a good investment option if you are doing proper investigation and research about the company. Also, you have to make sure that you don’t trade through an untrustworthy platform. Nowadays there are a lot of trusted trading platforms like Stockify that allow you to evaluate a company and buy pre-IPO shares easily and safely.