Investing in unlisted shares provides the opportunity for potentially higher returns, less market volatility, greater control and influence over company decisions, and the chance to diversify a portfolio with early-stage companies, although it comes with the challenge of limited liquidity and the need for thorough due diligence. When a company gets unlisted, it has to provide the opportunity to its shareholders to sell unlisted shares at a given price and a time frame for doing so.
Prerequisite required to Sell Unlisted Shares
- DIS slip /Login credentials for CDSL
An authorization from the seller is crucial for the transfer of shares. The DIS document has various elements such as Client ID, Client Name, Date of submission, ISIN number, Security name, Quantity, Consideration amount, Reason for transfer and Date of execution. To know more about DIS slip, click https://altiusinvestech.com/blog/dis-slip-a-simple-guide/.
- Bank Details
You may need to provide details of your bank account, including the account number and the bank’s name and branch, where the sale proceeds will be credited.
A counterpartyis the other party involved in a transaction. It can be the buyer or seller of unlisted shares, and due diligence is important to ensure the legitimacy of the trade. Counterparties in unlisted share transactions may include other investors, private equity firms, or entities specializing in buying and selling unlisted securities.
Where to sell Unlisted shares ?
Selling unlisted shares can be done through various channels. Here are some common options:
- Private Transactions: You can sell unlisted shares through private transactions, negotiating directly with potential buyers. This might involve existing shareholders, acquaintances, or individuals interested in investing.
- Brokers and Financial Advisors: Engaging a broker or financial advisor experienced in dealing with unlisted securities can help connect you with potential buyers. They can also assist in the negotiation process and ensure legal compliance.
- Online Platforms: Some online platforms specialize in facilitating the buying and selling of unlisted shares. These platforms create a marketplace where sellers and buyers can connect, making the process more accessible.
- Network and Relationships: Leverage your personal and professional network to identify potential buyers. Networking within your industry or business community can sometimes lead to interested parties.
When selling unlisted shares, it is crucial to comply with legal and regulatory requirements and to engage in thorough communication with potential buyers to ensure a smooth transaction process.
Process of Selling Unlisted Shares
Offline Procedure– With respect to shares held with NSDL or CDSL depositories, the offline procedure for transfer of shares through off-market transfer is possible. One needs to fill out a DIS (Delivery Instruction Slip).
ISIN number of the shares to be transferred, name of the company (security), Demat account, and DP ID of the account to which the shares are being transferred must be filled up in the form. The form needs to be submitted to the old broker’s office for further processing.
Online Procedure– If shares are held with CDSL, there is an online facility for the transfer of shares. One can only transfers shares from CDSL Easiest to trust demat account. So, before initiating the share transfer from CDSL easiest, please add the trusted demat account.
How to add trusted demat account?
1. Login on the CDSL account (https://www.cdslindia.com/Investors/open-demat.html)
2. Go to “Miscellaneous” and under that, click” Edit Trusted Account“.
3. Enter the Demat ID of 16 numbers to whom you want to transfer shares.
4. An OTP will come on your mobile number to verify it.
5. The account will be approved by broker within 24 hrs and then you can transfer shares.
How to transfer shares via CDSL Easiest?
1. Login on the CDSL account (https://www.cdslindia.com/Investors/open-demat.html )
2. Go to “Transaction Tab” and click “Setup“.
3. Click “Bulk Setup” after that.
4. Select ‘Transaction‘and enter the execution date and enter the Beneficiary owner ID (BOID), you need to transfer the shares to. In that page select ISIN. When you click on Account ISINs, you will see a list of all the ISINs in your holdings. Select the ISIN and enter the quantity and select the reason for trade from a list given.
5. Once you complete the above process, a verification will come. Verify it. Once you do that, a page will open, in that you fill the Exchange ID, Counter Party Exchange ID, Market Type, Counter Party Market Type, Settlement ID and Counter Settlement ID for off-market transactions.
6. Finally click on “Commit” and type the 8 digit CDSL PIN which you have received on your email id when you have registered for CDSL Easiest.
7. The request will go the broker and he will verify it and transfer will be done.
How to transfer shares via Angel Broking Online Facility?
1. Login to https://trade.angelbroking.com/
2. Go to “More” and Select” Online-DIS”.
3. Select “Off-Market” and select whether you want to transfer in NSDL account or CDSL Account.
4. Enter target DP ID, Client ID, Reason of transfer, and select the scrip you want to transfer along with quantity.
5. After that you will be taken to CDSL website to enter TPIN (alternate to POA). If you don’t have TPIN you can generate from the following link.
6. Enter TPIN and the request will go to broker for transferring of shares.
Charges for transferring shares via CDSL Easiest:
1. Rs.25 or 0.03% whichever is higher is the DP charges.
2. If the reason of transferring of shares is not gift or self-transfer, then stamp duty of Rs.15 on 1 lac value transaction need to pay to CDSL.
Buying and selling of unlisted shares is not that difficult when you know the mechanism behind it.
With Altius Investech, you do not need to worry about anything.
Altius Investech helps find a suitable buyer for your shares and if you are happy with the find we will move forward with the trade. We help make your experience with us as joyful and hassle-free as possible.
Our expert team will help you clear any doubt that you may have and assist you in every step of the process.
In case you need any personal assistance, you can reach out to us at +91 8240614850 or [email protected]
Visit- https://altiusinvestech.com/ for more details.
To know more about top 5 Unlisted Shares. Visit- https://altiusinvestech.com/blog/best-5-unlisted-shares-to-buy-in-india/.