We are all aware of the advantages of investing in equity – it offers unprecedented upside if done correctly. Pre IPO investing provides an even higher upside than listed markets if done well. Lets look at some of the top 3 reasons to invest in Pre IPO Companies:
1. Diversify Risk:
Unlisted shares have different risk dynamics and can be beneficial to someone who is already invested in listed stocks. They can be an effective way to diversify a portfolio. Unlisted shares have comparable to better return potential than listed shares. These stocks may go public at some point in the future, which could provide significant upside when they are listed on stock exchanges. However, whether investing in listed or unlisted shares, it is critical to consider valuation metrics in addition to price and to seek out undervalued stocks with significant earnings growth potential.
2. Undervaluation due to a lack of liquidity:
Because most unlisted shares are illiquid, they can only attract a specific community of investors who are willing to stay invested for a longer period of time. The valuations are generally lower due to the lower demand for these investments and the lower number of participants who want to be a part of this community. There are numerous opportunities to invest in a stock that is undervalued. However, identifying such opportunities requires some foresight and knowledge. It may be preferable for a beginner to seek the assistance of an expert who can provide the necessary guidance.
3. Access to New Sectors :
Unlisted Pre IPO markets give access to certain sectors where no listed counterparts exist. For example for :
1) E-Pharma delivery : Pharmeasy Pre IPO shares are available
2) Cricket Team/Sports : Chennai Super Kings Pre IPO shares are available
3) Holding Company: ELCID Investment/ Bharat Nidhi
4. Being a part of the value creation from an early stage
More companies are now staying private longer than before and therefore for investors to make good gains on portfolio, it makes sense to invest in such companies early on. This is where PreIPO markets really helps them get exposure in such companies early in the company’s life cycle.
What is the Minimum ticket size in Unlisted Shares?
You can start investing in unlisted shares with just Rs.10000 with Altius. Also, there is no brokerage/service charge or any hidden charges with us. We provide a buy-sell quote on every trade. Huge client base and massive volumes help us to provide best rates in the industry.