Unlisted shares explained FOR Beginners
Investing in shares is a common way for individuals to grow their wealth over time. While most people are familiar with buying shares of publicly listed companies, there’s another avenue for investment that often gets less attention. Unlisted shares, also known as private shares or private equity, can offer unique opportunities and challenges for investors. In this beginner’s guide, we’ll explore what unlisted shares are, how they differ from listed shares, and what considerations you should keep in mind if you’re thinking about investing in them.
What Are Unlisted Shares?
Unlisted shares, also known as private shares, refer to shares of a company that are not traded on a recognized stock exchange. Unlike listed companies whose shares are traded on platforms such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE), unlisted companies’ shares are bought and sold through private transactions. These companies can range from startups to established enterprises, each offering unique investment opportunities.
Why Invest in Unlisted Shares in India?
Investing in unlisted shares in India presents several compelling reasons:
- Potential for High Returns Unlisted shares have the potential to deliver high returns, especially in the case of startups and growing companies that may not yet be listed on the stock exchange.
- Diversification: Adding it to your investment portfolio allows for diversification beyond traditional asset classes, helping to spread risk and potentially enhance returns.
- Access to Promising Startups: India is home to a vibrant startup ecosystem, with numerous innovative companies emerging in various sectors. Investing in unlisted shares provides access to these promising startups at an early stage.
How to shortlist PRE IPO Investments?
- Prior Investments by VC/PE Firms: Look for companies that have received investments from well-known Venture Capital /Private Equity firms.
- Significant Mispricing leading to value creation from Listed/Global Peers: Look for instances where listed or global peers are trading at significantly higher valuations compared to the pre-IPO company.
- Reasonable Liquidity and availability of options: Evaluate the liquidity of the pre-IPO investment, considering factors such as the size of the investment, lock-up periods, and the company’s plans for listing.
- Companies on a definite IPO track: Focus on companies that have a clear roadmap for an initial public offering (IPO) within a reasonable timeframe.
How to Invest in Unlisted Shares in India with Altius Investech
To buy unlisted shares with us, here is a simple process of making an investment quick and simple.
- Sign Up & KYC: Start by signing up on the platform ( https://trade.altiusinvestech.com) and complete the Know Your Customer (KYC) process, ensuring a secure and compliant onboarding.
- Place Order: Choose the unlisted shares you wish to buy, then place your order with the specified quantity.
- Complete Payment: Once the order is placed, make the payment through the provided payment methods, ensuring a smooth and transparent transaction.
- Quick Execution: Experience fast execution, with your trade completed within 24 hours. This ensures a prompt and efficient process from order placement to share ownership.
Important Note–
Please note that the lock-in period for selling it is six months after listing. Hence you cannot sell it that you bought in Pre-IPO for six months after its listing. For any query/ personal assistance feel free to reach out at support@Altiusinvestech.com or call us at +91-8240614850.
Some of our notable exits in the last decade are mentioned below. We have always suggested our clients invest for the long term for sustainable wealth building. The table below gives the multiple exits in an IPO from our recommendation date.
| Stock | Recommendation Month | Initial Investment Price | Listing Date | IPO Listing Price | Return Multiple | Years Invested |
|---|---|---|---|---|---|---|
| ICICI Prudential Ltd | Feb’11 | 70 | 21 Sep’16 | 350 | 5.0X | 5.0 |
| BSE Limited | Feb’10 | 120 | 25 Jan’16 | 1069 | 8.9X | 5.5 |
| RBL Bank Limited | May’14 | 76 | 19 Aug’16 | 518 | 6.8X | 2.0 |
| ICICI Lombard | May’12 | 70 | 19 Sep’17 | 681 | 9.7X | 5.0 |
| Indian Energy Exchange (IEX) | May’16 | 750 | 11 Oct’17 | 1629 | 2.2X | 1.0 |
| HDFC Standard Life | Nov’14 | 190 | 9 Nov’17 | 345 | 1.8X | 3.0 |
| L&T Infotech | May‘15 | 650 | 13 July’16 | 698 | 1.1X | 1.0 |
TO KNOW ABOUT THE BEST 5 UNLISTED SHARES IN INDIA, READ THIS:
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To learn more about How to apply for an IPO. Click- https://altiusinvestech.com/blog/how-to-apply-for-an-ipo/
To buy unlisted shares of any company. Click here – https://altiusinvestech.com/companymain