No. SEBI does not regulate unlisted shares, however unlisted companies are regulated under Companies Act,2013 (erstwhile 1956)

Equity shares of a Company that are not yet listed on any recognized Stock Exchanges in India like BSE, NSE, MSEI, etc.

Pre-initial public offering (IPO) shares are shares of those Companies who have either filed Draft Red Herring Prospectus (DRHP) with SEBI for IPO or Offer for Sale (OFS). They are also termed as “yet to be listed shares”. Investing in such shares below IPO floor price offers potential for significant gain.

Investing in unlisted/ Pre-IPO shares provides the opportunity to an investor –
– to participate in the growth trajectory of the investee Company;
– to invest at fair/below intrinsic valuation;
– to provide the potential for higher future return.

Unlisted shares are the one which are not yet listed on any recognised or formal stock exchanges like NSE, BSE or MSEI in India, however, delisted shares are the one which were once listed on recognised or formal stock exchanges in India but for some or various reason promoters have chosen to delist the same. Once such example is Hexaware Technologies Limited.

With market regulator SEBI’s permission, the voluntarily delisted shares can be relisted on the recognised or formal stock exchange after a period of 5 years from the date of delisting. Compulsorily delisted shares can be relisted after a wait period of 10 years from the date of delisting after obtaining permission from the market regulator SEBI

Since April 01, 2019, unlisted shares have to be held compulsorily in Demat form. Such shares cannot be held in physical certificate forms anymore.

Click here to understand the process of buying and selling unlisted/pre-IPO shares.

Yes, Quantmac assists you with buying and selling unlisted shares. Although we would request you to make the investment decisions after thorough due diligence and research at your end. You are also advised to seek sufficient investment advice from your financial advisor.

Following set of documents are required while investing in pre-IPO or Unlisted shares of the Buyer
– What documents are required for investing in unlisted shares/ Pre-IPO shares through Quantmac?Self- attested copy of PAN
– Self- attested copy of Address proof
– A cancelled cheque
– Client Master List (CML) as obtained from the DP

The price of an unlisted share includes its business worth and a component of investor sentiment including demand and supply factors.

Unlisted shares are freely transferable before the allotment date in an IPO (at this point in time the ISIN number changes) except where the transfer is restricted by the subject Company. Post allotment, once shares are listed, the transfer is restricted are for a period of 6 months from the date of listing for non-promoter shareholders and 18 months for promoter shareholders.

Click here to get the latest indicative prices.

Unlisted shares are inherently illiquid unlike traditional Equity and should be considered as a part of the Alternative Asset Investment class. Such shares are suitable for a long term horizon and the investor should ideally remain invested for a period above 3 to 5 years.

Individuals or firms with a high-risk tolerance and do not have immediate liquidity requirements can invest in unlisted shares provided the time horizon is 3 to 5 years.

Investors should invest only a discretionary part of their portfolio/surplus which is not required in the short term horizon i.e., below 3 years due to the illiquid nature of such investments. Such investment generates meaningful returns only when the investment horizon is long term.

The profit earned by selling unlisted shares is taxed as “Capital Gain”. The rate at which such Capital Gain is taxed depends up on the Holding period. The indexation benefit is also available.

– Wide bid-ask spread

– Illiquidity, opaque market structure and imbalance in demand and supply;

– Lesser or no dividends as early-stage or start-ups tend to re-invest profits into their business;

-Change in underlying business fundamentals adversely impacting original investment rationale;

-Information asymmetry;

-Delay in IPO;

-IPO may never come;

-IPO floor price may turn out to be lower than investor’s expectation;

-Market circumstances and mood may change between the time of admission and the IPO event resulting in a bad listing;

-A firm has to meet all necessary compliances and requirements before filing for IPO. On failing to do so, IPO can be postponed.

Quantmac is not a registered Investment Advisor. It is an investor and trader of unlisted shares. Quantmac provides fair and transparent prices along with factual information through its product notes. Investment decisions, risk tolerance, ability and constraints are unique to each investor. Please consult your financial advisor and carry out thorough due diligence before taking any investment decision.

– The peculiar feature about unlisted shares are information asymmetry, however, we at Quantmac carry out the primary research by collating all possible data logically basis information available in the public domain about the subject Company;

– Quantmac provides the lowest possible price with transparency and at no hidden cost;

– Benefit of fastest execution since Quantmac transfer shares online once the payment is received without having need  to put up physical DIS