Please reach out to us if you cannot find an answer to your question here!
Investolane is an authorized stockbroker for Reliance Securities Limited in Dehradun, Uttarakhand. It is registered on NSE as an Authorized Person (AP). Investolane uses Reliance Securities’ platforms & tools to help in share trading in the Equity segment.
Unlisted Equity Shares are the shares of the companies which are not "yet" listed on any stock exchange (NSE & BSE) or have been “delisted” from the stock exchange, hence they are NOT publicly traded. Shareholders of such companies are deprived of the privileges enjoyed by the shareholders of companies that are listed on stock exchanges.
However, "not listed" does not mean that the shares cannot be traded. Shares of Unlisted Companies are traded in off-market transactions by the shareholders. Shares of Unlisted Companies may get listed in the future & hence there is a huge growth potential in these companies.
E.g., Tata Tech, Anand Rathi, Nazara Tech, Devyani, UTI, etc, were once traded in unlisted market before listing on Stock Exchanges (NSE & BSE). CSK Cricket, Tata Capital, NSE etc, are among companies which are currently being traded in unlisted market.
Investing in shares/equity is one of the riskiest investments ever known, hence there is no point in investing in shares if returns are not multi-bagger because risk to reward ratio should needs to be low. If there is high risk, there should also be high reward. If we talk about 2-3 decades earlier, when IPOs like Infosys came to the Indian Equity markets, the primary purpose was to raise money and those companies were at very initial stages of their life cycle. This was one of the reasons why those companies were able to give multi-bagger returns.
However, in today’s era, the companies which are primarily going for IPOs does so to give exit to the initial investors as well, the same investors who invested when those companies were at very initial stages of their life cycle. These investors are the ones who make multi-bagger returns. Therein, for retail investors like you and others, it is important to invest in the companies when they are at very initial stages of their life cycle so that retail investors can also make multi-bagger returns. Hence, this opportunity is now open to retail investors via unlisted company shares.
Furthermore, investing via unlisted equity shares gives opportunity to invest in Start-up companies. Start-up companies have unique and high growth business models. Investment in unlisted equity shares of such companies offer huge potential of returns wherein substantial value unlocking usually happens when they go for IPOs, also there is no other way to invest in these companies as their shares are only available in the unlisted/private equity market. This also gives an opportunity to invest in new age and innovative business. When these companies further raise capital, they may raise it at higher valuation and hence increase in their share price.
Finally investing in unlisted equity shares is one of the diversifications methods to investment portfolio. This asset class offers a good diversification opportunity to investors for wealth creation.
The procedure to invest in Unlisted Equity Shares is as given below:
A Client Master Report (CMR) is a digitally signed PDF certificate issued by a broker to a client with the details of their demat account such as demat ID, date of birth, bank details, nomination details etc.
CMR copy is used to transfer shares in a demat account from one broker to another. You can raise ticket or contact your broker to send you CMR copy. It is provided free of cost.
The price of unlisted equity shares is based on demand and supply of the shares. Demand and Supply changes based on company news, results and hence do the price.
Our role is to act as an intermediatory between buyer and seller and help them finalize a deal. We provide entry and exit window to the investors in unlisted market.
The price may be different and is not the same in the market for unlisted shares. Buyers and sellers need to do their own research before finalizing any deal.
Investment in unlisted equity shares is completely market-based and so are the returns. There is no fixed time horizon for get gain/returns in the unlisted shares.
Existing shareholders of the unlisted company sell unlisted equity shares. These can include Employees, Ex-employees, CEO, Promoters, Private Equity investors, and more. Current and ex-employees are given ESOPs by the company which they further sell in the unlisted market.
ESOPs are contracts that allow employees to buy a set number of the company’s shares at an agreed-upon price. ESOPs have a vesting period, during which they cannot be “exercised”, or turned into shares. This means employees need to work at a company for a certain number of years before they can benefit from ESOPs. Companies mainly offer ESOPs to attract and retain their top talent. Gone are the days of conventional salary packages. Employees, especially those at tech companies & start-ups, are increasingly demanding stock options (ESOPs), through which they can own stakes in the companies they work at and (hopefully) benefit from their growth. They are also used as a tool to instill more ownership among employees for improving performance.
Before IPO: There is no restriction on transfer of shares held in Demat form until IPO cut-off date of allotment of shares in the IPO which is generally a week before allotment of shares in the IPO.
After Listing: As per SEBI rules, all Pre-IPO shares have a locking for 6 months from the date of listing. You will see the shares in your Demat holding as shares under lock in.
Long-Term Capital Gain (LTCG): If an investor sells an unlisted stock held for more than 24 months, gain or loss on such sales is a Capital Gain or Capital Loss. LTCG – 20% with Indexation.
Short-Term Capital Gain (STCG): If an investor sells an unlisted stock held for less than 24 months, gain or loss on such sale is a Short-Term Capital Gain (STCG) or Short-Term Capital Loss (STCL). STCG – taxed as per slab rates.
The taxpayer can set off LTCL with LTCG and STCL with both STCG and LTCG. Note: In the case of a Non-Resident, LTCG on Unlisted Stock is 10% without Indexation.
Yes, completely 100%. Buying unlisted equity shares is legal in India. This is a Private Equity investment and HNIs, FII and DII like Rakesh Jhunjhunwala, LIC of India already have invested in many unlisted companies shares like CSK, Nazara, Star Health, and many others. Also, TV shows like Shark Tank India where aspiring entrepreneurs from India pitch their business models to a panel of investors and persuade them to invest money in their idea are from Private Equity sector only. Also, the payment of the buy unlisted equity shares is made through bank account only and shares are transferred in demat account. Third party transactions are illegal in unlisted equity shares market
All unlisted equity shares have different minimum investments. However, we at Investolane strive to keep the minimum investment limit as low as possible. On an average minimum investment can be in range of INR 35,000 - INR 40,000.
All unlisted equity shares are kept in NSDL (National Securities Depository Limited) or CDSL (Central Depository Securities Limited) Demat account which are the actual depository to store all listed and unlisted shares. No seperate account is needed to buy/sell unlisted shares. However, CDSL demat account is preffered to buy unlisted shares as complete buying and selling process in online and much easy than NSDL.
We at Investolane acts as an intermediary between buyers and sellers and help them make a deal. As we help one party to buy shares, we are helping other party to sell the shares. If one has already invested in unlisted shares, they can contact us to sell shares and we will help them find a buyer and to do the share transfer process as well.
To know more about share transfer process, please check here: HOW TO TRANSFER UNLISTED SHARES
Easiest facility by CDSL allows everyone to view their holdings, transactions, and transfer stocks online. This will enable them transfer stocks without submitting physical DIS at branches.
To know and understand complete process on registering and transferring unlisted equity shares online, please check here: HOW TO TRANSFER UNLISTED SHARES
Third party transactions are not allowed when buying unlisted shares. It means, the shares will be transferred to the same person demat account from where payment has been received. If any third-party transaction is found for any of the clients, the payment/share transfer will be kept on hold until written explanation is received from the client.
Yes, of course. If there is any corporate action pertaining to Unlisted/Pre-IPO shares and if you are holding the shares on respected record date, you will be eligible for such corporate actions (just like listed shares).
No, currently shares of around 100 companies are available in the unlisted market. Companies like LIC of India, went public but their shares were not available in the unlisted market. Hence not all unlisted company shares are available in the unlisted market.
Download complete list here: List of unlisted shares available
If you have any other questions, please contact us. Thank you.
INVESTOLANE
INVESTMENTS IN SECURITIES MARKETS ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING
contact : +91 96755 32143
Copyright © 2023 Investolane - All Rights Reserved
Designed by AmigosDigiArt.com [v5.10]
Handcrafted with ❤️ in India | Powered by GoDaddy
We use cookies to analyze website traffic and optimize website experience.