What Are Unlisted Shares?

Equity shares of businesses that have no listing on any reputable stock exchange, such as the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE) in India, are also referred to as unlisted shares. Through private placements, over-the-counter (OTC) marketplaces, or mediators like brokers or expert investment platforms, these shares are assigned rather than exchanged openly.

These are frequently seen in high-growth startups, the initial stages of businesses, or subsidiaries of listed firms that are in the pre-IPO stage or did not choose to go public. Some well-known unlisted shares include companies like NSE, NSDL, NSDL e-Gov, TATA Capital, SBI AMC, and MSEI.

TYPES OF COMPANIES OFFERING UNLISTED SHARES

  • Startups and Early-Stage Ventures.
  • Pre-IPO Companies.
  • Private Limited Companies.
  • Joint Ventures and Strategic Partnerships.
  • Subsidiaries of Listed Companies.

    FEATURES & BENEFITS OF UNLISTED SHARES:
  • Privately Traded
  • Early-Stage Access
  • Pricing Based on Valuation
  • Governed under the Companies Act, 2013
  • Implications for Taxation

TYPES OF UNLISTED SHARES:

  1. Equity Shares
  2. Preference Shares
  3. Convertible Debentures
  4. ESOPs (Employee Stock Option Plans)
  5. Promoter Holdings or Warrants

ADVANTAGES OF UNLISTED SHARES:

  1. High Return Potential
  2. High Return Potential
  3. Early Access to High-Growth Businesses
  4. Less Speculation
  5. Discounted Valuations

DISADVANTAGES OF UNLISTED SHARES:

  1. Illiquidity
  2. Lack of Transparency
  3. High Risk
  4. Long Investment Horizon
  5. Long Investment Horizon