Investment in the stock exchange has grown over the years. Today many people are investing and trading in stocks. Investors are always looking for supplies that will bring them higher returns. The chase for higher returns often takes the investors to unlisted company shares, which is an unknown & buzzing topic for many new traders.
So, if you are looking for all the details about it, read the article as we have covered everything about unlisted shares.
What are unlisted company shares?
The unlisted shares are the shares that are not listed or registered on the formal stock exchanges. Many new companies that do not go public yet and private companies have unlisted shares, for instance, Jio, Ola, etc. these companies sell these shares at lower and discounted prices to get investment.
SEBI regulates the stock market, the pricing and disclosure are transparent, making it less risky for investors & traders. The unlisted shares are not acceptable and have a higher risk than listed shares but are highly profitable when you invest in company shares that have the potential for enormous growth in the future. You will surely get higher returns when the company goes public.
Is it too risky?
The main risk involved in unlisted shares is investment choice, whether the unlisted company shares you bought would go public or not or will have profit in the future.
And the other thing is when the company shares do not hold value or the company is not making profits & going through losses, it will be hard to sell the shares.
The higher returns can only be ensured with the company’s deep fundamental and management analysis and your skills to identify the company’s potential growth.
Benefits of investing in unlisted shares
- Higher returns when the company go public in the future
- Long-term investment benefits
- You can negotiate with the buyer/seller and choose the price of buying/selling.
- You can diversify your investments.
How do you buy unlisted shares?
Unlisted shares are made directly between the buyer and seller over the counter, connected via intermediaries between them. It is trading Over the market (OTC), which takes place out of the formal stock exchange through brokers or brokerage firms, so the credit risk is involved, which both the parties have to carry out as the trading process only takes place when both parties come in agreement.
Before you buy unlisted shares, you need to find their fair market value (FMV) for knowing the value of the unlisted share as they are not listed.
Nowadays, online trading is popular. You can buy unlisted shares online at various platforms.
But be careful when you choose the online platforms as it is one of the factors that can minimize your risks involved in the unlisted shares trading.
Some online platforms to buy unlisted shares Online
We know it could be hard to find an online platform to buy unlisted shares online, so here we have listed some of them:
- Unlisted assets
- Unlisted Zone
- Groww
Final Thoughts
The unlisted shares can be considered hidden gems when you invest in the right company. It is riskier and takes lots of time & effort for profitable returns, so for people looking for long-term & higher gain investments and willing to take risks, unlisted shares are the best option for them.