Investing in Unlisted Shares. What are Unlisted Shares? How to invest in Unlisted Shares?
The shares, also known as equity, are the legal ownership of a company. When you invest in Unlisted Shares, you’re buying the rights to invest in the future financial performance of a company through its share price.
Unlisted Shares
Unlisted shares are shares that are not listed on any stock exchange. They’re sold directly to investors by the company and not traded on any stock exchange. This makes them a more difficult investment than listed shares. Unlisted shares don’t have any official price tag (the price of an unlisted share is determined by supply and demand). But they can still be bought or sold at a certain price if you know what you’re doing. The first step in buying unlisted shares is finding out who owns them! This will help determine whether there’s enough liquidity for your purchase and if so, how much it’ll cost.
Difference between IPOs and Unlisted Shares
The two types of shares are:
IPO: An Initial Public Offering is a public offering of shares to the general public.
Unlisted Shares: These are not offered to the general public, but they can be bought and sold through a brokerage. Unlike IPOs, which are regulated by SEBI (Securities & Exchange Board of India), unlisted share transactions don’t require any approvals from regulatory bodies such as SEBI or NSE (National Stock Exchange).
Advantages of investing in Unlisted Shares
Investing in unlisted shares is one of the best options for investors. The reason behind this is that you get to be an early investor, which means there are higher chances of possible returns and less stock market uncertainty. Also, since these shares do not have any listing in any exchange or the stock market, you can buy them at a discounted rate.
The main advantage of investing in unlisted shares is that they offer better returns compared to other instruments like Government Securities (GS), debt securities, etc. because these instruments have been issued by companies that are already listed on either BSE or NSE but not traded openly on these exchanges as well as there may be some issues related to liquidity. These issues may include a lack of information about the valuation process if any; lack of disclosure about certain aspects relating share price movements etc., which results in differentials between quoted prices at various times depending upon whether they’ve been liquidated or not.
Why does a company go private?
You may have heard of the term “going private”. This simply means that a company has decided to take itself out of the public eye by becoming privately owned, rather than publicly traded on a stock exchange. The reasons why companies go private vary from one industry to another but there are some commonalities:
● They want to avoid scrutiny from investors, regulators, and other stakeholders in their business.
● They want to ensure they can focus on growing revenue without worrying about having their activities scrutinized by the media or competitors.
How to invest in unlisted shares?
Investing in unlisted shares is not a simple process. You need to know the market, the company, and its prospects before you can invest in it. You can purchase them from an existing broker such as Goodwill Wealth Management. Investment brokers are the middlemen between investors and companies, who help you find out about a company, as well as purchase or sell shares in it. Some of these brokers will also act as registered stockbrokers (RSB), meaning they have been approved by SEBI. Get access to the lowest brokerage charges in India with Goodwill when you invest.
Important points to remember before investing in unlisted shares
Before investing in unlisted shares, you should know that it’s not a sure-shot way to make money. There are several risks involved with investing in unlisted companies. One risk is that the company may go bankrupt and lose all your money. Another risk is if a company goes bankrupt, then it may be hard for you to get your money back because there will be no liquidation process available to recover any losses suffered by investors during the event of insolvency (when a company becomes insolvent). Other important things to remember before making an investment decision on whether to invest in an unlisted share include:
● Keep track of how well they perform financially as they accumulate more capital inflows from shareholders who have bought into their business model;
● Understand what makes them unique compared with other companies operating within their industry segment (for example, if they’re trying something different);
● Check management team credentials such as education levels/experience levels along with experience working within relevant industries locally or internationally;
● Check financial statements covering annual profits made over 3 years – 4 years
Know where to look and invest carefully
It is important to find a reputed broker who understands the risks and rewards of investing in unlisted shares. You should look for a broker who has experience in this area, as well as someone you can trust. If you are interested in learning about Unlisted Shares and investing, then Goodwill is the one for you.
They are one of the best equity brokers in India. Get free Trading and Demat Account opening in less than 10 minutes. You will receive on-time support and free training with webinars. Register today and start investing the same day! So why wait? Contact Goodwill and one of the executives will get in touch with you shortly.
To get more insights about IPOs, read our blogs:
The Techniques of Pricing IPOs
What are IPOs? How do they work?
How Does a Company Create New Shares During an IPO?
How to Invest in IPO Online? What are the Benefits of IPO?
What Are Pre-IPO Shares? How to Invest in Pre-IPO Shares in India?
What You Should Know About Mainboard IPO and SME IPO Before Investing
How can One Invest in a Company Before it is Listed on the Stock Exchange?