FAQs
Have questions about investing in unlisted and pre-IPO shares? We’ve put together answers to what our clients ask us most — from how unlisted shares work and how trades are settled, to documentation, timelines, and platform safety. If you don’t find what you’re looking for here, our team is just a message away and happy to walk you through it.
What are unlisted shares?
Unlisted shares are equity shares of companies that are not traded on stock exchanges like NSE or BSE. These shares are bought and sold privately through authorized intermediaries or existing shareholders.
What are Pre-IPO shares?
Pre-IPO shares are shares of a company before it gets listed on a stock exchange. Investors buy these shares expecting the company’s valuation to increase after the IPO.
Are unlisted shares risky?
Like every investment, unlisted shares carry risks including lower liquidity, limited public information, valuation uncertainty, and longer investment horizons. Proper research and diversification are essential before investing.
How are unlisted share prices determined?
Prices are determined based on demand and supply, recent private transactions, company financials, industry outlook, business growth, and expected IPO valuation.
Can I sell unlisted shares before the company gets listed?
Yes. Unlisted shares can usually be sold through private market transactions before an IPO, provided there is a willing buyer.
Who can invest in unlisted shares?
Any eligible Indian resident with a Demat account, completed KYC, and applicable documentation can invest in unlisted shares, subject to regulatory requirements.
How are unlisted shares taxed in India?
If you sell unlisted shares within 24 months, the gains are treated as Short-Term Capital Gains (STCG) and taxed as per your income tax slab. If held for 24 months or more, they qualify as Long-Term Capital Gains (LTCG) and are taxed at 12.5% (without indexation). STT is not applicable on unlisted share transactions. If the shares are sold after listing on a stock exchange, the tax treatment follows the applicable rules for listed shares.
Why should investors consider unlisted shares?
Unlisted shares provide early access to growing businesses before they become publicly traded. They can offer portfolio diversification and the potential for capital appreciation if the company performs well and eventually goes public.
What is the difference between listed and unlisted shares?
Listed shares are traded publicly on stock exchanges, while unlisted shares are traded privately through off-market transactions. Unlisted shares generally have lower liquidity but may offer higher growth potential.
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