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A guide to Unlisted Shares / Pre-IPO/ Delisted Shares - Babli Investment

Unlisted shares

Unlisted shares are the shares of companies that are not listed on any stock exchange and thereby it is not traded publicly. The shareholders of such top unlisted companies in India do not get the privilege that is available to the shareholders of companies listed on stock exchanges (i.e BSE/ NSE/ MSEI). 

An unlisted security is a financial instrument that is not traded on a formal exchange because it does not meet listing requirements. Unlisted securities are also called OTC securities, as trading is done on the over-the-counter (OTC) market mostly by market makers.

Shares of unlisted companies may get listed in the future on the stock exchanges. It is essential to facilitate trade in such unlisted shares by matching buyers and sellers thereby enabling liquidity to current shareholders and enabling new investors to participate in the future growth of the company.

Unlisted shares offer different risk dynamics and can be complementary to someone who is invested in listed shares. They can be a good means to diversify the portfolio. Best Unlisted shares to buy in India offer similar to better return potential as compared to that of listed shares.

There is nothing wrong with trading unlisted shares. However, there are some unhealthy practices in this business. Just the kind of thing that needs regulatory attention before many small investors are misled into unsuitable investments. If you are an intelligent investor and have good knowledge about shares, then definitely you should go for investment in Unlisted Shares. It also helps to research the best low price shares to buy.

Unlisted companies are not obliged to pay dividends to shareholders or if they do, they may be infrequent. Instead, many small companies choose to reinvest profits in the business to facilitate further growth.

Top rated shares in India which always perform well include Reliance, TCS, HDFC bank, ICICI bank, infosys and are the best shares to invest for long term in India. SBI, Adani trans, bajaj finance, ITC are also performing well and are the best it shares to buy. Good shares to buy now in India apart from the ones mentioned above also include adani ports, apollo hospitals, asian paints, axis bank, bajaj auto.

They are also undervalued stocks in India which are those stocks whose current price is trading at a discount to their intrinsic value. Undervalued shares in India is a stock whose current price is Rs.80, and its estimated intrinsic value is Rs.100, is said to be trading at a 20% undervaluation.

Undervalued company stock is one that is consistently profitable and has attractive long-term growth prospects but whose share price is cheap compared to many of its peers. Thus doing research regarding the best undervalued stocks in India can be a great option for patient buy-and-hold investors willing to wait for hidden bargains. Most undervalued stocks in India include globus spirits, vindhya telelink, UPL ltd., JK Lakshmi.

Pre-IPO stock

“Pre-IPO” investing involves buying a stake in a company before the company makes its initial public offering of securities.

Pre-IPO stocks may be a good investment for those with a high net worth and a high-risk tolerance, so if you’re seeking to understand startup companies and make returns before a company goes public, a pre-IPO purchase may be a reasonable addition to your portfolio.

Buying pre-IPO shares in a company is a great idea if you can accurately predict the future potential of a company. If everything goes according to plan, there are seldom better opportunities in the market. Purchasing the stock at a lower price also gives investors a safety net to avoid losses. Brokers and financial advisors often take part in pre-IPO trades. They may have acquired stocks that they are willing to sell or represent sellers who seek buyers. You can ask your current broker about pre-IPO stocks or use a broker that specializes in pre-IPO sales.

Investing in pre-IPO stock can be a strategic way to build wealth in the long term. If you manage to invest in the right company at the right time, you can get tremendous returns on your investment. There are risks in pre-IPO investing – as is the case with any other investment – but the upsides can be tremendous. Experts suggest that investment in pre-IPO and unlisted shares should only be done by investors with an aggressive risk attitude/profile.

A number of web-based companies, such as EquityZen and SharesPost, connect sellers of, and investors in, pre-IPO shares. Pre-IPO private company stock exchanges are essentially ventured capital markets for the masses. An employee who holds stock in a pre-IPO private company can list shares for sale on such an exchange. Can you sell an IPO immediately? IPO trading starts when the market opens on listing day. You cannot sell the share prior to it. They can only be sold at or after the market hours begin

The value of your pre-IPO stocks is likely determined by the most recent assessment of your company’s fair value, rather than by a fair market price as with publicly traded shares.

 An IPO lock-up is a period of days, typically 90 to 180 days, after an IPO during which time the shares cannot be sold by company insiders. Lock-up periods typically apply to insiders such as a company’s founders, owners, managers, and employees but may also include early investors such as venture capitalists.

Delisted shares 

The term “delisting” of securities means the removal of securities of a listed company from a stock exchange. As a consequence of delisting, the securities of that company would no longer be traded at that stock exchange.

Delisting is the removal of listed security from a stock exchange. The delisting of security can be voluntary or involuntary and usually results when a company ceases operations, declares bankruptcy, merges, does not meet listing requirements, or seeks to become private.

Delisting does not directly affect shareholders’ rights or claims on the delisted company. It will, however, often depress the share price and make holdings harder to sell, even as thousands of securities trade over the counter. When a company is delisted, its shares are no longer eligible for trading on the stock exchange. As a shareholder and if you continue to hold on to the shares post-delisting, you will continue to have legal and beneficial ownership and rights over the shares that you hold in the company.

When the shares get delisted it means you can’t sell the shares on NSE or BSE. However, you still hold ownership of the shares and are eligible to share the sales outside stock exchanges.

Once a stock is delisted, stockholders still own the stock. However, a delisted stock often experiences significant or total devaluation. Therefore, even though a stockholder may still technically own the stock, they will likely experience a significant reduction in ownership.

The delisting of shares results in the impossible selling of shares until the company goes through the exit route. It is effectively irrecoverable and is a loss to the taxpayer. Once the company goes through liquidation or is referred to NCLT under IBC, NCLT declares the company to drop the shares and claim the loss.

Conclusion 

Investing in shares can be very profitable however taking the help of an expert will ensure you have all the information to invest in the best share in India. If you wish to invest in stocks of companies in India, you have to do it through the stock exchanges. The two most prominent stock exchanges in India are – the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). However, for a common man, it’s not possible to buy stocks directly from the exchange. They need middlemen to execute the trade; such middlemen are known as ‘stock brokers’. Brokers ensure a smooth trading experience for the investors and follow the rules and procedures. The role of a stock broker is to facilitate the buying and selling of stocks at the stock markets, on behalf of investors. There are many prominent stock brokerage firms in India through which you can trade in stock exchanges.

Want To Buy Unlisted And Delisted Shares ?

Buy & Sell Unlisted Shares At Competitive Prices. Get Best Deals And Offers On Unlisted Company Shares Of HDB Financial Services, Her FinCorp, Sygenta Limited, Paytm, One 97, Metropolitan Stock Exchange Of India, Etc. Here You Will Find All The Unlisted Company Shares Available And Ready For Trade. Babli Investment Is A One Stop Shop For All Buyers And Sellers Of Unlisted & Delisted Shares

“It was a privilege to see a new band of Indian Advisors in the likes of Sanjay with a unique approach and consistent hardwork in this field for well over a decade , A True champion in every sense !”

Mr. Tony Wilkey
Chief Executive Officer, Asias Prudential Corporation
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