Unlisted shares are shares of companies that are not listed on stock exchanges. They are traded over-the-counter (OTC) without the involvement of a recognized stock exchange.

Note:

• Unlisted shares can be bought or sold through dealers.
• They are traded in demat format.
• Transactions in unlisted shares may take a few days to a few weeks.

Yes, buying unlisted shares is legal. However, investors must exercise caution as the market for unlisted securities is illiquid, risky, and unregulated.

No, once a company is listed, its shares are traded on a recognized stock exchange. If a listed company issues new shares, it does so through methods like Follow-on Public Offerings (FPOs), bonus issues, or rights issues, which are part of the primary market and not considered unlisted shares. 

You can sell unlisted shares through:

• Direct sales to interested buyers via a broker or dealer.
• Selling them when the company goes public after an IPO announcement.
• Participating in a buyback if the company announces one.
• Selling the shares if the company gets acquired by a listed company.

Investing in unlisted shares can be profitable if you conduct proper research on the company. These shares help diversify an investment portfolio. However, since they are illiquid and can take a long time to generate returns, investors should only invest funds they do not need immediately.

You can purchase unlisted shares through brokers or dealers.

Steps to buy unlisted shares:

1. Find a broker who deals in unlisted shares.
2. Contact them via phone or email to express interest.
3. Complete KYC with the broker (PAN, Aadhar, Cancelled Cheque, Demat Client Master List).
4. Place an order at an agreed price.
5. Transfer funds to the broker’s account.
6. The shares will be credited to your Demat account within 1-2 working days.

Alternatively, you can directly purchase from an existing shareholder willing to sell.

Unlisted shares belong to startups, company promoters, and IPO aspirant firms. They are bought and sold OTC (over-the-counter) through brokers.

• The minimum investment size for unlisted shares is usually higher.
• Prices fluctuate based on demand, company performance, and expected IPO listing.
• Transactions are done via brokers specializing in unlisted shares trading.

Unlisted shares are not publicly traded on stock exchanges. These include:

• Pre-IPO company shares
• Startups and new-age companies
• Delisted company shares
• Shares owned by promoters looking to offload their stake

Listed Shares:

• Publicly traded on stock exchanges.
• Regulated by SEBI and stock exchanges.
• High liquidity with an immediate exit option.
• Can be traded via online brokerage platforms.

Unlisted Shares:

• Not traded on stock exchanges.
• Governed by the Companies Act.
• Exit options may take longer.
• Higher minimum investment required.

• Invest in early-stage companies with high growth potential.
• Hold them until the company announces an IPO.
• Sell shares to interested buyers through brokers.
• Participate in a buyback when offered by the company.

Unlisted shares are typically long-term investments, so investors should analyze the company’s financials and growth potential before investing.

Unlisted shares are primarily traded through brokers and involve the following steps:

1. Find a trusted broker.
2. Agree on the price and quantity.
3. Complete KYC verification.
4. Transfer funds to the broker.
5. The broker credits shares to the Demat account within 2 working days.

Note: Prices quoted by brokers usually include commission and stamp duty.

Follow these steps to sell unlisted shares:

1. Find a broker willing to facilitate the sale.
2. Agree on the price and transfer the shares to the broker’s Demat account.
3. The broker transfers the funds to your bank account.

Note: If the company is going public, a six-month lock-in period applies after listing.

The process remains the same as mentioned earlier. Investors must identify a broker, complete KYC, and finalize the trade.

Unlisted shares are classified as a long-term capital asset if they are held for more than 24 months. The tax rate for long-term capital gains (LTCG) is 12.5% without indexation benefits.

Yes, unlisted shares are now traded in demat format. Investors should convert physical shares into demat to ensure easy transactions.

Yes, they can be sold through:

• IPO announcements.
• Buyback programs by the company.
• Direct sale via brokers or dealers.

Yes, if investors conduct proper research. Since unlisted companies disclose less information, it is crucial to analyze:

• Business model and future growth.
• Financial statements.
• Potential IPO plans.

Yes, indexation is allowed when calculating LTCG tax on unlisted shares, reducing taxable gains.

No, Securities Transaction Tax (STT) applies only to listed shares traded on stock exchanges.

Yes, stamp duty of 0.015% of the market value is applicable when transferring unlisted shares.

Unlisted shares provide investors with early entry into promising businesses and potential high returns.

Benefits:

• Invest at an early stage in high-growth companies.
• Get pre-IPO shares at lower valuations.
• Diversify investments beyond listed stocks.
• Potential for high long-term returns.