Investor Education

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We provide guidance to Clients in their journey of Alternative Opportunies in unquoted / unlisted shares. We help Clients from the most preliminary steps like educating them how the unquoted / unlisted share markets work, how to transact in unlisted shares, what are the things all should know about unquoted market, various pit falls to avoid and tips on successful growth .

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What Are Unlisted Shares?

Unlisted shares belong to companies that have not yet been listed on any formal stock exchange. These companies may be privately held or public limited companies whose shares are owned by a small group of investors, founders, or private equity firms.

Unlisted shares are further divided into three categories:

Pre-IPO Shares

These belong to companies on the verge of going public, meaning they will soon launch an IPO and get listed on the stock exchange. Investing in Pre-IPO shares allows investors to enter early at lower valuations before the company goes public.

ESOP Shares (Employee Stock Option Plan)

These are shares issued to employees as part of a company’s incentive program. Employees receive these shares at a discounted price as a motivation tool for long-term commitment and company growth.

Delisted Shares

Delisted shares belong to companies that were once publicly traded but have been removed from the stock exchange due to various reasons (mergers, acquisitions, regulatory non-compliance, etc.). These shares can no longer be traded on stock exchanges but may still be bought and sold over the counter (OTC).

What Are Listed Shares?

Listed shares belong to companies that are publicly traded on recognized stock exchanges, such as the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). These shares are accessible to the general public and are subject to stringent regulatory guidelines.

According to Section 2 (52) of the Companies Act, 2013, a listed company is one that has its securities registered on a recognized stock exchange. Such businesses must comply with the listing requirements and disclosure norms set by SEBI (Securities and Exchange Board of India).

Key Differences Between Listed and Unlisted Shares

Apart from their listing status, listed and unlisted shares differ in several aspects, including their trading platform, regulatory body, taxation, liquidity, risk, and returns.

Trading Platform & Legality

Listed Shares: Traded on recognized stock exchanges like NSE & BSE.
Unlisted Shares: Traded over the counter (OTC) through private transactions, brokers, or investment firms.

Both listed and unlisted shares are legally tradable in India.

Regulatory Oversight

Listed Shares: Regulated by SEBI and stock exchanges, ensuring high transparency and compliance.
Unlisted Shares: Governed by the Companies Act, but not subject to SEBI’s strict public market regulations.

Listed companies must follow disclosure requirements (quarterly earnings reports, investor transparency, etc.), whereas unlisted companies face fewer reporting obligations.

Taxation of Shares

Taxation rules differ based on the holding period of the investment.

Long-Term Capital Gains (LTCG) Tax

Listed Shares: Taxed at 12.5 % after an exemption of ₹1 lakh.
Unlisted Shares: Taxed at 20% with indexation benefits (adjusted for inflation).

Short-Term Capital Gains (STCG) Tax

Listed Shares: Taxed based on the investor’s tax slab.
Unlisted Shares: Taxed at 15% for holdings less than 12 months.