FAQs on Private markets unlisted delisted and preipo share

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Unlisted Shares are securities that are not traded on an exchange (NSE, BSE or MSEI) but through the Over-the-counter (OTC) market. Unlisted securities are also called OTC securities. Market makers/Influencers facilitate the demand and supply of unlisted securities in the OTC market.

Initial public offering is the process by which a private company can go public by sale of its stocks to the general public. After IPO, the company's shares are traded in an open stock market (NSE, BSE or MSEI). Such shares can be further bought/sold by investors in the secondary market trading.

A pre-initial public offering (IPO) placement is a late stage for a private company to raise funds in advance of its listing on a public exchange (NSE, BSE or MSEI). An offering of shares in a company before its initial public offering (IPO), the buyers in a pre-IPO placement usually get a discount from the price stated in the prospective for the IPO. The only limitation in dealing in Pre-IPO shares is that there is a lock-in period of one year from the date of listing.

Before IPO: There is no restriction on transfer of shares held in Demat form until IPO Cut-off date of allotment of shares in the IPO (Generally a week before allotment of shares in the IPO). After Listing: As per SEBI rules, all Pre-IPO shares have a Lockin for 1 year from the date of listing. You can see the shares in your Demat holding as shares under Lockin.

Delisted shares refer to the shares of a listed company that has been removed from stock exchange permanently for buying and selling purposes. That means delisted shares will no longer be traded on the stock exchanges – National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

A listed company is listed on a particular stock exchange (NSE, BSE or MSEI) and the shares are traded on such stock exchange. An unlisted public company is one which is not listed on any stock exchange, but the shares of such companies can be traded on Over the counter Market.

Hidden gems! Quality unlisted stocks can spin money in no time (Read more), but they are risky. The major risks involved in such deals are:

A. Management Risk: The Company Management may not be able to execute the operations as planned due to internal as well external factors.

B. Timeline Risk: It highly depends on the Listing date of a company and its management. Also, it can take longer than expected to get listed or may not get listed at all.

C. Liquidity Risk: There is liquidity risk in an unlisted company, and one may not be able to sell the shares as and when required.

Please check the procedure link on our home page

The minimum invest amount is Rs. 10,000-20,000, depending on the price and quantity of shares.

The shares are sold by existing investors who own these shares and are part of the company. The shareholders generally include current and ex-employees, private investors etc.

No. These are Off market transactions, and the Company is not involved in any such transactions.

The shares that we are dealing in are available in Demat form only.

For most Pre-IPO and Unlisted stocks, Time horizon depends highly on the Listing date of a company as it involves various steps such as shareholder’s approval, selecting an investment bank to lead the underwriting process, Filling for DRHP, getting approval from SEBI, etc and it can vary anywhere from 2to 5 years.

No. Our Zero Transaction charges policy prohibits any kind of Transaction charges other than IEPF recovery process, in which specified charges will be applied to regain the shares at the time of initialization.

The shares are bought and sold in NSDL (National Securities Depository Limited) or CDSL (Central Depository Securities Limited) Demat Account Form only. The time to reflect Transactional quantity of Shares in a Demat account is 24-48 Hours, if the executionperiod is exceeded, the Transaction gets cancelled automatically without any losses to either party.

As per Income Tax Act, Unlisted shares can be termed as long-term capital assets if held for more than 2 years else it is short term capital assets. For an Indian investor, Long term capital gain (LTCG) on Unlisted shares is taxable at 20% of LTCG and are given indexation benefit whereas Short term capital gain (STCG) on Unlisted shares is taxable at slab rate applicable as perIndividual Tax bracket.

If the shareholder sells Unlisted shares of a Company that issues an IPO (Initial Public Offering) to offer shares to the public which are then listed on a recognised stock exchange and STT is also paid on the same. The tax treatment on the sale of such shares would be the same as in the case of listed shares.

Following are the documents required:

1) Client Master Copy

2) Copy of PAN card

3) Cancelled Cheque

4) Delivery Instruction Slip

5) Payment Advice

It takes 24-48 hours for the verification of KYC documents.

Following are the documents required:

1) Copy of PAN card

2) Copy of Aadhar card

3) Cancelled Cheque

There is no restriction on transfer of shares before IPO until IPO Cut-off date of allotment of shares in the IPO is finalized (Generally a week before allotment of shares in the IPO).

No third-party payments allowed as we try to maintain the safety and security of our client details.

Yes, an NRI can buy unlisted shares like a domestic investor on a non-repatriable basis. NRI can buy unlisted shares on repatriable basis but it requires reporting to RBI. For further information, please contact us.

Following are the documents required:

1) Copy of PAN card

2) Copy of Aadhar card

3) Cancelled Cheque with the stated name of Authorised person

4) DP client master duly stamped

5) Share certificates

6) Notarized death certificate (If applicable)

FAQs

What is the meaning of unlisted equity share?

What is an IPO of a company?

What is the meaning of Pre-IPO share?

What is Lockin Period (Pre-IPO)?

What is the meaning of Delisted share?

What is the difference between a listed and unlisted company?

Is it safe to deal in Pre-IPO/ESOPs/unlisted/Delisted shares of a company?

What is the process to sell/buy unlisted shares?

What is the minimum amount required to invest in a Pre-IPO/ESOPs/Unlisted shares?

Who sell unlisted shares?

Is the company involved in selling in Pre-IPO/Unlisted/Delisted shares?

In what form Unlisted shares are available for transactions?

What is the time horizon for investing in Pre-IPO or Unlisted shares?

Is there any Brokerage or Commission charges related to a transaction on Pre-IPO, ESOPs, Unlisted or Delisted Shares?

What is the Turn Around Time (TAT) for shares to reflect in Demat account?

What are the tax implications on Profit/Loss from selling Unlisted and Delisted Shares?

What is STT applicability on transaction of Unlisted and Delisted Shares?

What are the KYC documents required to buy/sell unlisted shares?

How long does it take for KYC verification?

What are the KYC documents required to register on the website?

How many days before IPO listing, unlisted shares are transferable in Over the Counter (OTC) Market?

Are Third Party Bank details and Payments acceptable to buy unlisted shares?

Can an NRI deal inPre-IPO/ESOPs/Unlisted/Delisted shares?

What are the documents required for IEPF Recovery?