The stock market is a space where hundreds of stocks are on exchange for trading regularly. The profit of companies is directly proportional to the rate at which they are traded on the stock exchange. On the contrary, there is another huge parallel market of unlisted shares that entices large-scale investors. Unlisted shares are hidden gems of the market that are yet to go public.
There is a high probability of unlisted shares yield more profit when listed on the stock exchange. Unlisted shares of top companies like Jio and Ola are already booming on the unlisted share price list. The transaction of these shares is executed over-the-counter and may carry a credit risk.
What should you know before investing in unlisted shares?
- Investment process
Unlike listed shares, you cannot buy unlisted shares that easily. The investment process is a bit time-consuming and the delivery of the same is not guaranteed. For a new-age investor, it is crucial to stock up the modality of the market.
- Unlisted shareholders
The employees having ESOPs in a company, trade capitalists, brokers, large investors, and start-ups own unlisted shares. You should know the chain of stakeholders to get the right share.
- Liquid funds
Investment in unlisted shares is done with a 3rd party involvement and the process delays the funds’ flow. So, if an investor wants to redeem his funds from unlisted shares, there are possibilities that you won’t find it liquid.
- Prime risk
Unlisted shares are unpredictable. The investors invest in these shares based on the anchoring companies who partner with unlisted companies. They tend to invest in start-ups with innovative ideas that have a potential to grow eventually. As these new companies are in the developmental stages, it’s not defined whether they’ll sink or swim. And, this can bring considerable risks to the potential unlisted shares.
- Valuation of the shares
The investors and promoters of the company evaluate a price for the unlisted shares. They do not carry a market value regardless of recognized marks among the traders. The valuation of unlisted shares is conceptualized based on the fair value which may not be very satiating for investors and may prove to be risky.
The profit of the unlisted shares depends on the companies that show significant growth. The trading execution process is not direct here and the financial status of the companies is confined and does not have any transparency, thus the unlisted shares can implicate your finance.
- Tax fluctuation
The tax returns vary with the amount and term of the investment. Tax slab rates for unlisted shares are different. The investment in unlisted shares for 2 years or more and selling them after this period then you will be taxed 20% on your returns. If you sell your shares before the term completion, then you will be applicable for short-term capital gain.
Unlisted Assets – Buy sell unlisted shares
From the prodigious list of unlisted shares, Unlisted Assets help you to examine the market reports and get the best deals to buy and sell unlisted shares of the companies and get their securities. Invest your time today and gain profit tomorrow.