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FAQ - Frequently Ask Question


Who sells unlisted equity shares?

Seller / source of unlisted shares include

  1. Existing shareholders of the unlisted company
  2. Employees holding ESOPS
  3. Promoters
  4. Private Equity Investors
  5. Some time company through right issue or other modes for expansion of Capital


What is the meaning of unlisted equity share?

Equity shares of a company which are not yet listed on the Stock Exchanges like BSE, NSE, etc. are called unlisted equity shares.


Is the Company involved in selling unlisted shares?

The company may or may not be involved. If the company is looking to raise funds and issuing further paid up capital, it can be involved, otherwise, the company is not involved.


Are the shares being sold in the demat form?


As per SEBI guideline, the shares being sold are in the demat format only. Now, trading of shares in physical format has been disallowed by SEBI, though you may hold them in physical format.


What is the process to sell/buy unlisted shares?

First you need to have a demat account. To open a free demat account click https://unlistedbazaar.com/index.php#9thpage 

Then You need to register on our website www.unlistedbazaar.com followed buy your buy/sell order.


For more details

Click on www.unlistedbazaar.com


Why do investors buy unlisted shares?

Investing in pre-IPO helps the investor:

  1. To participate in the growth of the company
  2. To get high returns
  3. To have an alternate investment / asset class
  4. Get opportunities which otherwise would ONLY be available to big entities like PE Firms etc.

Get in at reasonable valuations


What is the meaning of unlisted company?
An unlisted company means a company whose shares are not available to general public for trading and also not listed to any recognised stock exchanges, like NSE/BSE. An unlisted company can be private limited company or public limited company.


What is the kind of time horizon to see the gains in unlisted shares?

One should at least hold for 3 years to see meaningful returns. To get the ideal returns, one will have to be keep invested in the company till it comes with IPO and keeps growing until it has reached its saturation point. This duration cannot be accurately predicted by almost anyone.

We sugget investment horizon of 3-7 years to reap the benefit of entire growth cycle of a unlisted company.


Do the unlisted shares have any lock-in?

Unlisted share do not have any lockin period. Liquidity is also not available easily. 

However, if the company comes up with an IPO and gets itself listed, then as per SEBI guidelines, all PRE-IPO unlisted shares have a lock-in period of 1 year from the date of listing.


What is the kind of returns one can expect in investing in pre-IPO?

Return on investment in unlisted shares depent upon on

  1. Period of investment
  2. Its management’s execution capabilities
  3. The price at which the investor procures the shares

In equities, nobody can guarantee any kind of returns. However, in past we have seen the reurn in unlisted shares even more than 50% CAGR, but there is no guarantee of repating the same again.


What are the kinds of risks involved in investing in unlisted shares?

The normal risks associated with investing in unlisted securities are such as size and other requirements for companies are reduced / eliminated. Some unlisted companies may have highly risky business plans, may be undercapitalized and nothing more than an idea without a plan for success.

Risk of buying unlisted shares on the hope to cash out on IPO is that the IPO may not happen anytime soon. There is no guarantee about the IPO. Also there is no assurance that you would get an exit before IPO comes. “Come with a mindset to hold your investments for five years. If IPO is announced then you get an exit. Also you can sell your shares one year after listing.

To know more about the risks, please go through our website showing article on the mistakes to avoid while investing in unlisted shares. Please click here to view the same https://unlistedbazaar.com/blogdetail.php?blogid=MzI=


What are the tax implications of investing in unlisted shares?

Profit generated on sale of unlisted shares is accounted as capital gains. Unlisted shares held for less than 24 months qualify under short-term capital gains (STCG) tax. If the shares are held more than 24 months, then they are accounted under long term capital gains (LTCG) tax. If the stocks have been held for long-term, then investors can benefit from indexation benefits also.

To know more about the tax implications and regulatory hurdles, please go through our website showing article on regulations for unlisted shares o. Please click here to view the same https://unlistedbazaar.com/blogdetail.php?blogid=MzU=.


What is our role and what support do we provide?

We help us any investor for

  1. We support for Free / Negligible cost demat account opening and facilitating. For opening Demat account click on https://unlistedbazaar.com/index.php#9thpage
  2. We support for the free dashboard for unlisted shares with us. For this click on https://unlistedbazaar.com/userlogin.php#firstPage
  3. We give a list of available unlisted stcock for trading
  4. We may also arrange to buy / sell a unlisted stcok of your choice
  5. We also support you for making better decision by fundamental research

Please click our website www.unlistedbazaar.com to know more about us and our services.


What is the procedure to buy other seller stocks?

To buy/sell unlisted shares 

First you need to have a demat account. To open a free demat account click https://unlistedbazaar.com/index.php#9thpage 

Then You need to register on our website www.unlistedbazaar.com followed buy your buy/sell order.


For more details

Click on www.unlistedbazaar.com


How will I know that my request for selling shares has been approved?

You will be informed through mail and call


Can we purchase share without registration?

No, you have to register for the purchase of the share on our site.

For registration click on https://unlistedbazaar.com/userlogin.php#firstPage 


What is lot size?

Lot size is quantum / bundel of stock, investor need to buy in a bunch. It is always a absoulte number. It differs for stock to stock. 

For more details, please click on https://unlistedbazaar.com/unlisted-shares.php


Examples of unlisted shares, which has been listed in past...

Successful listings

  1. Ujjivan Small Finance
  2. CSB Bank
  3. IRCTC
  4. Embassy Office
  5. RITES
  6. Bandhan Bank
  7. RBL Bank
  8. HDFC Life
  9. SBI Life
  10. ICICI Lombard
  11. CDSL - Central Depository Services Limited
  12. JustDial
  13. Care Ratings
  14. And many more names......


How unlisted shares are valued ?
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Name some unlisted company...

Some of the shares of unlisted companies

  1. HDB Financial
  2. Hero Fincorp
  3. ANI Technologies (OLA)
  4. SBI Cards
  5. One97 Communications (Paytm)
  6. Barbeque Nation
  7. Tamilnad Mercantile Bank
  8. And many more...... click here to see list https://unlistedbazaar.com/unlisted-shares.php


What are the difference between Unlisted and listed shares ?

Get it from unlisted junction...


How are unlisted securities traded ?

An unlisted security is a financial instrument that is not traded on a formal exchange. 

Market makers or dealers, facilitate the buying and selling of unlisted securities on the OTC market. 

To buy and sell unlisted share, please visit our site www.unlitedbazaar.com or

click on 

To buy https://unlistedbazaar.com/buy-unlisted-shares.php 

To sell https://unlistedbazaar.com/sell-unlisted-shares.php


What happens to my shares if the company is delisted ?

When a company is delisted, its stock no longer trades on one of the major stock exchanges. Though as per regulatory requirment, before delisting company gives public notice to the investor for buy back of the shares.

In a direct sense, nothing happens to a shareholder when delisting occurs. The shareholder still owns the same percentage of the company as before, and he is free to sell the shares to any willing buyer. 

Major effect come in the form of liquidity crunch, but investor can sell it in OTC market, in similar way to unlisted shares.



Who is eligible to buy unlisted shares. ?

Any one, who is allowed to trade in Indian Stock market as per SEBI guidelines, can buy and hold unlisted shares.

This includes 

  1. Individuals
  2. HUFs
  3. Corporates 
  4. Body Corporates
  5. Trust, if allowed by their trunt deed
  6. Society, if allowed by their bye laws



Whom shall we contact for any queries? Method of contacting.?

You may contact us by click on contact us tab https://unlistedbazaar.com/contactus.php


You may contact us, by

  1. Leave your details for us to contact you
  2. You may also call us at the number given on contact us pages
  3. You may also write us at the mail I'ds given on contact us pages


What are the benefits of a Demat account ?

Benefits of Demat Account:

Demat accounts facilitates the investor to hold securities in an electronic form. Demat account helps to hold not only shares and stocks but other products like Mutual Funds, Insurance, Bonds, NCDs etc, conveniently at one place in safe and secure way. It avoids the need of any sort of paperwork every time. For investing in stock markets, it is the main requirement to have a Demat account.

In India, there are two depositories who manage Demat account

  • National Securities Depository Ltd (NSDL) >>> https://nsdl.co.in
  • Central Depository Services Ltd (CDSL) >>> https://www.cdslindia.com

A Demat account works in the like a bank account for shares and other investments. It is Zero balance account, so it is not compulsory for an investor maintain security in it. The charges of Demat account depends on company to company and also on required facilities along with the terms and conditions laid by the depository and the stockbroker company. In India, there is no restriction to have multiple Demat account by one individual and entity, so one may have more than one account as per his/her/their requirement.

To know the procedure on how to open Demat account along with the documents required for it, click here...

To have a free Demat account, click here...


Can I have multiple Demat accounts?


As per SEBI, there is no restriction on having multiple number of accounts. So, one can have multiple Demat accounts as per his/her requirement.


What is an ISIN number?

ISIN (International Securities Identification Number) is a unique 12 digit alpha-numeric identification number allotted to each security. e.g. INE214T01019

Fully paid-up equity shares, partly paid-up shares, equity with differential voting/ dividend rights issued by the same issuer will have different ISINs.


How can I demat my shares?

To convert your physical certificates into Demat format, you should approach the DP and submit a Dematerialization Request Form (DRF) along with the physical certificates by marking 'Surrendered for Dematerialisation'.

Alog with DRF, you may also required to submit 

  • Client Master Copy
  • Proof of Signature
  • Copy of PAN Card

Separate DRF has to be filled for each ISIN.


What are the services provided by a Depository?

Following services are provided by a depository to the beneficial owners (BO) through a depository participant:

  1. Dematerialization, i.e. converting physical securities into Demat form
  2. Rematerialization, i.e. converting electronic securities into physical form
  3. Opening a demat account and Maintaining record of securities 
  4. Settlement of trades by delivery / receipt of securities from / in BO accounts
  5. Pledging of dematerialized securities
  6. Freezing of the demat account for debits/credits or both
  7. Receiving electronic credit in respect of securities on behalf of demat account holders
  8. Receiving non cash corporate benefits such as allotment of bonus and rights shares or any other non cash corporate benefits on behalf of demat account holders


What are the benefits of having Demat Account ?






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Checking Adding a quesion
Unlisted Shares are the shares of Companies which are not Listed on any Stock Exchange, hence it is not traded publicly. Shareholders of such companies are deprived of the privileges which are enjoyed by the shareholders of companies which are Listed on Stock Exchanges.







Main aspects that an investor is willing to know and should know about the unlisted share are valuations, future growth prospect, taxation and liquidity. We are trying to cover the above points.

SEBI Guidelines for Valuation of Unlisted Shares: SEBI Circular No. MFD/CIR/03/526/2002 dated May 9, 2002 has prescribed the method of valuation for unlisted equity securities. These guidelines are similar to the guidelines issued by SEBI for non traded / thinly traded securities mentioned above only except the following:

Computation of Net worth per share as lower of (a) and (b):

(A)          i) Net worth of the company = Paid up share capital + Reserves other than Revaluation reserve - Miscellaneous expenditure not written off or deferred revenue expenditure, intangible assets and accumulated losses.

ii) Net worth per share = (Net worth of the company / Number of paid up shares).

(B)          i) Net worth of the company = Paid up capital + Consideration on exercise of Option/Warrants received/receivable by the company + free reserves other than Revaluation reserve - Miscellaneous expenditure not written off or deferred revenue expenditure, intangible assets and accumulated losses.

ii) Net worth per share = (Net worth of the company/ {Number of paid-up shares + number of shares that would be obtained on conversion/exercise of outstanding warrants and options}).

If the net worth of the company is negative, the share should be marked down to Zero.

(C)          Average capitalization rate (P E ratio) for the industry based upon either BSE or NSE data shall be taken and discounted by 75% i.e. only 25% of industry average P /E shall be taken as capitalization rate (P/E ratio). Earnings per share of the latest audited annual accounts shall be considered for this purpose.

(D)          Computation of fair value per share to be considered for valuation at 15 % discount for illiquidity.

[(Net worth per share + Capitalized value of EPS) / 2] * 0.85

In case the latest balance sheet i.e. balance sheet prepared within nine months from the close of the accounting year of the company, is not available (unless the accounting year is changed) the shares should be valued as zero.

Taxation on Capital Gain / Profits: Profit generated on sale of unlisted shares is accounted as capital gains. Unlisted shares held for less than 24 months qualify under short-term capital gains (STCG) tax and if the shares are held more than 24 months, then they are accounted under long term capital gains (LTCG) tax. If the stocks have been held for long-term, then investors can benefit from indexation benefits also.

Calculation of Capital Gain: When an investor of an unlisted share transfers the shares to any other person, he is required to pay Capital Gain tax on the difference between the sale consideration received by him and the cost of acquisition of such shares (or the inflation indexed cost, as applicable), as per Section 50CA. It is critical to check if the consideration amount that the investor received from the buyer is at least equal to or more than the “Fair Market Value” (“FMV”) as defined under Rule 11UA of The Income Tax Rules, of the unlisted shares sought to be transferred. If the investor receives sale consideration on sale/transfer of unquoted equity shares which is less than the FMV of such shares, the FMV of such shares shall be deemed to be the consideration received on such transfer of shares. Therefore, while computing the Capital Gains on transfer of unlisted shares, FMV of share will replace the actual sale consideration on transfer of such unquoted shares. The investor selling the shares, in such case, will have to pay Capital Gain tax on difference between FMV of the shares and cost price (or the inflation indexed cost price, as per the case) of such shares. As per Section 56(2), if the buyer investor acquires unlisted equity shares from a seller which is less than the FMV of such shares, the difference between the FMV of the shares and actual price paid by the buyer (if it exceeds Rs. 50,000/-) will be taxable in the hands of the buyer of unquoted shares under the head of “Income from Other Sources”. Please note here that both these rules are applicable only when the seller or the buyer, in respective cases, holds the shares as Capital Assets (Investment). This is not applicable when the shares are held as Stock in Trade.

Lock-in period: Investors who have purchased unlisted shares usually have a lock-in period of 1 year after the shares are listed in Initial Public Offering (IPO) on a stock exchange. However, before listing there is usually no lock-in period.

For more details or queries, please get in touch with us on info@unlistedbazzar.com.

Information Sources: 


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