Unseen by the public, a far larger stock market regularly trades under the surface of the official stock exchanges. On this exchange, unlisted shares are traded. You will discover all there is to know about Unlisted Shares, which are traded on the Over-the-Counter (OTC) market, in this article. Know more about platform to invest in unlisted companies
A conventional broker cannot be used to acquire unlisted shares or stocks. JIO and OLA, for instance, both hold unlisted shares. Similar to this, a lot of companies have not yet gone public because they do not fulfil the requirements to be listed on a major stock exchange. Learn how to sell unlisted shares.
Because of the listed stock’s increased liquidity, it is more risky than the unlisted stock. Although they are less transparent, they frequently have more stable costs. If you choose an unlisted share that has a good chance of being listed and the firm has room to develop, you stand to make substantial profits.
Are unlisted stocks real?
Over-the-counter (OTC) trading occurs between unlisted stock buyers and sellers without the use of a central trading facility. Trading in unlisted shares has a higher credit risk since this market is not regulated or controlled. Nonetheless, unlisted shares are often traded among corporations, large brokerage firms, and high-net-worth individuals (HNIs) or institutional customers. In this way, the risks associated with unlisted shares might be reduced based on the reputations of the market participants. Using an appropriate intermediary when dealing in unlisted shares might help reduce the associated risk.
The main risk, however, lies in the investment choice you make: whether or not the unlisted company whose shares you are buying will go public, whether or not the price of the shares will increase, and whether or not the company will fail from a lack of demand. You must conduct in-depth study on the company’s fundamentals and other factors before purchasing any unlisted shares.
What Investors Should Know About Delisted Stocks
Unlisted stock and delisted stock are distinct. These two stock types are significantly dissimilar to one another. Unlisted shares are those that have not yet been listed on stock exchanges, whereas delisted shares are those that were once included in the category of listed shares but have since been eliminated.
Delisted shares, however, are no longer accessible for investment or trading on OTC exchanges. Delisted shares are no longer available for trading on any exchange. The shares of a firm are unlisted if it has no plans to make an initial public offering (IPO) or if it does not meet SEBI’s requirements for listing them on any stock market (such the NSE or BSE). When a firm’s stock is delisted, it’s because the management team decided to delist the company or because the company did not follow the disclosure criteria set out by SEBI and stock exchanges.
Value of Privately Held Stock
Unlisted shares are valued using the same FMV framework as publicly traded stocks. Unlisted shares have no established market price since they are not traded publicly; thus, their fair market value must be determined by the underwriters or the investment bankers.
