Simply put, unlisted shares are stocks of companies that are not listed on any stock exchange. Shares, as we know, are units of ownership that entitle the shareholder to a portion of the profits earned by the company and its assets.
What are unlisted shares?
Some public limited companies issue shares that are not tradable on a public stock exchange. As it is generally only a small group of investors privately holding these shares, only limited information will be available on these stocks. There is also limited liquidity that would hamper the buying and selling of these shares. The buyers and sellers will have to take steps to establish contact by themselves, through personal contacts, through online forums, or through brokerage firms that specialize in facilitating the purchase and sale of unlisted shares. Often, this could be time-consuming.
Since regulations for listed shares do not govern these shares, some investors still prefer them despite the risks involved, such as reduced transparency and minimal safeguards.
Top unlisted shares to buy in India
Chennai Super Kings (CSK)
The Indian Premier League is one of the most popular T20 cricket leagues in the cricketing world. The tournament has spawned many franchise cricket teams, of which CSK is one. The privately-owned team’s shares are not listed on stock exchanges and cannot be publicly traded. Chennai Super Kings Cricket Ltd. owns the team.
Elofic Industries
Elofic Industries is one of India’s largest original equipment manufacturing (OEM) companies. It began life as a small unit in Delhi in 1951, manufacturing automobile filters. It evolved into an OEM component exporter even as it catered to automobile manufacturing giants like Maruti Suzuki, Royal Enfield, and Hindustan Motors in the domestic market. The company became a limited company in 1996.
Studds Accessories Ltd.
Studds Accessories started in a small way, in a garage in Faridabad in 1983, manufacturing helmets for two-wheeler riders. It quickly expanded to emerge as one of the world’s largest manufacturers of two-wheeler rider helmets and accessories.
Martin and Harris
Martin and Harris Laboratories Ltd., established in Himachal Pradesh in 1993, develops and manufactures formulations required in advanced healthcare in our country and abroad. The firm’s state-of-the-art research facility helps develop active pharmaceutical ingredients, the building blocks of complex dosage forms, and specialty formulations needed for treating health complications. The company is an investor favorite, though unlisted.
Capital Small Finance Bank
Starting off as the Capital Local Area Bank in the year 2000, the company evolved into India’s first small finance bank in 2016. The Punjab-headquartered bank focused on the rural areas, serving the common man. With an ever-expanding network of branches (presently 168), the bank has made its presence felt across Delhi, Rajasthan, Himachal Pradesh, and Chandigarh.
Since it is no longer a local area bank, it is all set to expand across state frontiers. Its primary focus on the rural scene, addressing the concerns of villagers and their banking needs—savings, agricultural loans, etc.—has helped it connect with its customers well.
Conclusion
Unlisted shares, despite their limitations, do provide investment opportunities to investors willing to face the risks and obstacles not found in the listed shares space. An investor in unlisted shares would face a delay in finding the right buyer or seller at the expected price in the absence of a stock exchange.
FAQs
Is it a good idea to buy unlisted shares?
Yes, it is a good idea to buy unlisted shares, but make an informed decision considering its advantages and disadvantages.
How can I buy NSE unlisted shares?
– Do your homework with diligence. Before deciding which company shares you intend to buy, ask yourself: “Is the company a sound investment proposition?” Review the financial status, the market conditions, and the current scenario.
– Locate a seller. This can be through personal contacts or online forums, and brokerage firms that deal in the sale and purchase of unlisted shares can help.
– Fix a price. Negotiate. Use your bargaining skills.
– Execute the transaction. Effect the transfer of funds and complete the necessary paperwork.
Which unlisted shares are the best?
Unlisted shares with a proven track record and operating in niche market segments would be ideal for investors. We have listed a few companies that meet the requirements in this blog.
Can I sell my unlisted shares?
– Yes. You can sell your unlisted shares. However, bear in mind that you may sometimes have to wait for the right buyer or for someone ready to pay the price you expect.
– You need to locate a buyer either through your contacts or through online forums or brokerage firms specializing in selling and purchasing unlisted shares. Once this is done, fix a price after negotiation. Complete the necessary paperwork after ensuring the money has reached your account.
Which is the best site to buy unlisted shares in India?
Finding the best site to buy unlisted shares in India may require research. Platforms like online stockbrokers, financial advisory firms, or unlisted share marketplaces can help you access these shares.
Is it safe to buy unlisted shares in India?
Buying unlisted shares in India can be risky due to limited regulation and information. Ensure thorough research, verify sellers, and consult experts before investing to mitigate risks.
Is it possible to buy unlisted shares?
Yes, it’s possible to buy unlisted shares, but it can be complex and risky. Seek legal advice and perform due diligence before engaging in such transactions.
How do I buy unlisted shares in NSE?
Buying unlisted shares on the NSE can be challenging as they are not openly traded. Consult with brokers or platforms specializing in unlisted securities for guidance and transactions.
