Buying Unlisted Shares of Pre IPO Companies - ICICIdirect (2024)

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Buying Unlisted Shares of Pre IPO Companies - ICICIdirect (2024)

FAQs

How do I buy unlisted shares pre-IPO? ›

You can invest in the top unlisted companies in India by investing in start-ups and intermediaries, buying ESOPs directly from employees or promoters, or investing in PMS and AIF schemes that pick up unlisted shares. The risks include illiquidity, capital loss, risk of no dividends, and risk of dilution.

Can I buy unlisted shares through Icici direct? ›

You can invest in a private company even before its initial public offer (IPO) by buying its unlisted shares. One of the main reasons investors buy these shares is for the expected gains. Companies sell these shares at a discounted price to tempt investors to buy a significant stake of their unlisted shares.

Can I buy shares of unlisted companies? ›

They can be bought and sold over-the-counter and are known as OTC (over-the-counter securities). While investing in listed companies is regulated by SEBI (Securities and Exchange Board of India), trading in unlisted shares is unregulated and therefore involves higher risks.

Are pre-IPO shares the same as unlisted shares? ›

These shares are often owned by the company's founders, early investors, and employees. Unlisted shares are typically bought and sold in private transactions between investors. Pre-IPO shares, on the other hand, are shares of a company that will soon become publicly traded through an Initial Public Offering (IPO).

How do I buy shares of a company pre-IPO? ›

You can buy pre-IPO stocks by using a specialized broker (like TradeStation), buying equity directly from the company, or by investing indirectly via companies that own the pre-IPO stock.

What is the process of buying unlisted shares? ›

Buying directly from promoters

Suppose you want to buy a significant stake in an unlisted company. In that case, you can approach an investment bank, wealth manager, or a trusted broker who can help you buy directly from the company's promoters through private placement.

What is the minimum amount to buy unlisted shares? ›

An investor has to open a Demat account to buy unlisted equity shares. The minimum value to invest in unlisted shares of any firm is Fifty thousand Rupees.

How do I demat shares of unlisted companies? ›

Rules Relating to Depository

The company should create a security deposit at the time of applying for dematerialisation. The amount of deposit should be twice the fees paid to the depository and share transfer agent. The duration for which the deposit is maintained should be as per the agreement with the depository.

Can I purchase shares of unlisted companies in India? ›

The Process to Buy Unlisted Shares

You need to transfer the trade amount to our bank account and within 24 hours, you will get those shares in your NSDL or CDSL account (depending upon your broker). If you're having a CDSL account then the shares will be visible to Myeasi CDSL Android app or NSDL Android App.

What are the disadvantages of buying unlisted shares? ›

Lack Of Liquidity

The first and foremost downside to buy unlisted shares is they are not the best way to avail emergency cash. Since the best unlisted shares to invest in do not trade on the exchange market, they are comparatively harder to buy & sell and need more time to be liquidated.

Is it safe to invest in pre-IPO? ›

Low-risk Investment

This also means you will receive higher returns than post-IPO stocks. However, there is also a risk of failure when it comes to the stock market. But these risks are lower for pre-IPO stocks.

What is the lock in period for unlisted shares? ›

Can you sell Pre-IPO shares immediately? No, the Pre-IPO shares have a lock-in period of six months. It means you can't sell stocks before six months from the date of listing.

Can I sell my pre-IPO shares? ›

So you might be wondering: Can I sell my pre-IPO shares and get some cash instead? The short answer is yes. There are secondary markets where you can list and sell your private shares— if someone wants to buy them.

What happens when you invest in a company pre-IPO? ›

Key Takeaways

A pre-IPO placement is a sale of large blocks of stock in a company in advance of its listing on a public exchange. The purchaser gets the shares at a discount from the IPO price. For the company, the placement is a way to raise funds and offset the risk that the IPO will not be as successful as hoped.

What happens to pre-IPO stock in an acquisition? ›

It depends on the circ*mstances. If an acquisition happens, the shareholder may receive stock in the new company, their preferred shares may convert to common shares, or they may receive a cash payment.

Can individuals buy pre-IPO stock? ›

Individuals buying pre-IPO shares as part of a friends and family round during the early days of a startup. These often involve accredited investors, but there can be some exceptions that allow some unaccredited individual investors to take part.

Which is the best website to buy unlisted shares? ›

Stockify is a leading company facilitating quick and fully compliant buying and selling of unlisted shares in India. Along with unlisted shares, you can also. At Stockify, you will get an unbiased and in-depth analysis of almost all major unlisted shares in the industry.

Where can I find pre-IPO stock? ›

At wwipl.com, we provide a comprehensive list of Pre-IPO shares available in India, including information on the company, sector, valuation, and investment amount.

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