The Ultimate Guide to Unlisted Shares: What You Need to Know
Discovering Unlisted Shares
You know I’m going to have an experience of a lifetime right now! Oh, what are your plans? See, I’m going to go through this Indigo flight to the Himalayas. Listen, listen! Then I booked this hotel—Oberoi and then Trident. Oh, huh! Then I’m going to take an aerial SIM card because the range for other network operators is just okay. Finally, I’ll be looking at the Himalayas and using a boat head. I’m just going to chill!
Understanding Unlisted Shares
Hey folks, C here! I welcome you all to a very interesting discussion about unlisted shares, also known as off-market shares. You might be wondering, with over 5,000 companies listed on the stock exchange, why even talk about companies that are not listed, right?
What Are Unlisted Shares?
Let’s get started with the basics. Unlisted shares are equities or financial instruments that are not listed on any recognized stock exchange, such as BSE or NSE. They are also referred to as OTC shares (over-the-counter shares).
Here are a few examples:
- Swiggy
- Boat
- OYO
- Cochin International Airport
- HDB Financial Services
- CSK (Chennai Super Kings)
Remember, these are just examples—none are stock recommendations!
Why Invest in Unlisted Shares?
Many customers become emotionally attached to the companies they use, wanting to become investors or owners. Previously, only HNIs or big-ticket investors could invest in unlisted shares, but now even retail investors can participate through platforms like Incred Money.
Key Benefits
- Access to Niche Sectors: Unlisted shares offer investment opportunities in niche sectors not available in the listed space.
- Growth Potential: Investing in companies in their growth phase can lead to significant returns.
- Long-Term Investment: If you’re looking to invest in a company for the long haul, unlisted shares can be a good option before they go public.
Points to Consider Before Investing
Risks Involved
- Uncertainty of Listing: There’s always the risk that the company may never get listed.
- Lock-in Period: Even if the company gets listed, there’s typically a lock-in period of six months.
- Fundamental Analysis: Always check the fundamentals of the companies you’re interested in.
Lack of Information
- Transparency Issues: Unlisted companies aren’t required to disclose financials quarterly, leading to a lack of information.
- Limited Analyst Coverage: Unlike listed companies, unlisted firms generally don’t have extensive analyst coverage.
Tax Implications
Comparing Taxation
- Holding Period:
- Listed: 12 months
- Unlisted: 24 months
- Short-term Capital Gains:
- Listed: 20%
- Unlisted: Taxed according to your slab rate.
- Long-term Capital Gains:
- Listed: Revised to 12.5%
- Unlisted: Currently at 20%.
Getting Started with Unlisted Shares
If you’ve decided to invest in unlisted shares, you might be wondering where to find data and how to get started.
Exploring Incred Money
Visit the Incred Money website to check out current offerings. For example, if you want to learn more about CSK, you can access fundamentals like P/E ratio, market capitalization, and more.
Research and Investment
On their platform, you’ll find documents such as annual reports and financial statements, helping you make an informed decision.
Conclusion
Now that you understand the concept of unlisted shares and the factors to consider before investing, you’re better equipped to make a decision. If you still have questions, please ask in the comments below.
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