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Unlisted Stocks
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Heard about listed stocks in the share market, but have you ever wondered what are unlisted stocks?
For all those who are new in the stock market world, it is inevitable that you must be having a lot of questions.
When it comes to investment, there are various companies that have listed their stocks in the exchange like NSE or BSE thus bringing it publicly for investors.
Such stocks are commonly known as listed stocks, but what about the stocks that are not listed on the stock exchange. Can you trade in such stocks?
The answer to this is YES. You can even trade in the stocks that are not officially listed in the stock market. The stocks that are not familiar with the IPO (Initial Public Offering) process are known as the unlisted stocks.
To understand what is unlisted stock, let us consider a company ‘X.’ ‘X’ is a new and a small business and is not officially associated with the Bombay Stock Exchange (BSE). This means that X is an unlisted stock.
You can trade in the stocks of X as it is a new company, and it will be highly active when it comes to innovations and experimentations.
Some very famous examples of unlisted stocks are Oyo and Ola. These companies are not registered with the official stock exchange platforms but are open to trading.
As an investor, if you are eager to help, support, and invest in new-age companies and businesses, unlisted stocks are the best option for you.
Now that we have a better understanding of the unlimited stocks meaning, let us dive into other aspects.
Now that we know that the unlisted stocks are the stocks of the companies that are officially not enrolled with any stock exchange say it BSE or NSE.
The trading of unlisted stocks and shares does not happen publicly. The unlisted stock shareholders do not have access to the same privileges as that of listed stocks.
That is why it is advisable to know Listed vs Unlisted Stocks and make your decisions accordingly.
There is always a probability that the unlisted stocks might enter the listed stocks’ competition in the future.
There are different types of companies included in the category of unlisted stocks. Let us have a quick look at these types.
- Many known companies have subsidiaries. These subsidiaries are part of the parent company and are often categorized as unlisted stocks.
For example, Reliance is a very well known company. It further has a subsidiary called Reliance Jio. Reliance Jio is an unlisted share and is a very prominent part of a known parent company.
- Another type of unlisted company is the new-age one. It can be one involved in finance, communication, or any other field.
Here, we can take examples of OYO and Dream 11.
Investing in unlisted stocks happens according to the type of company. If you are looking to invest in an unlisted stock, whether of a new business or a known one, this article will answer all your queries.
How to Invest in Unlisted Stocks?
Are you also interested in investing in unlisted stocks? Then, many ways can help you accelerate this thought forward. Let us discuss some ways in which you can invest in unlisted stocks to make significant profits.
- Start with Start-ups
There are various startups in the category of unlisted stocks. You can start by endorsing or investing in the stocks of the start-ups.
The start-ups and small companies do not guarantee the sale of the share. The company, in this case, usually demands money to be paid quickly and upfront.
The delivery is done only after three days from the trading day. This generally is called T+3 delivery.
- Buying from Employees
Another way to buy unlisted stocks is to buy them from the existing employees under the employee stock ownership plan.
A lot of companies allow their employees to invest in shares in the company. This is eligible for some predetermined stocks and over a decided period. A broker can help you in finding the right unlisted stocks for you.
- Promoters
If you are investing in unlisted stocks, you can also buy directly from the promoters. Many investment banks and Private Placement can render help in purchasing private or unlisted stocks.
You can consider these ways if you are thinking of buying or investing in an unlisted stock. Though a cumbersome process, it can yield good results if you do it correctly.
How to Buy Unlisted Stocks?
While reading about the unlisted stocks, it is sure that you might have thought about how to buy unlisted stocks in India?
There are various concerns and theories associated with the purchase of unlisted stocks. Some argue that it is dangerous to invest in unlisted stocks, but is it right or, on the contrary, is it profitable?
There are various cases or say scams, in which people have suffered huge losses. You must choose the right stock and the right broker if you want to be away from unwanted happenings or huge losses.
There has been a lot of competition in recent years to attain an IPO and get listed on the official stock exchange.
The growing competition has dragged even big companies to have some unlisted stocks. It is often safe to invest in unlisted stocks of known companies.
These are also often termed as pre-IPO stocks, the reason being the possibility that they can be listed in the official stock exchange shortly.
It is often difficult to find an apt seller for the unlisted stocks, so it is advisable to invest in it only if you have a genuine interest in the company.
Various platforms give an insight into the unlisted stock price and other details to make trading easier and quicker for you.
Also, before buying the stock from the unlisted category, make sure to consult the right person, and invest in the right stock.
Unlisted Stock Price
Another question that often pops in mind is what is unlisted stock price and how to find it? Traders and investors often find it challenging to find and predict the prices of unlisted stocks.
There are different platforms available to make the work easier for investors. The various sources can predict the prices and success of the unlisted stocks in the market.
Various apps like unlisted stocks zones are available to make the work easier.
There are various reasons why there is a need to track the unlisted stocks’ movement and prices.
- It can help the investors make the right judgment about when to enter and exit the stock. This further increases the chances of benefits and significant profits.
- There is a lack of liquidity that hampers the stock movement and differentiates it from the listed stocks. It is, therefore, essential to track the prices of the stocks.
Therefore, it is evident that tracking the unlisted stocks’ prices is essential for making the best out of every stock that is not listed on the official stock exchange.
Conclusion
What is unlisted stock and how to buy unlisted stocks is a question that often pops up in investors’ minds.
Hope you would be able to understand the concept and learn how you can generate income by trading in the stock not listed in the major stock exchanges of the country.
Various significant companies have subsidiaries that work as unlisted stocks. The unlisted stocks are the pre-IPO version of stocks. There is always a possibility that these stocks will gain the status of listed stocks in the future.
There are various ways in which you can carry forward the thought of buying an unlisted stock. You can rely on the employees of your own company or even take the help of the promoters.
Various applications make the work of tracking the movement of unlisted stocks easier. This increases the chances of profits, and the investor can be at a beneficial end.
So, you can easily buy the unlisted stocks, though it sometimes gets challenging to find a seller. Unlisted stocks can be great to invest in if you have your faith in the company. You can track the movement, judge the profits, and then invest in the unlisted stocks.
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