Wealth  Management  Services

Unlisted Shares

Let us understand the new buzz of the stock market town and whether it is a suitable investment category for Retail Investors - ‘Unlisted Equity Shares’.
Invest in Unlisted SHares

Why invest in Unlisted Shares 

▶ So, what is an Unlisted Share?

Equity shares of a company which are not yet listed on any of the Stock Exchanges like Bombay Stock Exchange, National Stock Exchange etc. are called unlisted equity shares. These shares can be both in Physical or Demat form but in the recent years most companies have got their shares converted into Demat.

▶ Ok, that seems simple. But how do these shares come in the secondary market if they haven’t been listed?

Existing shareholders of the unlisted company can sell unlisted equity shares. These can include ESOPs of Ex-Employees or Current employees and even the shares held by CEO, Promoters, Private Equity investors etc.

▶ Is the Company involved in selling unlisted shares?

The company may or may not be involved. If the company is looking to raise funds and issuing further paid-up capital, it can be involved, otherwise, the company would not be involved.

▶ Why should you as an investor buy unlisted shares?

Investing in pre-IPO helps the investor:

  1. To participate in the growth of the company well before others.
  2. Get investment opportunities which otherwise would ONLY be available to big entities like PE Firms, HNIs etc.
  3. Get in at reasonable/justified valuations.

▶ What is the kind of time horizon to see the gains in unlisted shares?

To get the optimal returns, one will have to be invested in the company until it comes with IPO and keeps growing until it has reached its saturation point. This duration cannot be accurately predicted by almost anyone. Having said that, in our experience one should be looking to at least hold for 3 years to see meaningful returns.

▶ Do the unlisted shares have any lock-in?

There are no specific restrictions on the sale of unlisted shares. However, as per SEBI rules if the company comes up with an IPO and gets itself listed, then all unlisted shares have a lock-in period of 6 months from the date of listing. Hence, unlisted shares bought in the Pre-IPO period cannot be sold for 6 months after its listing. Say, Miss Hrishvi buys 10,000 shares of AU Small Finance on 20th July 2016 and it got listed on the exchange on 10th Jan 2018. Now she can sell those shares only after 10th Jan 2018.

▶ What are the kinds of risks involved in investing in Unlisted Shares?

Basically, it encompasses the following two additional risks when compared to Listed Shares:

  1. Timeline Risk-The Company takes longer than expected to get listed.
  2. Liquidity Risk-Unlisted shares are inherently illiquid, and although various players in this segment have made it a fairly liquid market, it is still far behind the regular Stock Exchange where your trades get executed in seconds.

▶ What is the minimum amount one can invest in a Pre-IPO?

Depending on the Script, investment can be made with a nominal amount of as low as ₹50,000/-

▶ How are these Unlisted Shares priced? What is the basis?

Just like in share markets, share valuation is done based on quantitative techniques and share value will vary depending on the market demand and supply.

▶ What is a CML (Client Master List) or CMR (Client Master Report)?

Client Master List also known as Client Master Report contains DP ID, Client ID, PAN, Linked Bank Account with Demat etc. This can be easily obtained within 4-5 hours by sending an email to your DP requesting a soft copy of the same. CML/CMR copy is a pre-requisite to be able to buy/sell Unlisted Shares.

▶ What is the role of Richfield Fintech?

Richfield Fintech plays the role of a market maker. It buys from those who wish to sell and sells to those who wish to buy.

Buy-Sell Process for Unlisted Shares


  1. The Buyer confirms the quantity and price.
  2. He/she provides CML Copy containing Demat account details along-with Pan Card copy and we provide our bank account details.
  3. On Trade Settlement Date, the Buyer transfers the purchase amount via NEFT/RTGS/IMPS. On receipt of payment, we transfer the shares to his/her Demat account within 24hrs and issue a receipt and transfer memo.


  1. We confirm the quantity and price.
  2. We provide you with our CML Copy containing Demat account details and would require your bank account details along-with your pan card copy, cancelled cheque and a scanned copy of Signed DIS Slip using which you will transfer shares to our Demat Account.
  3. On Trade Settlement Date, after receipt of payment, we will transfer the deal amount via NEFT/RTGS/IMPS within 24 hrs and issue a receipt along-with email confirmation.


P.S. Additional Pointers for NRIs

NRI Buyer

  1. Funds must come from NRO A/C.
  2. Delivery will go to NRI NON-REPATRIABLE DEMAT. Please share copy of Client Master List, Pan Card, Cancelled Cheque & get APPROVAL from us before making payment.

NRI Seller

  1. Shares must be transferred from NRI NON REPATRIABLE DEMAT. We will transfer funds to NRO A/C.

Please share copy of Client Master List, Pan Card, Cancelled Cheque and get APPROVAL from us before transferring the shares.

Unlisted Shares - Taxation

STCG (<2 Years) on sale of unlisted equity shares (Pre-IPO) is taxable at applicable marginal tax rate.

LTCG (>2 Years) on sale of unlisted equity shares (Pre-IPO) is taxable at 20% with indexation.

LTCG (>1 Year) on sale of unlisted equity shares (Post-IPO) i.e. now Listed Shares is Taxable at 10% (If the gains in a Financial Year Exceed Rs. 1 Lakh).

For trading of Pre-IPO shares, you do not have to pay GST or STT (Securities Transaction Tax).

Historical Performance of Unlisted Shares

AU Small Finance Bank
₹ 175
Oct, 2016 (After Share Split)
₹ 525
Jul 27, 2017 (Listing Price)
₹ 1,218
Mar 02, 2020
₹ 38
₹ 65
Jan 31, 2019
Jun 30, 2020
Reliance Retail
₹ 545
₹ 3,600
Jan 31, 2019
Oct 21, 2021
National Stock Exchange (NSE)
₹ 900
Jun 06, 2019
₹ 3,500
Oct 21, 2021

Buy Hot Unlisted Shares!

No.NameSectorISDNSpecial Comment
1.Barbeque Nation HospitalityRestaurantINE382M01027Rakesh Jhunjhunwala holds a large stake.
2.Chennai Super Kings Cricket (CSK)Franchise Cricket teamINE852S01026Most profitable IPL team.
3.HDB Financial ServicesNBFCINE756I01012HDFC Bank subsidary.
4.HDFC SecuritiesStock BrokerINE700G01014HDFC Limited subsidary.
5.Hero FincorpNBFCINE957N01016Hero Group company.
6.National Stock Exchange (NSE)Stock ExchangeINE721I01024World's leading stock exchange.
7.One97 Communications (PayTM)E-CommerceINE982J01012Unicorn Fintech Start-up from India.
8.Reliance RetailRetailINE742O01010RIL group company.
9.Reliagare Health InsuranceHealth InsuranceINE119J01011One of the top health insurance companies in India.
10.Studds AccessoriesHelmet MakerINE00Q601028World's largest helmet manufacture.
11.Tamil Mercantile Bank (TMB)Private BankINE668A01016Highly profitable private bank.
12.Tata TechnologiesTechnologyINE142M01017Tata Group company.
13.Tata CapitalFinanceINE976I01016Tata Group company.
14.Tata SonsHolding CoINE895D08527Tata Group company.
15.Philips IndiaElectronicsINE319A01016Global pioneers of consumer electronics.
16.FlipkartE-CommerceINE075T01014E-commerce giant - Walmart owned.
17.HDFC Ergo General InsuranceInsuranceINE392I01016HDFC Group Company.
18.Anand Rathi Wealth ServicesFinancialINE463V01026One of the top brokerage houses in India.

Invest in Unlisted Shares with Richfield

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