How to Buy Unlisted Shares – Beginner-Friendly Complete Guide

Self with How to Buy Unlisted Shares – Beginner-Friendly Complete Guide | Newsglo

nse share price unlisted
How to Buy Unlisted Shares: A Complete Beginner-Friendly Guide

Buying unlisted shares sounds exciting, right? But for most people, it also feels confusing—like entering a shop without price tags. You know the items are valuable, but you’re unsure how to buy them or whether they’re even real.

That’s exactly why I created this guide.

In this 3000-word, easy-to-understand article, you’ll learn how to buy unlisted shares, where to find them, what risks you must avoid, and how Online Stock Market Courses can help you make smarter decisions. Think of this guide as your personal roadmap—simple, transparent, and written exactly the way I would explain it to a friend.

Learn how to buy unlisted shares safely. Beginner guide on Unlisted Shares and benefits of Online Stock Market Courses. Simple, clear & helpful.

Introduction to Unlisted Shares

Unlisted shares are becoming popular in India, especially among people who want to invest early in companies before they list on the stock market. But the process of buying them isn’t as straightforward as buying listed stocks on NSE or BSE.

This guide will simplify everything for you—from what unlisted shares are to the safest way to purchase them.

What Are Unlisted Shares?

Unlisted shares are the shares of companies that are not traded on stock exchanges like NSE or BSE.

Think of listed companies as restaurants on Zomato—everyone can find them easily, prices are visible, reviews are available.

Unlisted companies, on the other hand, are like local hidden-gem restaurants—great food, huge potential, but not easily accessible to everyone.

Examples of popular unlisted companies:

Tata Technologies (before IPO)
Oyo
Reliance Retail
HDB Financial Services
National Stock Exchange (NSE)

Investors buy these shares hoping the company will:

List on the stock exchange
Grow in valuation
Provide massive early-stage returns

Why Do People Buy Unlisted Shares?

Here are the biggest reasons:

1. Early Entry Advantage

Buying shares before IPO often gives investors multibagger potential if the company performs well.

2. Access to High-Growth Companies

Some of India’s upcoming giants are still unlisted.

3. Portfolio Diversification

Unlisted shares provide exposure beyond the regular stock market moves.

4. Better Valuation Opportunities

Sometimes the price of unlisted shares is far lower before IPO.

How to Buy Unlisted Shares – Step-by-Step

Let’s break it down in the simplest possible way:

Step 1: Choose a Trusted Platform or Dealer

Since unlisted shares aren’t traded publicly, you must choose a reliable source.

Step 2: Check the Company’s Financials

Look for the basics:

Revenues
Profit
Growth potential
Recent valuations

Step 3: Confirm Availability & Price

The price varies based on demand, supply, and company performance.

Step 4: Complete KYC & Payment

You’ll need:

PAN
Aadhaar
Demat account details

Step 5: Shares Get Delivered to Your Demat

It may take a few days depending on the seller and the transfer process.

Where to Find Genuine Unlisted Shares

Here are the safest sources:

1. SEBI-Registered Brokers

These offer the highest safety and transparency.

2. Online Unlisted Share Platforms

Platforms that specialize in pre-IPO and unlisted shares.

3. Employees Selling ESOPs

Many employees sell their company shares directly.

4. Private Equity Deals

High-net-worth investors sometimes sell stakes privately.

Methods to Buy Unlisted Shares (Explained)

1. Pre-IPO Market

For companies preparing for IPO.

2. ESOP Market

Buying shares directly from employees.

3. Private Placements

Dealers connect investors with share sellers.

4. Alternative Investment Platforms (AIPs)

Fintech platforms that curate pre-IPO opportunities.

5. Grey Market

Not advisable for beginners—high risk.

Risks You Must Know Before Buying

Buying unlisted shares comes with risks. Here are the major ones:

1. Liquidity Risk

Selling your shares may take time.

2. No Guaranteed Listing

Some companies may delay IPO indefinitely.

3. Price Volatility

Prices vary drastically because there is no regulated market.

4. Fraud Risk

Fake shares or unreliable sellers could cause losses.

5. Regulatory Restrictions

Minimum lock-in period applies after IPO for some shares.

How to Verify the Seller & Shares

Here’s a small checklist for safety:

Check if the platform is SEBI-registered
Ask for the company’s latest financials
Request a “Client Master Report” (CMR copy) from the seller
Verify share ISIN
Ensure payment is made through bank only (no cash)
Cross-check the demat details

Your investment is safe only when the shares reach your demat account.

Documents Required to Buy Unlisted Shares

You’ll need:

PAN
Aadhaar
Bank account
Demat account
Cancelled cheque
KYC documents (self-attested)

Price Discovery – How Unlisted Shares Are Priced

Unlisted share prices depend on:

1. Company performance

Financial strength impacts valuation.

2. Demand & Supply

If demand is high, prices increase.

3. Market Sentiment

Upcoming IPO hype impacts the price.

4. Past Fundraising Rounds

Investors look at the latest valuation of the company.

There is no fixed price, which is why research is important.

Taxation on Unlisted Shares

Unlisted shares are taxed differently from listed shares.

Short-Term (held < 24 months):

Taxed as per your income slab.

Long-Term (held > 24 months):

20% tax with indexation benefit.

SEBI Rules You Should Know

Lock-in of 6 months after IPO for pre-IPO shares
Shares must be transferred only through Demat
KYC is mandatory
Payments should be traceable and bank-to-bank

Common Mistakes Beginners Make

1. Buying Without Research

Don’t rely on hype.

2. Choosing Unverified Sellers

Always verify before paying.

3. Expecting Quick Returns

Unlisted shares require patience.

4. Not Understanding Liquidity

Selling may take time.

5. Not Taking Online Stock Market Courses

This is the biggest mistake—lack of financial education ruins investments.

How Online Stock Market Courses Can Help

Online Stock Market Courses are extremely helpful for beginners because they teach:

How to read financial statements
How valuations work
How to choose good unlisted companies
Risk management
How IPO pricing works

Learning first will help you invest confidently and avoid common mistakes.

Final Verdict – Should You Buy Unlisted Shares?

The answer is YES—but only if:

You understand the risks
You invest through trusted platforms
You research the company
You have patience

Unlisted shares can be life-changing investments, but only with the right approach and knowledge.

Conclusion

Buying unlisted shares is like discovering diamonds before they reach the jewellery shop—high potential but requires careful inspection. Now that you know how to buy unlisted shares safely, where to find them, how to verify sellers, and how Online Stock Market Courses can help, you’re more prepared than most beginners.

Start small, stay informed, and invest wisely.

FAQs

1. Is it legal to buy unlisted shares in India?

Yes, buying unlisted shares is completely legal if done through verified platforms.

2. Do I need a demat account to buy unlisted shares?

Yes, shares are transferred directly into your demat account.

3. What is the minimum investment in unlisted shares?

Depending on the company, it can start from ₹5,000 to ₹50,000.

4. How long does it take to receive unlisted shares in my demat?

Usually 2–5 working days.

5. Are unlisted shares safe to buy?

They are safe if you buy from verified sellers and understand the risks involved.