16 January, 2025 | India
Investing in unlisted shares presents a unique opportunity for diversification and potential high returns. Traditionally, the focus has been on publicly traded stocks, bonds, and mutual funds, but unlisted or private shares have captured the attention of both institutional and retail investors alike. Unlisted shares include shares of private companies, pre-IPO shares, and securities issued by private equity and venture capital funds. Several companies’ stocks like NSE, Nayara Energy Limited, Tata Capital Limited, OYO, etc. play a major role in the growth of unlisted market space in India. NSE India, being the largest company available in the Indian Private Market, has a market capitalization of INR 4,45,500.00 crores as its shares are currently trading at INR 1800, as on December 10, 2024. However, these rewarding investments come with their own set of risks and challenges that must be understood thoroughly before investing.
Why is Unlisted Market Growing in Popularity in India
Krishna Patwari, Founder and Managing Director of Wealth Wisdom India Pvt. Ltd. observes that with the rise of technology-driven businesses and innovative startup ecosystems, the demand for capital has significantly increased. Many early-stage companies seek funding through unlisted shares to avoid the costs and regulatory hurdles associated with IPOs. Online platforms like Primex 40 Index track the live performance of the top 40 unlisted companies in India across various sectors and market capitalizations and serve as a benchmark for investors in the unlisted share market, providing insight into the private market landscape.
Rewards of Investing in Unlisted Shares
Risks of Investing in Unlisted Shares
While the potential rewards can be exciting, Krishna Patwari cautions against the risks associated with unlisted shares.
The Role of Investment Platforms & Regulatory Framework
Investment platforms like www.wwipl.com have emerged as the best platform to buy unlisted shares in India as it facilitates easy buying and selling of unlisted, delisted and PRE-IPO shares, providing investors with access to immense opportunities. WWIPL simplifies the complex process of investing in unlisted shares by offering a user-friendly interface and smooth process. Before listing any company, WWIPL performs due diligence of financial assessments and reviews the company’s business model, management team, and market potential, mitigating the overall risks involved. Wealth Wisdom India, also offers liquidity solutions with easy trading mechanisms that enable investors to buy and sell these shares more easily.
Krishna Patwari suggests a disciplined approach to maximize returns:
Investing in unlisted shares in India presents a complex landscape filled with both risks and rewards. Investors should carefully weigh the pros and cons before making investment decisions. It is crucial to conduct thorough research, understand the risks involved, and seek professional advice if necessary. By following a disciplined approach and diversifying their portfolio, investors can potentially reap the rewards of investing in unlisted shares while mitigating the associated risks. As India’s economy continues to evolve, unlisted shares will likely play an increasingly important role, making knowledge and preparation key to successful investment in this sector.
Dusclaimer-
(This article is part of DMCL Consumer Connect Initiative, a paid publication programme. DMCL claims no editorial involvement and assumes no responsibility, liability or claims for any error or ommission in the content of the article. The DMCL editorial team is not responsible for this content.)
Link to article –
Unlisted Shares in India: Risks, Rewards, and Investment Strategies for 2025
