Insurance and Investment - Unlisted Stock Trading.

What is Unlisted Stock Trading?

Unlisted stocks are shares of companies that are not listed on stock exchanges like NSE or BSE.

• These are usually startups, pre-IPO companies, or private firms.

• Trading in unlisted stocks happens over-the-counter (OTC) or through specialized platforms/dealers instead of public exchanges.

Key Points About Unlisted Stocks

• Source: Employees (via ESOPs), early investors, promoters, or private equity firms may sell.

• Liquidity: Lower compared to listed shares; may take time to sell.

• Pricing: Decided by demand & supply (not exchange-based).

• Risk: Higher risk, but also high return potential if the company lists in future.

• Regulation: Still governed by SEBI rules, but with fewer disclosures than listed companies.

Benefits of Investing in Unlisted Stocks

• Opportunity to invest in companies before IPO (e.g., Reliance Retail, HDFC Securities, Tata Technologies before listing).

• Potential for high gains if the company grows and eventually lists.

• Portfolio diversification beyond listed market.

Risks & Considerations

• Liquidity Risk – May be hard to sell quickly.

• Price Volatility – Prices not transparent like stock exchange.

• Regulatory Risk – Limited public information.

• Long Holding Period – IPO/listing may take years.