Unlisted Shares - Trading For Increased Profitability
Unlisted
shares are owned by those companies which aren’t listed on the stock exchange.
These shares aren’t traded publicly. For unlisted
shares trading, the investors have to go through over-the-market process
and the main advantage of these shares is that you get the exposure to interact
with new-age businesses that have the potential to increase your revenue
margin.
Things
you need to know before investing:
- Process
The
trading of listed shares is easy and quick that can be done simply by opening a
demat account but the unlisted shares aren’t traded in the regular exchange
method. Due to its trading over-the-counter, you need to be very careful to
know the process of buying these shares and the security of your investments.
Unlisted shares investment is a bit difficult and time-consuming but it should
be worthy enough to get you a huge profit.
- Shareholders
The
shareowners of unlisted shares are not defined. The angel investors, company
employees, venture capitalists, and intermediaries have these shares and the
undefined trading method for investment might be risky and inconvenient for
you.
- Liquidity of funds
To
find the buyers and brokers for unlisted shares investment is a tiring task.
Following that, the funds aren’t liquid in such investments. At the moment you
want to redeem them, your investment isn’t easily liquidated. The investment
decision seems to be regretful then, so you should make a certified decision
for yourself.
- Transparency
As
the unlisted shares belong to start-ups or small companies, this causes an
obligation in understanding the financial status of the companies. Whether you
are investing blindfolded or through a trusted intermediary, there is still no
transparency. Although you can build a strong reliable network to create a
sustainable space for your investment.
- Taxation
Unlisted shares aren’t taxed like the listed company shares. They have a different tax structure. The investments in unlisted shares secured for 2 or more than 2 years are eligible for long-term capital gains. On selling shares after 2 years, you will be taxed at 20% with indexation benefits on returns. The non-residents of the country are taxed at 10% without indexation benefits.
How
are unlisted shares worthy of you?
Unlisted
shares investment provides you so many benefits:
- Since the funds are illiquid in unlisted
shares investments, the investors prefer high-value investments. And, the
undervalued and overvalued evaluation of these shares can turn into
unpredictable returns.
- Like listed equity shares are functional on
a regular basis, the unlisted shares are a one-time investment for a long
period of time and you don’t have to track the fluctuations in the market
every day. It brings a piece of mind along with the profits.
- The investments in unlisted shares grow
exponentially. It starts with a small chunk and has a probability of
booming in the future. Its capability is directly proportional to the
growth of the company.
- Unlisted shares buy and sell offer
diversification of risk for the investors. The unlisted companies are in
the state of yet to hit a target for your profit but your existing
investment companies have a known profit range.
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