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:

1. 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.

2. 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.

3. 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.

4. 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.

5. 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:

1. 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.
2. 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.
3. 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.
4. 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.