Frequently Asked Questions
Unlisted shares are the shares that are not listed on any stock exchange. The shares floating in the market comes generally from the shares allotted to the employees via ESOP or sometimes given to the dealers of the company. These shares may be physical or demat bcoz they might be issued even 50 years ago.
These companies are generally highly profitable in comparison to delisted Companies.
In general, there is a very low risk of capital in Unlisted shares. But the main challenge is the time duration for holding. You must be prepared to hold them for 5-10 years probably. People like us can help in liquidating the holdings. But it depends on the investor’s sentiment at that particular time. So, think 10 times before investing that you may have to wait for 5-10 years for exits. But most of the times investors get returns of more than 1000%
Yes, you can sell unlisted shares but you have to check few things in this context.
Shares must be in demat form – Yes, you need to get it dematerialized. without demat the shares cannot be sold. the SEBI has banned the transfer of physical shares in 2019. So they cannot be sold in physical form. Open a demat account with a stockbroker & ask them to get your shares demat. then only you can sell.
Lock-in – Sometimes, the unlisted shares are locked in by the company itself. Generally, people get these shares via ESOP given by the management but these shares are restricted for transfer by a certain clause. So, you must confirm with your broker that whether these shares are showing ” Free Balance” or not.
It’s really not easy to sell or dispose of your holding of delisted shares. 99% of the people had invested in the company when it was listed. It’s just bcoz the company status changes from listed to delisted due to the following reasons
Stock is suspended for trading due to non-compliance.
The stock exchange is closed like Ahmedabad stock exchange, Delhi Stock exchange & lot others
Voluntary delisting by the company itself
Non-tradable due to lack of buyer-seller in the stock
First of all, you need to check whether your holding is in physical form or Demat form. If it is in physical certificate form, then you will not be able to sell it even if there is a buyer. Why?? you might be thinking. The reason is the physical transfer of shares in India has been banned by SEBI in 2018. So, the alternative is to convert it into Demat form.
Demat shares are the shares that are converted into electronic form Physical form. These electronic holdings are been kept in your Demat account. A Demat account is just like a savings account in a bank. You can easily transfer that holding or you can easily sell it if it got listed anytime. But the transfer of physical shares is banned, so immediately go to a broker or bank, open a Demat account & ask them to convert the physical certificates into Demat. Bank will provide you a “DRF form” i.e “Demat Request Form”. You have to fill it, get it signed by the shareholder & handover the DRF along with the original share certificate to the bank or broker. One more important thing to remember, If this holding is very old, then there is a big chance that your Signature may not match. So, kindly make sure to get your signed attested by the bank on the DRF form. Once the holding got converted in Demat form, you are free to sell.
But! But! it doesn’t mean that you can sell it. It is ready to sell but if you don’t have an appropriate buyer how you can sell??
There are a lot of unlisted/delisted players that deal in such shares. Our company also helps people to dilute such shares.