Sahare Wealth · Unlisted shares
Unlisted shares: know before you invest
Unlisted shares belong to companies that are not traded on a stock exchange, often well-known companies before their IPO. They can offer early access, but they carry high risk and can be hard to sell. Understand how they work, then talk to us.
- Risks explained upfront
- Shares credited to your demat
- Help from Nagpur
SEBI's caution on unlisted share platforms (June 2026)
SEBI has said that electronic platforms facilitating deals in unlisted shares of public limited companies are not authorised or recognised by SEBI. For disputes from such deals, investors don't get:
- Investor protection under SEBI or stock exchange rules
- Stock exchange grievance redressal
- Online dispute resolution through SMART ODR
Read SEBI's press release (opens in a new tab), and talk to us before you invest.
Compare
Listed shares vs unlisted shares
Unlisted shares are real shares in a company, but buying and selling them works very differently.
| Feature | Listed shares | Unlisted shares |
|---|---|---|
| Where traded | Recognised stock exchange | Off-market, through dealers and platforms |
| Price | Live market price | Quoted by the seller; can vary widely |
| Selling | Usually easy during market hours | You need to find a buyer; can take time or may not be possible |
| Company information | Regular disclosures to the exchange | Limited, mainly annual reports |
| Settlement | Through the exchange's clearing system | Directly between buyer and seller, so there's counterparty risk |
| Investor protection | Exchange grievance redressal and SMART ODR | Not available for deals on unrecognised platforms |
Risks
What can go wrong
Unlisted shares suit only investors who understand these risks and can afford a loss.
Paying too much
Pre-IPO prices are often high. Shares can list below the price you paid, or the IPO price itself can be lower.
The IPO may never happen
Plans for an IPO can be delayed or dropped, leaving you holding shares that are hard to sell.
Lock-in after listing
Pre-IPO shares are usually locked in for 6 months after the IPO allotment, so you can't sell straight away.
Hard to sell
There's no exchange to sell on. Finding a buyer at a fair price can take time.
Counterparty risk
You pay the seller directly. Check that shares are credited to your demat account as agreed.
Limited information
Unlisted companies disclose much less than listed ones, so it's harder to judge their value.
How it works
How buying unlisted shares works
Take your time at each step. Never pay before you understand exactly what you're buying and from whom.
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Talk to us
We'll go through the risks, the lock-in rules and how much of your portfolio this should be, if any.
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Study the company
Read its latest annual report and financial statements. Compare the quoted price with the company's numbers.
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Confirm the deal
Agree on the price, quantity and timeline in writing, and confirm who is selling and how the shares will be transferred.
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Pay and check your demat
Pay only from your own bank account. Check that the shares appear in your demat account and in your depository statement.
Official sources
Check the details yourself
Questions
Frequently asked questions
What are unlisted shares?
Shares of companies that are not listed on a stock exchange. They include shares of companies planning an IPO, often called pre-IPO shares.
Can individuals buy unlisted shares?
Shares can be transferred off-market between two people, but such deals are outside stock exchange protections. SEBI has cautioned investors about platforms facilitating these deals; please read the caution at the top of this page.
What happens when the company lists?
Your shares become tradable on the exchange, but pre-IPO shares held by non-promoters are usually locked in for 6 months from the IPO allotment date.
How do I sell unlisted shares?
You need to find a buyer, usually through a dealer or platform. There's no guarantee of a buyer or a fair price.
How are gains on unlisted shares taxed?
Unlisted shares are taxed differently from listed shares, including a longer holding period for long-term gains. Please check with your tax adviser.
Does Sahare Wealth recommend specific unlisted shares?
No. We don't give tips or price targets. We help you understand the product and its risks; the decision is yours.