This Blog is created to provide you with information about you the Unlisted market and Unlisted Shares. Here I’m going to introduce the complete procedure of buying an Unlisted Shares from Unlisted Market.
What is an Unlisted Market?
Companies that are not listed on an exchange but have issued shares to the secondary market to raise capital from market participants are listed in the Unlisted market to trade.
Companies that are traded in the unlisted markets may not be guaranteed to open their IPO in the future.
At first sight, it looks like a blind bet because you just know companies’ financials but the company might not need to raise money in the future so in that case you just own a share of the company which is not being traded, you can liquidate that shares and withdraw money. Because the company is not listed, you can’t be able to track the price of shares as frequently as the listed one.
Every time you have to ask a broker about price update on company share.
Steps to Buy Unlisted Shares?
Step 1. Call the broker and Get the list of companies available to buy form unlisted market.
Step 2. Decide the company you want to invest in.
Step 3. Make sure you already made an account with the depository ( CDSL/NSDL – depends on the broker you’re associated with ex. Zerodha, and Fyers all are associated with CDSL )
( Depository is the same as a bank that holds your actual shares in digital format. )
Step 4. Download a CMR copy of your demate account from your broker’s site(if available), or mail the broker’s support to send you CMR Copy.
CMR copy provides necessary details about your Demat account which are useful for share transfer.
Example of CMR copy given below. You can get it from Broker’s website.
Step 5. Send CMR copy to the above broker( UnlistedZone, or 3Adeal ) and tell them about the share you want to buy and the quantity requirement.
Step 6. Once all detail sent, the Broker issues a Deal Confirmation Letter(DCL), which is proof that the requirement to buy this share for you is already requested by the depository.
Step 7. Now, the broker will ask you to make a payment. They will provide bank details of their company, You have to make payment on that.
Step 8. Once payment is done, Share will be transferred to your account within 6-24hrs.
Shares you bought can’t be able to find in Kite/Fyers trading app. You have to check back office/console > Holding for tracking the share. The price of the share can’t be changed in your back office because it’s unlisted but it is regularly updated as per their demand in the Unlisted Market.
You can regularly ask a broker about price Updates.
Example of Unlisted shares :
Share started trading in the Unlisted market around the price of 900 in October, currently, it’s trading at 3600RS. ( So please ask regularly the price of the share you bought if you want to track. )
Share started trading in the unlisted market at around the price of 400, before it was listed as IPO, It was trading at 1900Rs in the unlisted market. But IPO came at 1100. So it’s better to keep tracking and booking profit regularly.
That’s it for now.
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