Trading of listed and unlisted companies
In the Indian market, trading in the shares of listed and unlisted companies takes place in different ways, and the common man can invest in them through various platforms.
Trading in listed companyListed companies are listed on the stock exchange (BSE or NSE). The common man can open a demat account and trading account to buy or sell their shares. By logging on to the trading app or website, the investor can buy and sell shares in real-time. Compliance with SEBI rules is mandatory.
Trading in unlisted companiesUnlisted shares are shares of companies that are not publicly listed on the stock exchange. These shares can be issued by private companies, small and medium-sized companies, and companies that are still not ready to be publicly listed.
Trading of shares of unlisted companies in the Indian market is not done through the stock exchange. This trading happens “over-the-counter” (OTC) or directly between buyers and sellers. There is a credit risk as these shares are not governed by the stock exchange.
How to buy/sell unlisted shares1. Contact the buyer or seller directlyn:
You can contact the company directly or contact other shareholders who want to sell unlisted shares.
2. Use a broker or dealer:
Some brokers or dealers help in trading unlisted shares.
3. Participate in a buyback done by the company:
If the company buys back its shares, you can participate in it.
4. After the company goes public:
If the company gets listed in the future, you can buy their shares in the stock market.
Rules and precautions
Before investing in the unlisted stock market, you should be careful as these shares are not listed by the stock exchange. Before buying unlisted shares, gather as much information as you can about the company and its shares. If you are trading through a broker or dealer, select a reliable and experienced broker or dealer. If you transfer shares, you will have to provide demat account details, CMR copy and bank details to the buyer.
Trading in unlisted shares involves higher risks, but can be an investment option for those who want to invest in companies that are not publicly listed.
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