Buy and sell unlisted shares

 

If you want to know how Jordan became the wolf of Wall Street, then this is for you.

Jordan's meteoric rise in the stock market was fueled by one secret weapon: The Unlisted Share Market. If you want to make this weapon your own, Precize is here to tell you how to use this weapon so you can be your own wolf of Wall Street.

Buying and selling unlisted shares and how you will profit from them.

Before knowing how to buy and sell them, let’s just quickly get to know what they are. Unlisted shares, in simple words, are like pieces of ownership in companies that are not publicly traded on stock exchanges; they're like owning a part of a private business so that from the company's profit, you can make your own profit. The question is, “How will you make a profit from it?” 

The answer is very simple. Unlisted shares are a kin to having a stake in a private business. When the company makes a profit, you can potentially share in those profits, either through dividends or by selling your shares at a higher price in the future, allowing you to make your own profit from your investment.

Let's dive a bit into profit-making: 

Profiting from owning these shares involves a combination of factors, including dividends, capital appreciation, and strategic decisions. Let's explore these aspects in more detail:

1. Capital Appreciation:

Unlisted shares can increase in value over time as the company grows and becomes more profitable. This capital appreciation allows you to profit when you sell your shares.

2. Dividends

Many private companies, even unlisted ones, distribute profits to their shareholders as dividends. You are entitled to a portion of these dividends when you own unlisted shares. The company's board of directors decides the dividend amount, typically a percentage of the company's earnings.

To make a profit from dividends, you can either receive regular dividend payments as income or reinvest them by buying more shares, potentially increasing your future dividend income.

3. Exit Strategies:

Planning your exit strategy is crucial for making a profit from unlisted shares. Consider these options:

• Initial Public Offering (IPO): If the company decides to go public, you can sell your shares on a stock exchange through the IPO process, potentially at a higher valuation than your initial investment.

• Private Sale: You can sell your unlisted shares to another private investor or a strategic buyer interested in acquiring the company. Private sales often involve negotiations to determine the selling price.

• Secondary Market Transactions: Precize is a secondary market platform that helps sell unlisted shares in a secondary market. This allows you to find buyers for your shares outside of traditional exchanges.

• Buybacks: Some companies may offer to repurchase shares from their shareholders, providing an opportunity for you to sell your shares back to the company.

Now that you know the drip of earning profits through unlisted shares, let's get to know how to buy them.

There are three gateways to acquiring unlisted stocks:

• Subsidiaries of listed parent company: Imagine this as discovering valuable branches of a well-known tree, where you explore subsidiary companies connected to big, publicly traded ones. For example, Reliance Group has 158 +  subsidiary companies and seven associate companies. Here are some of the most popular Reliance Industries Subsidiaries

1. Jio Platforms Limited

2. Reliance Retail

3. Reliance Life Science

4. Reliance Logistics

Buying unlisted stocks from smaller companies connected to bigger ones is like getting access to various opportunities within a more significant, powerful company. This can benefit from the overall strength of the larger company.

• From New Age Business: Exploring investments in "new age" businesses is like going on a thrilling journey into the world of innovative startups. It's like a treasure hunt for promising ventures that could become the next big thing. While these investments can be riskier, they also have the potential for substantial rewards because they're the future leaders in the business world. Investors taking this path want to be part of the next major success story. For example, let's look at these startups that showed tremendous growth in quite a short time.

1. Paytm

2. Urban Tots

3. Waaree Energies

4. Ola

• Delisted Shares: Delisted shares are like hidden gems that were once on the public stock market but have been removed. Buying them is like giving these forgotten treasures a fresh start in your investment collection. This method may need careful consideration because delisted shares can come with unique situations and difficulties. However, it can also offer chances for investors who can smartly analyze and rejuvenate these shares for potential profit and a more diverse investment portfolio. Here are some of the shares that got delisted.

1. Capgemini Technology Services India Ltd

2. ESL Steel Ltd

3. Hexaware Technologies Ltd

4. Nayara Energy Ltd

Selling of Unlisted Shares

When you talk about selling shares, the two questions that pop into your head are “WHERE TO SELL?” and “How to evaluate them?”. To your rescue, as always, Precize has come up with an answer to this as well. 

Time to retrieve the gold-:

• Online Platforms: Some online platforms specialize in facilitating the buying and selling of unlisted shares. At Precize, we assist you in securing liquidity for your shares at the Current Market Price (CMP), thereby minimizing the risks associated with acquiring unlisted shares on your behalf.

• Investment Clubs and Networks: Joining investment clubs or networks can be a way to connect with potential buyers or sellers of unlisted shares. These forums often focus on alternative investments and private securities.

• Direct Sale to the Company: In some cases, the company whose shares you hold may have a buyback program or be interested in repurchasing shares directly from shareholders. Contact the company to inquire about such opportunities.

How to evaluate your shares while investing in them:

To let you in on a few of the critical points you must remember while selling these shares, they are as follows: 

• Value Assessment: Determine the fair market value of your unlisted shares, either with a professional valuator or various valuation methods.

• Network: Leverage your personal and professional connections to find potential buyers within your industry or investment circles.

• Financial Intermediaries: Seek assistance from specialized intermediaries who can connect you with potential buyers and facilitate the transaction.

• Stock Exchanges for Unlisted Shares: Explore specialized stock exchanges or platforms dedicated to trading unlisted shares in your region, providing a regulated environment.

• Legal and Financial Due Diligence: Ensure all necessary legal and financial documents are in order, as buyers will conduct due diligence.

Always do thorough research and due diligence before buying or selling unlisted shares. Investing can be an exciting journey filled with opportunities and mysteries, so stay curious and keep learning cool investing tricks with Precize.