Unlisted shares are shares that are not publicly traded, meaning that investors can’t buy or sell them on a stock exchange. Although this is typically seen as a good thing, it has some risks associated with it. In this article, you’ll find everything you need to know about what unlisted shares are, their benefits, and their risks.
What are unlisted shares?
Unlisted shares are shares that are not traded at any exchange. They exist in companies that don’t want to make their share prices public, or for some other reason. There is an inherent risk with unlisted shares, as they may be called out of existence by the company without warning or notice if something goes wrong. India is one of the fastest-growing economies in the world. The country has achieved an impressive 7% growth rate for five consecutive years. One way to profit from this growth is to invest in Indian stocks, which are bought and sold on the stock market. Many people purchase shares through brokers, on being Babli Investment Unlisted Share Dealer instead of directly buying shares in India.
What are the risks of investing in unlisted shares?
Unlisted shares are an interesting area of investment because they do not appear in the share markets. Unlisted shares are not registered with any regulator. As a result, the investor has no protection against fraud, insider trading, or other misconduct. This means that their owners must sell them privately – typically to one or two investors. As a result, these shares can vary in price and liquidity, which can make it difficult for small investors to decide whether they should buy them. Unlisted shares are typically high-risk investments because they are not listed on any stock exchange. Investors who put money into unlisted shares should be aware of certain risks associated with investing in unlisted shares.
How to be safe with unlisted share investments?
Unlisted shares are a type of securities without a public market. When you invest in an unlisted share, you don’t pay a brokerage fee for your transaction. However, one major risk is that the company you invested in may be unable to continue operating after the expiration of the term of the unlisted shares. The risk may also be too high or too low and thus not beneficial to you.
Conclusion
The unlisted shares initiative of the government of India is highly significant with regards to preventing fraud and boosting capital market development. However, it also raises some concerns. The first is the potential for increased opacity in the system. Another concern is the impact of hidden shareholding on corporate governance. In conclusion, it wouldn’t be a good idea to rely solely on the market for your investments. The shares that are not listed have no regulations and no protection.
Read more on KulFiy
6 Best stocks to buy right now
How to manage your cryptocurrency portfolio risk?