Unlisted and pre-IPO shares

Unlisted shares are bought from existing shareholders, such as employees, early investors or dealers, at a negotiated price. Once you pay, the shares are transferred into your demat account by an off-market transfer, so you hold them like any other share.

If the company later lists, pre-IPO shareholders generally cannot sell for six months from the IPO allotment date.

There is no exchange price. Quotes come from dealers and can differ widely, often with a large spread between buying and selling. Annual reports, filings with the Registrar of Companies and the draft IPO prospectus, if there is one, are the main sources. We go through them with you before you buy.

• Experienced investors with a well-diversified core portfolio.
• Money that can stay invested for several years with no guarantee of an exit.
• A small allocation, often a few per cent of the portfolio.

• Held more than 24 months: taxed at 12.5% on the gain, without indexation.
• Held 24 months or less: taxed at your slab rate.
• If the company lists, sales on the exchange follow listed-share rules, with the holding period counted from your purchase.

Capital gains tax calculator →

• Liquidity: there may be no buyer when you want to sell.
• Valuation: you may pay more than the eventual IPO price; listings can be delayed or cancelled.
• Limited information, and less regulation of the trade itself than on an exchange.

We give you valuation context against listed peers, explain the transfer and settlement process, check the share transfer is completed into your demat, and tell you what we earn on the transaction before you invest.

1. What you are looking forSectors, amount and how long you can stay invested.
2. The company and the priceFinancials, peers and the deal terms.
3. TransferPayment and off-market transfer into your demat.
4. Follow-upCompany updates, IPO news and tax at sale.