Investors worldwide are constantly searching for new ways to diversify their portfolios and maximize returns. One promising avenue is unlisted shares, also known as pre-IPO shares. These private market investments offer access to early-stage companies, significant growth potential, and enhanced diversification. But what exactly are unlisted shares, and how can platforms like Precize make investing in them seamless? Let’s explore.
What Are Unlisted Shares?
Unlisted shares, or pre-IPO shares, are equity shares of companies that are not publicly traded on stock exchanges like NSE or BSE. These shares are typically bought and sold privately through brokers, investment platforms, or other intermediaries.
Historically, investing in unlisted shares was limited to institutional investors such as venture capital firms, private equity funds, and high-net-worth individuals. However, as private markets evolve, retail investors now have access to this high-growth asset class.
Why Are Unlisted Shares Gaining Popularity?
The private equity market has witnessed exponential growth over the years. According to sources, private equity assets (excluding venture capital) have now reached an estimated $3.6 trillion. This growth is driven by factors such as higher returns compared to public markets, increased private investment, and the rapid scaling of private companies. Since 2005, private equity has outperformed other asset classes with a compound annual growth rate of 14%.
Key Advantages of Investing in Unlisted Shares
1. High Growth Potential
Unlisted shares provide an opportunity for substantial returns, especially if the company eventually goes public. Some notable examples include:
- Tata Technologies: Share price surged by 156%, rising from ₹469 in 2022 to ₹1,200 in 2023.
- Waaree Energies: Experienced a 311% increase, with shares climbing from ₹620 in 2023 to ₹2,550 in 2024.
2. Early-Stage Investment Opportunities
Investing early in promising companies can yield significant gains over time. Examples include:
- NSE (National Stock Exchange): NSE unlisted share prices Grew by 256%, from ₹1,700 in January 2021 to ₹6,049 in August 2024.
- Orbis Financials: Increased from ₹65 in February 2022 to ₹405 in September 2024.
- HDB Financial Services: Rose from ₹630 in September 2022 to ₹1,304 in November 2024.
3. Portfolio Diversification
Adding unlisted shares to a portfolio helps reduce exposure to public market volatility while providing stable, long-term growth potential. Unlike publicly traded stocks, unlisted shares are less affected by daily price fluctuations.
4. Access to Exclusive Opportunities
Unlisted shares provide access to companies before they go public. Investing in these companies offers opportunities not available in the public markets.
How to Invest in Unlisted Shares
Navigating private markets may seem complex, but platforms like Precize simplify the process. Here are the main ways to invest:
1. Direct Investment in Startups
Some startups provide shares to investors during fundraising rounds, but this typically involves thorough due diligence and a significant capital commitment.
2. Through Intermediaries or ESOP Sales
Unlisted shares can be acquired through intermediaries who facilitate transactions between investors and sellers, including employees liquidating their Employee Stock Ownership Plans (ESOPs).
3. Via Investment Platforms
Platforms like Precize simplify investing in unlisted shares, starting with a minimum investment of just ₹10,000. With access to over 150 private companies, from startups like boAt to established names like Tata Capital, it opens up private market opportunities for all investors.
How Precize Simplifies Investing in Unlisted Shares
Precize is a trusted platform that makes private market investments more accessible. Here’s how:
1. Access to a Wide Range of Companies
Precize provides access to over 150 private companies, offering real-time stock price updates for boAt, Taparia Tools, Vikram Solar, and more. Investors can track the latest Taparia Tools share price, Vikram Solar share price, Polymatech share price, boAt share price, and stay updated with the latest news on private companies directly on their website.
2. Comprehensive Research Reports
Precize provides detailed reports that include peer comparisons and industry analyses, to help investors make informed decisions.
3. Price History and Market Updates
With historical price data and regular news updates, investors can track trends and identify strong investment opportunities.
4. Seamless Transactions
Precize enables easy buying through a streamlined 3-step process and selling of unlisted shares by facilitating a buyer for the shares in 24-48 business hours.
Steps to Invest in Unlisted Shares via Precize
- Select Your Company: Choose from over 150 private companies based on your financial goals.
- Add Funds: Add funds to your Precize account via UPI or bank transfer.
- Place Your Order:Confirm your investment, place an order, and the shares will be transferred to your NSDL or CDSL depository account within 24-48 business hours.
Risks of Investing in Unlisted Shares
While unlisted shares offer attractive benefits, they also come with risks:
- Limited Liquidity: Unlisted shares are not traded on stock exchanges. However, Precize enables liquidity by finding a buyer within 24-48 business hours.
- Lack of Transparency: Private companies are not obligated to disclose quarterly reports like listed ones, but they do release annual reports, which are available on the Precize website.
Conclusion
Unlisted shares present an exciting investment opportunity, offering substantial growth potential, early access to promising companies, and portfolio diversification. While they come with inherent risks, platforms like Precize simplify the process by offering research reports, and a seamless transaction experience.
Whether you’re an experienced investor or new to private markets, investing in pre-IPO shares can enhance your portfolio. To start your journey reserve your access now!
Disclaimer: This information is intended for private use only and does not constitute investment advice. Any company names mentioned are for illustrative purposes and should not be interpreted as recommendations. Investors should carefully evaluate risks and seek advice from financial, legal, and tax professionals before making investment decisions. Investment outcomes are subject to market conditions and company performance.