FAQs

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What is the meaning of unlisted equity share?

Equity shares of a company that are not yet listed on the Stock Exchanges like BSE, NSE, MSEI, etc. are called unlisted equity shares.

Who sells unlisted equity shares?

The shares are being sold by existing investors mainly because they have alternate investment opportunities or to fulfill personal financial needs. The shareholders generally include current employees and ex-employees, private equity investors etc.

Is the company involved in selling shares in a pre-IPO?

No. This is a secondary off market transaction and the Company is not involved in the transaction.

Are the shares available in the Demat form?

Yes, all the shares that we are dealing in are available in demat form only.

How do you find the current market price of an unlisted company?

The price is mentioned on our website or you contact us on [email protected] or on +91 91377 18552 to get latest share price of any company.

Can an NRI buy unlisted shares?

Yes, an NRI can buy unlisted shares like a domestic investor on non-repatriable basis. NRI can buy unlisted shares on repatriable basis but it requires reporting to RBI. For further information, please contact us.

Why do investors buy in a Pre-IPO?

The companies available in Pre-IPO are generally companies growing fast and many a times IPOs are to give exit to existing investors thus priced higher.

 

Investing in pre-IPO helps the investor:
1. To participate in the growth of the company
2.Get opportunities which otherwise would be available to big entities like PE Firms etc
3.Get in at reasonable valuations

What is the kind of time horizon to see the gains in unlisted shares?

One should at least hold for 3 years to see meaningful returns.

What is the minimum amount one can invest in a Pre-IPO?

Our minimum ticket size is INR 10,000.00

Do the pre-IPO shares have any lockin?

Before IPO: There is no restriction on transfer of shares held in demat form until IPO Cut-off date of allotment of shares in the IPO (Generally a week before allotment of shares in the IPO).

After Listing: As per SEBI rules, all Pre-IPO shares have a lockin for 1 year from the date of listing. You can see the shares in your demat holding as shares under lockin.

Is unlisteddeal or Wealthquest Investment Advisor a registered investment advisor?

We are not a registered Investment Advisor and we do not recommend to buy/hold/sell any shares. Please consult your financial advisor before investing.

What is the kind of returns one can expect in investing in pre-IPO?

The returns on the investment depends on the Company and its management’s execution capabilities.

What are the kinds of risks involved in investing in pre-IPO?

The major risks involved in Pre-IPO are:

A. Management Risk: The Company Management may not be able to execute as planned.

B. Timeline Risk: Due to any reason, the company takes longer than expected to list or may not list at all.

C. Liquidity Risk: There is liquidity risk in an unlisted company and one may not be able to sell the shares as and when required.

What are the tax implications of investing in Pre-IPO?

As per IT Act, an unlisted equity shares can be termed as long-term capital assets if held for more than 2 years else it is short term capital assets.

For a domestic investor, Long term capital gain (LTCG) on unlisted equity shares is taxable at 20% of LTCG and are given indexation benefit.

Short term capital gain (STCG) on unlisted equity shares is taxable at slab rate applicable to the investor.