Key Features:

• Private Transactions: Unlisted shares are bought and sold through private transactions, not through regular trading mechanisms.

• Limited Liquidity: Due to the absence of a public market, buying and selling unlisted shares can be more challenging, often requiring longer holding periods.

• Valuation Complexity: Determining the value of unlisted shares can be complex, requiring in-depth analysis of the company's financials, growth prospects, and industry trends.

Benefits:

• Growth Potential: Unlisted shares in early-stage companies may offer significant financial rewards if the company succeeds and grows rapidly.

• Lower Valuations: Investing at an early stage often means lower valuations compared to later-stage investments or public offerings.

• Pre-IPO Opportunities: Owning unlisted shares may provide the opportunity to benefit from a successful Initial Public Offering (IPO).

Risks:

• Credit Risk: The performance of unlisted equity depends on the company's success, and there is a risk of the company not going public or failing.

• Liquidity Risk: Limited liquidity can make it difficult to sell unlisted shares quickly.

• Regulatory Risk: The market for unlisted shares is less regulated, which can increase the risk for investors.

Suitability:

Unlisted equity is ideal for investors with a high-risk tolerance and a long-term investment horizon. It is particularly suitable for those looking to diversify their portfolios and invest in promising startups and emerging businesses.

Disclaimer : The information provided on this blog is for informational purposes only and should not be construed as financial advice.