What are Shares Worth in an Unlisted Company?

What are Shares Worth in an Unlisted Company?

The market for Unlisted securities (Shares) is very huge in India. In developed countries like USA, only an Accredited Investors (People having Net worth of more than $ 1 Million) are allowed to invest in Unlisted Securities because they are high risk.

But unfortunately, In countries like India, There are no such regulations. And that’s why a common people also enter into this highly unregulated market of buying and selling unlisted securities. And most of the time they loose their money.

This is because most of the people in India, who invest in Unlisted Company don’t know that “How to Analyze a Financial Statement of a Company”. They blindly follow the advises of their brokers.

So How to do proper Valuation of the Shares of Unlisted Company? Well, for that, you have to learn to Analyze the Financial Statements. Analyzing the Financial Statements is the key of successful Investing.

So first of all, learn to analyze the financial statements in detail. It’s easy to learn this if you put few hours a day effort to learn it. There are many Audios, Videos and eBooks available on the Internet. You can simply download these eBooks, audios and videos from the internet and learn to analyze the financial statements.

Every company has a Balance Sheet and an Income Statement. You have to first of all analyze in the Balance sheet that, how many Assets & Liabilities Companies have. After that you have to check in the Income statement that, what is the Income, Expense & Cashflow of the Company?

And after analyzing all of these parameters, the fair valuation of each share should be done. But not in anyway, you should blindly follow the advise of your broker…!!!! Remember, A Broker is not an Investment Analysts or a Financial Advisor.