How to Invest in Unlisted Companies in India?

 

How to Invest in Unlisted Companies in India?

Investment in Unlisted Companies in India is not very uncommon. In fact, I am from Ahmedabad city, Gujarat, India and In 2004-04, When I started investing in the stock market, I had invested in several unlisted companies.

So What is the Logic behind investing in Unlisted companies?

Well, the logic behind investing in unlisted companies is that, here you buy the shares of unlisted companies (means the companies which are not listed on any stock exchanges) from your broker in the hope that in future these companies may get listed on the stock exchanges and you will make enormous profits.

However, in countries like USA, only Accredited Investors can invest in the unlisted securities/shares.

But in India, the market is highly unregulated and that’s why anyone can invest in the unlisted companies.

How to Invest in Unlisted Companies?

Well, I knew one broker via my friend personally and via this broker I used to invest in the unlisted companies.

What are the Pros & Cons of Investing in Unlisted Companies?

Well, the main disadvantage of investing in unlisted company in India is that, 99% of these unlisted companies are not making any profits and many of them are simply frauds.

And that’s why your chances of making huge profits are very less. I have seen several people who are holding the tons of unlisted companies shares since decades and none of those companies get listed.

On the other hand, the advantage is that if only one or two of the unlisted companies of your portfolio get listed on the stock exchange, you will make enormous profits from your this investment.

My Opinion about Unlisted Companies -

Well, In my opinion without knowing the management team, founders and the financial statements of any company, one should not invest in unlisted companies.

And if still you plan to invest in these unlisted companies than only invest your surplus money that you can afford to loose.