Frequently Asked Questions

Unlisted shares are shares of companies that are not listed on stock exchanges. They are traded over-the-counter (OTC). Unlisted shares are also known as off-market stocks or OTC securities. unlisted shares are traded privately between investors. These shares are typically owned by founders, early investors, employees with stock options, or other private investors. Investing in unlisted shares provides an opportunity to participate in the growth of private companies before they go public.

A Pre-IPO stock is a stock of a company that has not yet gone public. Pre-IPO companies have a solid business model. Often, Pre-IPO companies have more information available than other Unlisted companies. Investing in pre-IPO shares allows investors to acquire ownership in a company before it becomes publicly traded, potentially at a lower valuation compared to its IPO price. Pre-IPO investors aim to capitalize on the company's growth potential and may benefit from significant appreciation in share value if the company successfully goes public.

By including unlisted stocks in a well-rounded portfolio, investors can reduce their exposure to traditional stock market fluctuations and potentially enhance their overall returns. Unlisted shares offer a unique asset class that can complement existing investments and provide diversification benefits. Direct ownership in private companies provides involvement in their success and potential for liquidity events. Including unlisted shares enhances portfolio flexibility and presents strategic investment opportunities. While less liquid than public stocks, unlisted shares can offer significant benefits for investors seeking growth and diversification.

1) The valuation of the companies depends on the demand and supply primarily. 2) Apart from demand and supply forces valuation for unlisted shares is also determined through a rigorous process that considers various factors such as the company's financial performance, growth potential, industry comparables, and market demand.

Unlisted shares present a compelling case over listed shares due to several key advantages. Firstly, they provide a controlled trading environment, shielding investors from short-term market volatility and speculative trading. Also, investing in unlisted shares offers access to early-stage opportunities in startups and high-growth companies, potentially yielding significant returns as these companies mature.

1) Unlisted shares on Unizon are primarily sourced from existing shareholders of private companies. These sellers may include founders, early investors, employees with stock options, or other private investors seeking liquidity for their investments. 2) Additionally, companies themselves may facilitate the sale of unlisted shares to raise capital for expansion, acquisitions, or other strategic initiatives. Unizon's platform provides deal facilitation where sellers can list their shares, and interested buyers can engage in transactions, ensuring transparency, security, and fair pricing.

1) Investing in unlisted shares presents inherent risks that investors should carefully consider. Firstly, these shares typically lack liquidity, making it challenging to buy or sell them quickly at fair prices. However, this illiquidity often results in lower volatility and Unizon aims to create a more liquid market for unlisted shares. 2) Secondly, determining the value of unlisted shares can be uncertain due to limited information disclosure. Nevertheless, this opacity is tackled effectively on Unizon Platform by providing a Market Depth Functionality which ensures transparent valuation. 3) While liquidity and valuation risks exist, the flexibility and innovation inherent in unlisted companies can lead to groundbreaking advancements and industry disruption.

There is a lock-in period of six months if you have the shares of a company that announces an IPO and is getting listed on the stock exchange. You cannot sell such shares for six months from the date of listing. Such shares are known as Pre-IPO shares. This lock-in increases to a period of one year in case of SME IPO.

Usually in Pre-IPO companies, Lock-In of shares is imposed before IPO Bids open.

The Duration of lock-in depends on the category of Investors. For Retail/HNI investors there is a lock-in of 6 months or 1 year for Main board or SME IPO respectively.