How to Buy and Sell Unlisted Shares in India: A Complete 2025 Guide

admin — Tue, 04 Nov 2025 09:42:50 +0000

Unlisted shares have become a popular investment route in India as more investors look for early opportunities in high-growth companies before they go public. These shares belong to companies that are not listed on stock exchanges such as NSE or BSE. Since they trade outside formal exchanges, the process of buying and selling them is different from regular equity investments. This guide explains the process step-by-step.

What Are Unlisted Shares?

Unlisted shares are equities of companies that are not listed on a recognised stock exchange. They commonly include:

Pre-IPO shares
Employee Stock Options (ESOPs) sold by employees
Shares of early-stage startups
Shares offered through private placements

As these shares are not traded openly on stock exchanges and are not subject to daily SEBI-regulated trading rules, they carry higher liquidity and risk considerations. However, they provide early access to potentially high-growth companies.

How to Buy Unlisted Shares in India?

The buying process is straightforward but requires due diligence and trusted intermediaries. The steps are as follows:

1. Research and Identify the Company

Study the company’s financials, growth prospects, industry performance, valuation, and risk factors. This helps shortlist suitable companies for investment.

2. Choose the Source of Purchase

Unlisted shares can be purchased through multiple channels:

Source of Purchase	How It Works
ESOPs from employees	Employees sell vested ESOPs after the lock-in period
Dealers or intermediaries	Connect buyers and sellers and facilitate transactions
Founders or promoters	Direct share sale through negotiation
Investment or wealth managers	Structured access to unlisted equity
Pre-IPO rounds	Companies sell shares before launching an IPO

3. Negotiate Valuation and Terms

Since the price is not exchange-regulated, valuation is determined by market demand, company performance, and negotiated terms. Clarify lock-in conditions, if any.

4. Complete KYC and Documentation

You will need to provide:

PAN and Aadhaar
Demat account details
Client Master Report (CMR)

The seller also shares necessary documents for verification and due diligence.

5. Share Transfer and Payment

After documentation:

A term sheet may be signed.
Payment is made through a secure channel.
The seller transfers shares to your Demat account through an off-market transfer.

Once the shares reflect in your Demat account, the transaction is complete.

How to Sell Unlisted Shares in India

The selling process is similar to buying, but in reverse.

1. Find a Buyer or Intermediary

Unlisted shares can be sold to investors, brokers, promoters, or interested buyers, including those looking for pre-IPO opportunities.

2. Share CMR and Required Details

Provide your Client Master Report, share quantity, and price expectations. The CMR validates your Demat details.

3. Transfer Shares to Buyer

After agreeing on the price, transfer the shares to the buyer’s Demat account. Proper documentation and identity proofs ensure compliance.

4. Receive Payment

Once the transfer is confirmed, payment is released to your bank account.

The post How to Buy and Sell Unlisted Shares in India: A Complete 2025 Guide appeared first on Trustedwrites.

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