What are unlisted stocks, what are the ways to buy them? Know everything here

You probably would be investing in listed companies in the share market. Sometimes you earn a lot in that. But do you know you can also invest in unlisted companies in the share market and how to buy shares of unlisted companies. Read on to know all about it.

Unlisted shares are also known as over the counter equities. They are not traded in some regulated market like stock exchanges. In fact, when a share gets listed in the share market, companies have to follow very strict norms of SEBI, they also have to make various kinds of disclosures. That’s why many times even good companies don’t get listed in the share market. But it doesn’t mean that those companies are not as good as listed companies.

Now, let us understand how to buy shares of unlisted companies. First way is through promoters. You can directly buy shares from a promoter. But even for this, you need a broker or wealth manager, as he will be able to tell you which company is good and he will also help you in getting a good deal from the promoter.

Other way is to buy a share from current shareholder of a company. In fact, many companies give stock options to their employees. Here also brokers can help you in finding out such companies and employees.

Third way is to buy share before IPO. You can buy a share of a company before it gets listed in the share market. This is called pre-IPO trading. Many investment firms provide this facility through their online trading platform.

Besides these,  you can also buy shares of unlisted companies through portfolio management firms or alternative investment firms. But keep in mind, unlisted companies are not as strictly regulated as listed companies so they are riskier.