When it comes to listed shares, it has a safety net and is monitored constantly by the Securities and Exchange Board of India (SEBI). Apart from the risk of lesser regulations, unlisted shares are a financial instrument with a huge growth opportunity.
It is also called over-the-counter (OTC) securities, and you can avail of it for trade on over-the-counter markets. You won’t be able to trade with unlisted companies on any formal stock exchange since smaller or newer firms do not comply with market capitalization, listing fees, etc.
You can catch a glance at the Electrosteel share price if you are looking out for such companies. The company’s shares are not only listed on the Bombay Stock Exchange Limited but also on the National Stock Exchange Limited.
So, if you want to buy their unlimited shares, it is an excellent option indeed. Keep reading to know if the unlisted shares are safe. Before that, you can learn all about unlisted shares.
What are the key features of the unlisted stock?
In recent times, unlisted share markets have risen in popularity. Investors with strong financial health generally buy stocks before their Initial Public Offering (IPO) in the growing companies. Some of them, without proper knowledge, try investing in the unlisted. So, if you read further, you will get a list of features of unlisted stock.
- Not traded on exchanges: You cannot officially trade the unlisted shares of the company on a particular exchange. You have a separate market for trading the unlisted shares. In that market, sellers and buyers operate with the help of dealers.
- Dematerialized: You need a Demat account for your unlisted stocks to be transferred. You can check the status of the shares with the help of the depository participant account.
- Price Mechanism: When it comes to the price mechanism, exchanges are not involved, and it all depends upon the mutual understanding between buyer and dealer.
- Growth factor: Due to the unlisted markets, investors can buy the company’s shares even if the business model is new. Since the pricing is reasonable, you can ensure that the company will grow over time.
- Liquidity issue: One of the growing concerns for investors in the unlisted markets has always been liquidity. Also, investors don’t liquidate their position.
How to buy unlisted shares?
Nowadays, it has become a completely effortless task to buy unlisted shares. Well, the share price is usually decided by the future outlook and market demand. Additionally, the minimum amount that an investment avenue requires is generally higher. Venture capitalists and Private Equity funds buy shares according to their desired quantity.
You must make sure that you choose a reliable seller or dealer for investment. If the investors want to close the deal, they will have to pay a certain amount in their Demat bank account. The dealer will transfer the shares, and the investors can have a look in their depository participant account.
Is it safe to purchase unlisted shares?
Buying the unlisted shares doesn’t mean that the investor will succeed to get their desired prosperity in a few days. It requires trust, patience, and time for the company to grow into a successful venture.
So, you can learn the Electrosteel share price in the unlisted market. But you must ensure that you will not be impatient. When you have a good dealer, you will certainly get justified prices. Overall, if you are an investor, it is definitely safe to buy the unlisted shares. You will avail of the shares after following the required process.