It is 100% legal to buy or sell unlisted shares through bank account transactions. This practice is quite common among high-net-worth individuals (HNIs). Since unlisted shares are credited to CDSL/NSDL demat accounts just like listed ones, it is also considered safe. From a regulatory perspective, there is no direct supervision by SEBI or RBI over entities dealing in unlisted shares. However, there are a few SEBI directives; the most notable one being that shares acquired during the unlisted stage can only be sold at least six months after listing. In other words, there is a six-month lock-in period for unlisted shares post-listing.

Unlisted shares are not traded through SEBI-registered brokers like Zerodha, UpStox, Angel One, etc. Instead, they are traded through unregistered dealers. It’s important to exercise caution, as there have been instances of fraud (non-delivery of shares after payment) in this market. For retail investors, distinguishing between trustworthy and unreliable dealers can be challenging. Therefore, we have partnered with a few trusted dealers to facilate unlisted shares purchase for our paid clients. Below is the purchase process:

1. Drop an email at info@paulasset.com with Subject Line “Purchase Request of unlisted shares (company name, Qty – )”. Kindly drop separate email for separate stocks. For example, if you wish to purchase 3 different shares kindly drop 3 emails with proper subject line as mentioned. Make sure to mention quantity of desired purchase.
2. We will revert back with the security details, best available stock price as on date, fund transfer banking details & required documents. Unlisted shares are credited in your existing demat account so maintaining an active demat account (with any broker) is must for unlisted shares purchase.
3. Fund must need to be transferred on the same day of receiving the email price quote, else stock price may change. If for any reason the fund transfer is delayed then kindly get confirmation of the stock price on the date of fund transfer.
4. After fund transfer, reply to the same email with all required documents (fund transfer receipt, PAN card copy, CMR copy, cancel cheque OR 1st page of bank statement)
5. Don’t send password protected files & hide your mobile number & email in CMR copy.
6. Once we receive all the documents in order, the shares will be credited in your demat account within the next 2 working days. There are option to verify shares in your demat account which will be communicated with the stock recommendation.

How to obtain CMR copy?

CMR stands for Client Master Report. It is a digitally signed PDF issued by a broker to the client, containing details of the demat account. This document is essential for transferring unlisted shares to the correct demat account. To download the CMR copy, you need to log in to your existing trading account. This is a straightforward process, and all major brokers provide tutorials on how to download the CMR copy or you need to email them to get CMR copy. A simple Google search with “How to download CMR copy in Zerodha/chaoice of broker” will also yield desired result. Here are links from a few major brokers:

Zerodha – Click here for details

Groww – Click here for details

UpStox – Click here for details

If you face any difficulties downloading the CMR copy, please contact/email your broker; they will provide you the same.

Buying Freeze in Unlisted Shares – Just like listed shares, sometimes unlisted shares enters into buying freeze zone due to lack of sellers. This is a rare occurrence but can happen & we may not able to facilitate buying. In such case, one can wait or check with all available external dealers for getting shares at a bit higher rate.

It is NOT possible to purchase unlisted shares of all companies prior to their IPO. There are only about 150-200 companies traded in the unlisted space. These shares are sourced when a company raises substantial funds through private placements before listing. This means that if a company has never raised funds from a broad investor base prior to listing, it is virtually impossible to purchase their unlisted shares (Amul is a good example).

Frequently traded unlisted shares come from companies that have already raised a large sum of funds from the public, and upon listing, they typically turns out mid-cap or large-cap stocks. Small-cap, micro-cap stocks, or those listed in the SME segment are rarely available in the unlisted space and if available often trade at very high lot sizes (ranging from ₹10 lakh to ₹20 lakh). Therefore, most of our recommendations in the unlisted space will belong to the mid-cap or large-cap category, with minimum investment lot sizes of ₹50,000 to ₹2 lakh.

Our goal is to sell unlisted stocks after they are listed to maximize wealth. However, in case of an emergency or in exceptional situations if we recommend selling, you can also sell shares in unlisted market. You can approach any dealer or simply email us with the desired selling quantity. We will check with our channel partners and provide you with a quotation accordingly. Similar to the buying process, we will send you a detailed email with steps to follow. The selling process and fund realization may take 3-4 working days. 

Post listing Selling – Once the shares are listed and the six-month lock-in period is complete, you can sell the shares on NSE/BSE from your existing trading account, just like regular shares. Unlisted shares are credited to your existing demat account, so once they are listed, those shares will automatically reflect in the same trading account.

You will receive all corporate action benefits, such as dividends, bonuses, rights, etc., during the unlisted stage (if applicable). Whether the shares are listed or unlisted, once they are reflected in your demat account (CDSL/NSDL), you are entitled to receive benefits and email communications regarding all corporate actions. Please ensure that your email address is updated in your demat account.

A simple Google search will reveal multiple websites displaying price & other details of unlisted shares. However, price can vary because different dealers can quote different price. There is no such official price like listed peers but you can get a price range. You can follow company specific news from various website but except company website there is no such official platform from where one can guarantee the authenticity of data. For listed companies NSE/BSE are source of authentic data, but nothing such in unlisted space.

Yes, the subscription will provide short, concise, and to-the-point research notes on the recommended stocks. There is no fixed frequency for sharing updates; they will be provided as needed. As long as your subscription is active, you will receive exit and profit booking calls. Access will not remain active if you do not renew after your membership expires. However, if you purchase unlisted shares through us, we will continue to share exit alerts for those shares even after your membership expires. Please note that new stocks and updates will not be available after membership expiration.

There are two types of tax occurrences:

1. Purchase and Sale at the Unlisted Stage:
   • Holding for less than 24 months: Short-Term Capital Gains Tax (STCG) applies according to your tax slab.
   • Holding for more than 24 months: Long-Term Capital Gains Tax (LTCG) at 12.5%.
2. Purchase at the Unlisted Stage but Sale at the Listed Stage (Our Desired Situation):
   • The tax rate is the same as for listed shares.
   • Holding for less than 12 months: Short-Term Capital Gains Tax (STCG) at 20% (STCG increased to 20% from the previous rate of 15% starting June 2024).
   • Holding for more than 12 months: Long-Term Capital Gains Tax (LTCG) at 12.5% (LTCG increased to 12.5% from 10% starting June 2024).

Please consult your tax advisor to stay updated on tax rates and relevant provisions.

First and foremost, never invest 100% of your equity portfolio in unlisted shares. It is advisable to keep around 20-25% of your equity portfolio invested in unlisted shares to balance risk and reward. The remaining 75-80% can be divided into two parts, with each part deployed based on our High Volume Stock Recommendations and Smallcap/Microcap Multibagger Potential Stock Recommendations.

In most cases, the lot size of each unlisted share can range from Rs. 50,000 to Rs. 1 lakh, and in some instances, it can be as high as Rs. 2 lakhs. Considering an approximate investment of Rs. 1 lakhs in each stock, a portfolio of five stocks would require a total investment of Rs. 5 lakhs. Therefore, at the outset, decide on your target total investment value in the unlisted space over one year. Divide that amount into five equal parts and deploy each part according to the stock recommendations. Immediately after subscribing to the service, you will not receive five investment options; the allocation process may take six to twelve months or longer to complete.

Yes, NRIs are permitted to make non-repatriation investments in unlisted shares in India. However, they can also purchase shares on a repatriation basis; however, they must notify the RBI of the transaction. FEMA regulation is also applicable just like other transactions. Simply putting, NRIs can invest in unlisted shares from NRO account without much hassles. Kindly consult with your tax advisor for details.