Wed. May 1st, 2024

A platform that enables people to purchase and sell shares of firms that are not listed on any stock market is known as an unlisted share trading platform. A tiny number of investors make up the shareholders of these businesses, and their shares are not publicly traded. Platforms for trading unlisted shares offer a market where these shares can be purchased and sold, frequently at transparent prices without significant margins.

 These marketplaces provide a secure and reliable environment for trading unlisted shares, including ESOPs and pre-IPO shares. They also provide staff to help you decide which shares to add to your portfolio and acquire.

Currently, the motilal oswal unlisted share price Home Finance Limited ranges from INR 11.70 to INR 14.50 a share. Depending on the platform and the time of purchase, the pricing may change.

Benefits of trading unlisted shares

Investing in unlisted shares can have several advantages, such as:

  • Unlisted shares have a negotiable price, in large part because there are few buyers and sellers and little liquidity.
  • Risk diversification, such as if you invest in listed shares, unlisted shares may complement your portfolio by offering various risk dynamics. They may be a useful tool for portfolio diversification.
  • Significant expansion perspective: Compared to public shares, unlisted shares have comparable to higher return potential. These equities might eventually go public, which could provide a large gain when they are listed on stock markets.
  • Unlisted shares provide investors the chance to participate in businesses before they become public or hit important growth milestones, giving them First dibs on forthcoming multi-baggers. Early-stage investments in profitable businesses can provide substantial profits, sometimes known as multi-baggers.
  • Chance broadening: Unlisted equity shares, which are a distinct asset class in and of themselves, provide some risk mitigation for investors that actively participate in listed equities markets.
  • High-value funding: Due to the lack of liquidity, shares are frequently undervalued or overpriced for extended periods. An investor can therefore earn big returns on the investment if they can buy shares at a time when they are cheap.

Tax implications of investing in unlisted shares

Tax ramifications of investing in unlisted shares are comparable to those of listed shares. The following are a few tax effects of purchasing unlisted shares:

Tax on capital gains: Unlisted shares are liable to capital gains tax when they are sold by an investor. Whether shares are kept for a long or short period will affect the tax rate. If shares are kept for more than 24 months, they are regarded as long-term capital assets and subject to indexation-advantageous 20% taxation. When held for less than 24 months, shares are regarded as short-term capital assets and are subject to a 15% tax rate.

Securities transaction tax: Unlisted shares are not subject to the Securities Transaction Tax (STT) at the moment of acquisition or sale. Short-term capital gains, however, are taxed at a rate of 15% if STT is paid at the time of sale.

Dividend tax: Unlisted share dividends are taxed at the investor’s marginal income tax rate.

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