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Unlisted Shares FAQs: Complete Investor Knowledge Base

Everything you need to know about unlisted shares in India: legality, taxation, demat credit, safety, and trading rules on PreStocks.in.

1. Are unlisted shares legal in India?

Yes. Buying and selling unlisted equity shares in India is 100% legal under the Companies Act, 2013 and governed by SEBI off-market transfer regulations via CDSL and NSDL depositories.

2. Are unlisted shares safe to buy on PreStocks?

PreStocks protects buyer funds using independent bank escrow accounts. Money is only released to the seller after shares are verified and credited to your Demat account.

3. How are unlisted shares taxed in India?

Unlisted shares held for over 24 months are taxed as Long-Term Capital Gains (LTCG) at 12.5% without indexation. Held for 24 months or less, gains are taxed as Short-Term Capital Gains (STCG) at your applicable income tax slab rate.

4. Can I sell unlisted shares before the company IPO?

Yes. You can sell unlisted shares in the secondary market on PreStocks.in anytime prior to the IPO lock-in period.

5. What happens to unlisted shares after the IPO listing?

Once the company lists on NSE/BSE, your unlisted shares convert into normal listed shares in your Demat account, subject to SEBI 6-month pre-IPO lock-in rules for non-promoter shareholders.

6. What is the difference between unlisted and pre-IPO shares?

Unlisted shares refer to all equity shares of unlisted companies. Pre-IPO shares are shares of unlisted companies that have officially initiated the IPO process by filing a DRHP with SEBI.

7. Can NRIs buy unlisted shares in India?

Yes. NRIs can purchase unlisted shares using NRE or NRO Demat accounts in accordance with RBI FEMA regulations.

8. What is the minimum investment required on PreStocks?

Minimum investment starts as low as ₹10,000 to ₹50,000 depending on the specific unlisted company lot size.

9. How long does Demat share credit take?

Standard settlement occurs within T+1 to T+2 working days after payment confirmation via DIS off-market transfer.

10. Do unlisted shares pay dividends?

Yes, if the unlisted company declares a corporate dividend, the payment is directly credited to your registered bank account linked to your Demat ID.

11. Which Demat accounts are supported on PreStocks?

PreStocks supports all CDSL and NSDL Demat accounts including Zerodha, Groww, Angel One, ICICI Direct, Upstox, and HDFC Securities.

12. How is unlisted share price discovered on PreStocks?

Unlisted share prices on PreStocks.in reflect live indicative bids and asks compiled from verified institutional escrow transactions and secondary market trades.

13. What documents are required to buy unlisted shares?

PAN Card, Aadhaar Card, Demat Client Master Report (CMR/CML), and bank account verification.

14. Why do investors buy pre-IPO shares before IPO?

Investors buy pre-IPO equity to capture valuation growth before public listing, avoiding allotment rationing in oversubscribed mainboard IPOs.

15. Can I transfer unlisted shares to family members?

Yes, unlisted shares can be gifted or transferred off-market to family members via CDSL/NSDL DIS slips.