Unlisted shares are private equity shares and are not listed on any stock exchange. They are typically owned by a smaller group of investors, including founders, early-stage investors, and employees. Unlike listed shares, unlisted shares are not publicly traded, and their value is not determined by the market.
Unlike listed companies, unlisted companies are not subject to the same regulatory requirements and reporting obligations. This can result in lower costs for the company and potentially higher returns for investors. And talking about taxation, being a long-term capital asset, these are taxed at a flat 20% with indexation.
While unlisted shares are not as commonly known as listed shares, they offer investors many advantages that make them worth considering.
According to a recent report, unlisted shares have outperformed listed shares by an average of 3.5% per year over the last decade. This means that investors who are willing to take on a bit more risk have the potential to see significant gains.
The main advantage of unlisted shares is the potential for greater control and influence over the company. When you buy listed shares, you are simply buying a small piece of the company and have little say in how it is run.
However, when you invest in unlisted shares, you may be able to negotiate better terms and have a greater say in company decisions. This can be especially appealing to investors who are interested in having a more active role in the companies they invest in.
