Investing in pre-IPO and unlisted shares in India presents a unique opportunity for investors looking to access high-growth companies before they go public. These investments offer the chance for significant returns, but they come with higher risks and less liquidity than public stocks.
In this article, we will explore what pre-IPO and unlisted shares are, why you might consider investing in them, how to get started in India, and how to avoid common pitfalls.
We’ll also cover key factors for choosing the right platform and address frequently asked questions to help you make informed investment decisions.
What are Pre-IPO and Unlisted Shares?
Pre-IPO shares are the shares of a company that are sold before it goes public through an Initial Public Offering (IPO). These shares are typically offered to institutional investors, venture capitalists, private equity firms, and sometimes high-net-worth individuals (HNIs).
Unlisted shares refer to shares of companies that are not listed on any stock exchange. These are generally offered by startups, private companies, or firms in the process of growing but are yet to go public.
Best Platform To Invest in Pre IPO and Unlisted Shares in India
Here are some of the best platforms in India that offer access to pre-IPO and unlisted shares:
1. InCred Money
InCred Money is an all-in-one platform for investing in Pre-IPO, Unlisted Shares, Bonds, Market-Linked Debentures (MLDs), and Fixed Deposits. Launched to simplify investing, it serves over 1.5 lakh users with an AUM of ₹1,350 crore. The platform focuses on offering a user-friendly interface, expert guidance, and diverse investment options for individuals looking to diversify their portfolios.
Investment Opportunities
InCred Money allows investments in Pre-IPO and unlisted shares from notable companies, providing opportunities to invest before public listing. The platform also offers Bonds with returns of 10-12% p.a., Market Linked Debentures for market-based returns, and Fixed Deposits with up to 9.10% interest. Investors can diversify across various sectors and asset classes effortlessly.
How to Invest in Pre IPO and Unlisted Shares with InCred Money
Sign Up & KYC: Register on InCred Money and complete KYC in 2 minutes.
Select a Company: Choose the pre-IPO or unlisted company you wish to invest in.
Choose Units: Enter the number of shares you want to buy.
Payment: Select your payment method and complete the transaction.
Also Read: InCred Money Refer and Earn Program
2. UnlistedZone
UnlistedZone, founded in 2018, is one of India's fastest-growing platforms for buying and selling unlisted shares. It has served over 1 million users, offering a trusted space to invest in pre-IPO shares of companies like Ola, Swiggy, Tata Tech, and PharmEasy. The platform is designed for investors seeking to invest in emerging businesses before they go public.
Investment Opportunities
UnlistedZone provides access to a range of pre-IPO and unlisted shares, including top startups and established companies across various sectors. Notable companies include Ola, Swiggy, Tata Technologies, Chennai Super Kings (CSK), and PharmEasy. The platform helps investors identify and invest in high-potential unlisted shares at early or growth stages.
How to Invest in Pre IPO and Unlisted Shares with UnlistedZone
Sign Up: Create an account on UnlistedZone and complete your KYC process.
Browse Shares: Explore the available pre-IPO and unlisted shares on the platform.
Live Prices: Check live prices and historical data to evaluate investment opportunities.
Buy/Sell: Select the shares, enter the quantity, and submit your request to buy or sell.
Confirmation: UnlistedZone’s team will contact you to finalize the transaction.
3. UnlistedKart
Founded to democratize access to high-growth investment opportunities, UnlistedKart is a SEBI-registered platform that specializes in pre-IPO and unlisted shares. The platform caters to retail investors, HNIs, Ultra HNIs, family offices, and institutions. With a mission to make private equity accessible, UnlistedKart offers a transparent, research-driven approach to investing.
Investment Opportunities
UnlistedKart provides access to three main investment categories:
Pre-IPO Shares: Add pre-IPO equity to your portfolio for the potential of post-IPO returns and guaranteed stock allocation.
Unlisted Shares: Buy and sell unlisted stocks easily, with accessibility similar to listed stocks.
ESOPs: Invest in Employee Stock Ownership Plans (ESOPs) of top companies, creating long-term value for both investors and businesses.
The platform has facilitated over ₹250+ Cr. in transactions and focuses on sectors such as tech, healthcare, and consumer goods.
How to Invest in Pre-IPO and Unlisted Shares with UnlistedKart
Register & Verify: Open an account by submitting your PAN card, DEMAT account details (NSDL/CDSL), CML/CMR, and a canceled cheque.
Research & Advice: Contact UnlistedKart for research reports or seek external financial advice. Their specialists will provide neutral reports to guide your decision.
Place Order: Once you're confident in your choice, place an order through the app or contact their team directly.
Receive Shares: Shares will be transferred to your DEMAT account, and all transactional details will be visible on your dashboard.
UnlistedKart ensures transparency and security, with no minimum investment requirement, empowering investors at every level.
4. Planify
Planify is the largest platform for investing in startups, pre-IPO shares, unlisted shares, and unicorns. Launched to connect investors and entrepreneurs, Planify offers a seamless experience for equity fundraising. Trusted by over 20,000 accredited investors, it focuses on angel investing, fundraising, and ESOP liquidation.
Investment Opportunities
Planify specializes in Seed, Pre-Series A, and Series A funding, with over 300 exclusive opportunities and 34+ successful exits. Notable sectors include startups and pre-IPO companies such as SMEs, unicorns, and innovative ventures. The platform has facilitated ₹100 Cr. in angel investments and ₹150 Cr. in pre-IPO transactions.
How to Invest in Pre IPO and Unlisted Shares with Planify
Sign Up: Create an account on Planify and complete your KYC.
Browse Investments: Explore exclusive opportunities on startups, pre-IPO, and unlisted shares.
Real-Time Price Discovery: Check live prices and research reports for informed decisions.
Invest: Select the investment, enter the amount, and complete the transaction securely.
Track & Exit: Monitor investments and exit at the right time with expert guidance.
5. Precize
Precize is an alternative investment platform that offers access to pre-IPO shares and global trade finance opportunities. Investors can easily research and invest in unlisted shares at competitive prices through Precize’s website and mobile app.
The platform also supports seamless liquidation of pre-IPO shares both before and after the company goes public. Before an IPO, investors can sell their holdings in the unlisted market with the help of Precize’s selling specialists. After the IPO, shares can be sold following the SEBI-mandated six-month lock-in period.
Investment Opportunities
Precize offers investors access to unlisted equity shares, also known as pre-IPO shares. Additionally, Precize's Private Credit feature allows participation in global trade transactions, offering stable returns of 13-15% XIRR over short-term periods of 30-60 days. Investors can choose from a range of opportunities in private markets, backed by in-depth research reports.
How to Invest in Pre IPO and Unlisted Shares with Precize
Select a Company: Research and choose the unlisted company you wish to invest in.
Place an Order: Add funds to your account and place an investment order through Precize’s app or website.
Receive Shares: Once the transaction is complete, the shares are deposited into your depository account.
How to Invest in Pre-IPO and Unlisted Shares in India?
Eligibility Criteria
Basic Requirements
Investing in pre-IPO and unlisted shares requires some level of financial knowledge and risk appetite. Here are the basic eligibility criteria:
Financial Knowledge: You should understand the financial health of companies and the overall market.
Risk Appetite: Pre-IPO and unlisted shares are considered high-risk investments. Be prepared for the possibility of losing your entire investment.
Investment Process
Step-by-Step Guide to Buying Pre-IPO and Unlisted Shares
Here’s a step-by-step guide to purchasing pre-IPO and unlisted shares:
Choose a Platform: Select a reliable platform that facilitates investment in pre-IPO and unlisted shares. Several platforms and brokers specialize in offering these shares to retail investors.
Create an Account: Register on the chosen platform by providing your details like name, email, phone number, and financial credentials.
Complete the Verification Process: Platforms often require you to complete a KYC (Know Your Customer) process, which includes submitting documents such as your PAN card, proof of address, and bank account details.
Browse Available Opportunities: Once verified, explore the available pre-IPO and unlisted shares on the platform. These will include details such as the company’s financials, valuation, and expected IPO date.
Make Your Purchase: Select the shares you wish to purchase and proceed with the transaction. You can invest using net banking, UPI, or other payment methods provided by the platform.
Receive Shares in Demat Account: After the purchase, the shares will be credited to your Demat account.
Documentation and Platform Registration
PAN Card: Required for identification purposes.
Proof of Address: Aadhar card, passport, or utility bills.
Bank Details: For fund transfer.
Demat Account: The purchased shares will be stored in your Demat account.
Minimum Investment Amount
The minimum investment in pre-IPO and unlisted shares can vary. In India, the typical minimum investment ranges from ₹50,000 to ₹2 lakhs, depending on the platform and the company offering the shares. Some platforms may allow smaller investments, particularly in startup equity.
Why Invest in Pre-IPO and Unlisted Shares?
Investing in pre-IPO and unlisted shares can be a way to earn high returns as the companies you're investing in often have strong growth potential. Here are some reasons to consider investing:
Early Entry: You get an opportunity to invest in a company before its valuation spikes during an IPO.
Potentially Higher Returns: If the company performs well after listing, the shares you bought at pre-IPO prices may appreciate significantly.
Portfolio Diversification: Pre-IPO and unlisted shares can add diversity to your investment portfolio.
Access to High-Growth Companies: Many high-growth companies prefer staying unlisted for a long time, offering attractive opportunities for early investors.
However, it's important to note that these investments are generally illiquid, and the risks are higher than with publicly listed stocks.
Common Mistakes to Avoid in Pre-IPO and Unlisted Share Investments
Lack of Research: Don’t invest blindly in a company just because it’s popular or backed by big names. Perform due diligence.
Ignoring Liquidity Issues: Unlisted shares can be difficult to sell, and there may not be a ready market. Understand the liquidity risks.
Misjudging Valuation: Overpaying for pre-IPO shares due to hype can reduce your returns. Always evaluate the company's current and future valuation.
Investing Without a Clear Exit Strategy: Have a plan for when and how you will exit the investment, especially considering lock-in periods.
How to Choose the Right Platform for Pre-IPO Investments
When selecting a platform for investing in pre-IPO and unlisted shares, consider the following factors:
Reputation and Track Record: Choose a platform with a strong reputation and experience in facilitating pre-IPO investments.
Variety of Offerings: Check the number and quality of investment opportunities available.
Transparency: Look for platforms that offer clear information on fees, commissions, and the risks involved.
User Experience: A user-friendly interface and a seamless investment process are essential.
Regulatory Compliance: Ensure the platform is registered with SEBI (Securities and Exchange Board of India) and follows all regulatory norms.
FAQs
Q: Can retail investors invest in pre-IPO and unlisted shares?
A: Yes, retail investors can invest through specialized platforms or brokers, but they must meet basic financial and risk criteria.
Q: What are some best platforms to invest in pre-IPO and unlisted shares in India?
A: Top platforms include InCred Money, UnlistedKart, Planify, UnlistedZone, and Precize.
Q: How can I sell unlisted shares?
A: You can sell through over-the-counter (OTC) deals, directly to buyers, or via brokers. Some platforms also facilitate resales.
Q: What are the key differences between IPO, Pre-IPO, and Unlisted Shares?
A: The key differences between IPO, Pre-IPO, and Unlisted shares lie in their availability and trading status. IPO shares are sold to the public during a company’s Initial Public Offering. Pre-IPO shares, on the other hand, are offered to select investors before the company goes public. Unlisted shares refer to those that are not traded on any stock exchange and remain privately held.
Q: Are returns guaranteed on pre-IPO investments?
A: No, returns are not guaranteed and depend on the company's post-IPO performance.
Q: What is the lock-in period for unlisted shares?
A: Typically 6 months post-listing for pre-IPO shares, though it varies based on the company's policy.
Q: Can NRIs invest in pre-IPO and unlisted shares in India?
A: Yes, NRIs can invest, but they must comply with RBI and SEBI guidelines.