What are Unlisted Shares?
If you have ever bought shares of a company on the NSE or BSE, those are listed shares. The company is registered on a stock exchange, and anyone with a demat account can buy or sell its shares during market hours.
Unlisted shares are the exact opposite.
These are shares of companies that are not listed on any stock exchange. There is no NSE ticker, no BSE scrip code, no live price on your trading app. Yet these shares exist — they are held in demat accounts, they represent real ownership, and they can be bought and sold.
Think of it this way A listed share is like a product on Amazon — publicly visible, instantly buyable, with a live price. An unlisted share is like buying from the company directly, before it opens its online store. The product is real, but the transaction happens privately. |
Real Examples of Unlisted Shares in India
You may have heard of many of these companies. Some are already household names. None of them are (or were) listed on NSE or BSE at the time their unlisted shares were actively traded:
Company | Why People Buy It Unlisted |
NSE (National Stock Exchange) | India's largest stock exchange itself is unlisted. Investors buy it hoping for a future IPO. |
OYO (Oravel Stays) | A globally known hospitality brand. Pre-IPO investors look for listing gains. |
Zepto | One of India's fastest-growing quick commerce companies. High buzz, high demand. |
PharmEasy (API Holdings) | A leading online pharmacy platform that has faced valuation challenges. |
CSK (Chennai Super Kings) | The IPL franchise. Fans and investors alike hold these shares. |
Polymatech Electronics | A semiconductor company. Niche but strategically important sector. |
MSEI (Metropolitan Stock Exchange) | India's third stock exchange, competing with NSE and BSE. |
Who Issues Unlisted Shares?
Unlisted shares come from private limited companies and public limited companies that have not yet listed on a stock exchange. They are issued in several ways:
Employee Stock Option Plans (ESOPs) — Employees of companies like Zepto or NSE receive shares as compensation. Many of them later sell these shares in the unlisted market.
Private placements — When a startup raises a funding round (Series A, B, C, etc.), shares are issued to investors like VCs and PE funds.
Promoter and early investor sales — Original founders or early backers sometimes sell portions of their holding.
Rights issues — Companies sometimes offer shares to existing shareholders at a fixed price.
Who Can Buy Unlisted Shares?
Any Indian resident with a valid demat account, PAN card, and completed KYC can buy unlisted shares. There is no minimum income or net worth requirement, unlike some AIF (Alternative Investment Fund) products.
NRIs can also invest in unlisted shares in India, subject to FEMA regulations and RBI guidelines. However, the process involves additional compliance steps, which we cover in a later module.
Important Note Unlike listed shares, there is no SEBI-regulated exchange for unlisted shares. Transactions happen through registered intermediaries, platforms, or directly between buyers and sellers. This makes due diligence even more important — which is covered in Module 2. |
Are Unlisted Shares Legal in India?
Yes, completely. Buying and selling unlisted shares is a legal activity in India. The shares are held in your NSDL or CDSL demat account, just like any listed share. Transactions are typically done through registered intermediaries.
SEBI, the market regulator, does not directly regulate the unlisted market the same way it regulates stock exchanges. However, SEBI does regulate the intermediaries involved (brokers, depositories) and has issued guidelines on unlisted public companies.
Key Takeaways
Unlisted shares are shares of companies not traded on NSE or BSE.
They are real shares held in your demat account — not derivatives or certificates.
Companies like NSE, Zepto, OYO, CSK, PharmEasy, MSEI, and Polymatech have active unlisted markets.
Any Indian resident with a demat account can buy them.
The market is legal but less regulated than the listed market — due diligence is critical.