Ever wished you could invest in promising companies before they went public—catching the next Nykaa or NSE story early? That’s exactly what unlisted shares let you do. In India’s 2025 pre IPO boom, with over ₹4 lakh crore worth of companies preparing to list in the next two years, early-stage investors are quietly earning 2x–5x returns even before IPO day.
At Rits Capital, we’ve helped individual and institutional clients invest smartly in this exclusive market, managing over ₹500 crore worth of unlisted and pre IPO opportunities. Here’s everything you need to know before taking the plunge.
What Are Unlisted Shares?
Unlisted shares are equities of companies that aren’t yet traded on public exchanges like NSE or BSE. These include:
- Pre-IPO companies such as startups and private businesses preparing for listing.
- Subsidiaries of listed firms (e.g., finance arms or tech ventures).
- ESOP or promoter holdings available through secondary transactions.
Buying unlisted shares means getting in early—before institutions and retail investors bid up prices once the stock lists publicly.
As of 2025, India had 1,200+ active unlisted companies, spanning fintech, renewable energy, manufacturing, and EV sectors. The average return from quality pre-IPO shares has been 28–35% CAGR over the last 3 years, according to Rits Capital’s internal research.
Why Invest in Unlisted Shares
- Early-stage growth access—Capture valuation rerating before IPO, when large institutions enter.
- Diversification—Add off-market companies to balance traded equity exposure.
- High return potential – NSE itself delivered over 4x gains for early investors after listing milestones.
- Limited volatility—No daily price swings make it ideal for longer holding horizons.
- Portfolio fairness—Invest in emerging leaders unavailable on exchanges.
For many Rits clients, unlisted equity now accounts for 10–15% of portfolio allocations, enhancing return consistency while reducing market-correlated risk.
Step-by-Step: How Rits Capital Helps You Buy Unlisted Shares
Unlike listed equities, which you can click to buy on a trading app, unlisted shares require a structured process. Here’s how we simplify it:
1. Investment Discovery
Our analysts identify opportunities through financial due diligence, private placement data, and verified company filings. We typically shortlist firms with:
- Revenue above ₹100 crore
- Positive EBITDA or path to profitability
- Upcoming IPO/strategic exit visibility
Each candidate undergoes Rits Capital’s proprietary EScore Model, assessing earnings quality, scalability, and regulatory compliance.
2. Pricing and Valuation
Unlisted shares don’t have public quotes. We determine fair value using multiple methods:
- Peer P/E ratio analysis.
- Pre-IPO discount models (usually 20–40% below estimated IPO pricing).
- Cash flow projections validated by our advisory desk.
This helps our investors avoid overpriced deals and identify value entries.
3. Due Diligence & Documentation
Every transaction is SEBI-compliant. Rits Capital ensures:
- KYC verification (PAN, Aadhaar, Demat).
- Seller authenticity validation via CDSL/NSDL depository checks.
- Board resolutions confirming transfer eligibility.
4. Execution & Settlement
Once approved, investors receive:
- Verified share purchase agreement.
- Escrow-based fund transfer for absolute transparency.
- Shares are credited directly into your Demat account within 2–5 business days.
Our compliance systems ensure zero counterparty risk.
5. Monitoring & Exit
We track every investment’s progress—earnings growth, IPO timeline, or buyback routes. Once the company lists, your unlisted shares automatically convert into listed holdings, ready for trading.
How Rits Capital Adds Value
- Trusted Network: Partnered with verified corporate sellers, fund houses, and early investors to source genuine holdings.
- Research Depth: 50+ in-house analysts tracking India’s pre-IPO market—covering valuations, regulatory updates, and IPO calendars.
- End-to-End Service: From deal sourcing to demat transfer, we manage the entire process.
- Regulatory Compliance: Every transaction is executed per SEBI and Companies Act norms, ensuring investor protection.
- Performance Record: Average client IRR of 25%+ on closed unlisted positions since 2023.
What’s the Right Investment Size?
Retail investors typically start small—₹1–5 lakh. UltraHNIs and family offices often scale up to ₹50 lakh+ per company for meaningful exposure. At Rits Capital, we advise capping unlisted investments to 15–20% of your portfolio, diversified across 5–10 companies.
Our weekly insight reports alert clients to attractive entry points and exit valuations.
Taxation on Unlisted Shares (India 2025)
| Holding Period | Type | Tax Rate | Notes |
| < 24 months | Short Term | As per income slab | Sale before 2 years |
| ≥ 24 months | Long-Term | 12.5% on gains above ₹1.25 lakh | With indexation benefits |
Dividends are taxed at investors’ slab rates. Rits Capital provides tax-ready reports compatible with CA filings and income disclosure.
Read More: IPO vs Unlisted Shares Investment
2025 Market Snapshot
- Average unlisted secondary price growth: 32% YoY
- Major traded names: NSE, Hexaware Tech, Tata Tech Finance, Zepto, HDB Financial
- Upcoming IPO pipeline: 180+ by FY26
- Total unlisted transactions: ₹5,000 crore in FY25
(Sources: MCA filings, Rits Capital internal data)
Risks to Manage
Unlisted shares can multiply wealth—but only if handled prudently. Key risks include:
- Illiquidity: Resale might take weeks or months.
- Valuation uncertainty: No daily market quote.
- Regulatory delays: IPO approvals take time.
Rits Capital mitigates these with verified sellers, structured deal rooms, and liquidity planning through our trusted investor network.
Final Thought
Unlisted shares are India’s fastest-growing wealth avenue—where informed investors quietly build fortunes before the crowd arrives. But it’s not about luck; it’s about due diligence, valuation discipline, and timing.
Rits Capital simplifies that complexity—identifying the right companies, securing fair valuations, ensuring SEBI compliance, and managing your exit when the timing’s right.
If you’re ready to unlock early access to India’s next market leaders, let Rits Capital guide your journey from discovery to demat.
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FAQs:
1. Are unlisted shares legal to buy?
Yes. Buying or selling unlisted shares via registered intermediaries is fully compliant under SEBI and the Companies Act.
2. How long does it take to receive shares?
Typically 2–5 business days after trade confirmation and escrow payment.
3. Can NRIs invest in unlisted shares?
Yes, through NRO demat accounts under FEMA rules. Rits Capital assists NRIs in complete documentation and repatriation handling.
4. How is return generated?
You profit when the company lists at a higher valuation or conducts a buyback/secondary sale. Average listing premiums in 2025 were 40–80%.
5. What if a company doesn’t go for an IPO?
You can still exit through secondary resales arranged by Rits Capital’s liquidity desk.
6. Minimum investment required?
Most opportunities start from ₹1 lakh. Investors can scale as opportunities mature.
7. Why choose Rits Capital?
We combine research depth with transaction security. Every investment is backed by transparent valuations, legal documentation, and real-time demat delivery.