Listed shares trade on stock exchanges (such as the NSE or BSE in India), whereas unlisted shares are sold privately.
Listed shares provide strong liquidity and pricing transparency. Unlisted shares, on the other hand, have less liquidity and may have less transparent pricing.

You can buy unlisted shares in the following ways:

• From existing shareholders through private transactions.
  Through middlemen or brokers who specialize in trading unlisted securities.
• In pre-IPO placements, shares are sold before the firm goes public.

Yes, trading unlisted shares is permissible in India and other nations. However, the transactions are subject to the Securities and Exchange Board of India’s (SEBI) regulations and recommendations.

Yes, unlisted shares are often riskier, because:
Low liquidity: They are more difficult to sell than listed shares.
Higher volatility: Because prices are not determined by a public exchange, they can fluctuate more in response to supply and demand.
Limited information: Less financial transparency because unlisted companies are not compelled to report publicly as listed companies.

Yes, you can sell unlisted shares, although the process may be more difficult than selling listed shares. You can do:

• Find a buyer privately, usually through brokers.
• Participate in buybacks if your firm offers them.
• Sell when the company is listed, which may provide an exit.

The valuation of unlisted shares is based on criteria including as

• The company’s financial performance.
• Industry benchmarks.
• Market demand.
• Unlisted shares do not have a market price like listed shares, hence their valuation is frequently negotiated between buyer and seller.

Yes, unlisted shares in India are liable to capital gains taxes.

Short-term capital gains: If held for less than 24 months, profits are taxed at your current income tax rate.
Long-term capital gains: Gains held for more than 24 months are taxed at 20%, with indexation.

Yes, unlisted companies may eventually go public via an Initial Public Offering (IPO), allowing their shares to be traded on a stock exchange.

Early Entry Opportunity: You can invest before the company goes public, maybe at a reduced price.
Higher returns: If the company performs well and is listed, the value of unlisted shares may rise dramatically.