3 Major Reasons To Choose Unlisted Shares Over Other Investment Options

Investment is a common trend that everyone is following across the globe with the hope of creating a second income source. Indeed, it is an excellent way of utilising your money to multiply it to a further extent. The Indian market is flourishing with ample investment opportunities where you can invest in mutual funds, real estate, crypto, stocks, gold, fixed deposits, unlisted shares, and RBI savings bonds. Out of all these investment options, unlisted shares are a safe and efficient way of earning multibagger returns. According to a recent report, the unlisted share market is consistently growing and is currently valued at $55 billion in India. In fact, unlisted shares have outperformed the listed shares in the last five years by offering up to 500% returns.

In 2023, the trend is expected to continue as investors explore the potential of unlisted shares and diversify their investment portfolios by investing in the grey market. In this detailed write-up, we will walk you through why you should invest in unlisted shares instead of traditional investment options.

What Are Unlisted Shares?

Unlisted shares are private equity and are owned by a small group of investors, such as founders or employees of a company. These shares are not listed on any stock exchange; hence they are not publicly traded, and their value is independent of the market. 

Unlike listed shares, unlisted shares prices are not directly regulated by SEBI (Securities and Exchange Board of India) and are not subject to regulatory requirements. That is why the unlisted shares of a company have the potential to offer higher returns when compared to the listed shares. According to a report, in the last ten years, unlisted shares in India have performed better when compared to listed shares by a margin of 3.5% per year. It clearly signifies the potential of investing in the unlisted share market and seeing significant gains over time.

Furthermore, investing in the unlisted share market lets you have increased control and influence over the company. Investing in unlisted shares in India is like purchasing a small stake in a company. Additionally, investing in unlisted assets allows you to negotiate terms and significantly influence company decisions. It is a win-win situation for the investors who are interested in having an active role in the company they are investing in.

Why Should You Invest In Unlisted Shares?

People occasionally boast about how they made huge money by investing in the unlisted shares of the XYZ company, which is true. Unlisted shares have the potential to offer you multibagger returns over some time, implying that you have good knowledge of how the grey market works. Here are a few more reasons you should invest in unlisted shares instead of traditional investment options.

Diversify Your Investment Portfolio

The unlisted shares market provides you with an array of opportunities to invest in companies currently not listed on the stock exchange. Unlike listed shares, it helps you divide and reduce the significant risks associated with the investment. Unlisted shares are a great way of promoting and supporting budding entrepreneurs and startups lacking the capital. By investing in evolving companies, you fund the companies and contribute to development and growth opportunities. Lastly, these shares might go public anytime in the future and offer better returns.

Undervaluation Due To Low Liquidity

Unlisted shares are illiquid in nature; hence they attract only a specific community of investors who are seeking long-term investment options. Due to the lower demands of the unlisted assets, it invites fewer investors to the opportunity; therefore, the unlisted shares price are generally capped lower. The unlisted share market is full of options where you can go for an undervalued stock that has the potential to offer you huge returns. However, as a retail investor, you need significant market knowledge to identify such wonderful opportunities.

Lower Volatility

Since unlisted shares are illiquid in nature, therefore, they have considerably lower volatility issues. Also, in technical terms, the standard deviation of unlisted shares from the mean value is also very less, making them an excellent choice among investors. However, you need market expertise to efficiently reap the benefits of investing in the grey market. The best part of investing in unlisted shares is the prices don’t fluctuate daily, and their demand and supply are not tracked.

Invest In Unlisted Shares Of Top Performing Companies With Stockify

Undoubtedly, the unlisted share market is continuously flourishing with the potential to become a reliable income source. If you want to join the grey market by investing in unlisted shares, you can count on Stockify, India’s most trusted online broking platform. At Stockify, you can buy unlisted shares of top-performing companies and know about their current unlisted share prices, EBITDA, market valuation, equity per ratio, and more. Connect with the unlisted share brokers to begin a risk and hassle-free investment journey.