Unlisted Shares
Unlisted Shares
Unlisted Shares - In association with Motilal Oswal, CapitN Bulls now enables members to make investments in unlisted space with due diligence, professional advice and appetite to risk tolerance. Think of unlisted shares as a secret recipe that has been passed down through the generations within a close-knit family. While everyone knows the popular dishes that are served in a restaurant, the unlisted shares are like a secret recipe that is only shared with the members of the family. These shares represent ownership in private companies. They aren't widely known or traded on stock exchanges.
How to buy Unlisted shares ?
Investors can acquire unlisted shares through the following methods:
- Private Equity and Venture Capital: Investing in startups and privately held companies.
- Pre-IPO Market: Buying shares of companies planning to go public.
- Employee Stock Ownership Plans (ESOPs): Some companies offer shares to employees, which can later be sold in the private market.
Benefits
- Possibility of higher returns
- First mover advantage
- Diversification
- Limited impact on market fluctuations
- Flexibility in negotiations
- Limited impact of market fluctuations
What are the legal and tax implications?
Regarding the trading of unlisted shares, the income tax treatment follows a similar pattern as that of other capital assets. The tax rates applicable on the sale of unlisted shares are as follows:
- Long-Term Capital Gains (LTCG) are taxed at a rate of 20% with the benefit of indexation.
- Short-Term Capital Gains (STCG) are taxed based on the individual's applicable slab rates.