Unlisted shares have become an attractive investment avenue for those looking beyond public markets. These unlisted shares have gained significant popularity among investors, especially those anticipating future IPOs. One prominent example is the National Stock Exchange (NSE), whose unlisted shares have seen increasing demand amid IPO prospects.
While buying unlisted shares may offer the promise of early-stage investing before a company goes public, selling them can be more complex. The lack of an active trading platform and limited liquidity means you need to be strategic about how and when to exit such investments.
This article explains the various ways to sell NSE unlisted shares, including post-IPO exit strategies, private deals, and over-the-counter (OTC) methods.
The first step is to connect with a potential buyer or a brokerage firm. Once both parties agree on the deal, the seller is required to submit documentation including:
Depending on the company, additional consent or board approvals may be necessary before proceeding.
Once the deal is finalised and documents verified, the seller transfers the unlisted shares to the buyer’s or broker’s Demat account. Upon successful transfer, payment is typically credited to the seller's bank account within 1–2 working days, either online or offline.
Taxation on unlisted shares depends on the duration the investment was held:
If the company eventually gets listed via an IPO, shareholders can sell their shares on stock exchanges after a mandatory 6-month lock-in period. Tax implications in such cases are governed by the Income Tax Act.
While selling unlisted shares may offer attractive returns, liquidating them comes with a unique set of challenges and risks. It's important to be aware of these before entering into any transaction:
Unlisted shares aren’t traded on formal exchanges, so finding a buyer at your desired price can be time-consuming. You might have to sell at a discount or wait longer to exit the investment.
Privately held companies may not publish detailed or audited financials regularly. This makes it harder to assess the fair value of shares and verify the company’s financial health before selling.
Unlike listed stocks, unlisted shares don’t have a daily market-determined price. Valuations can vary widely depending on demand, company performance, and investor interest, leading to pricing ambiguity during a sale.
Since unlisted transactions are off-market, they involve more documentation and may require approvals from the company. Errors in paperwork or legal oversights can lead to delays or even the cancellation of the deal.
Read More: How to Buy NSE Unlisted Shares in India?
Conclusion
Navigating the unlisted share market in India requires a good understanding of compliance, documentation, and taxation. To reduce risks and avoid costly errors, it’s best to work with experienced brokers or consult financial advisors. Doing thorough due diligence before finalising any transaction is crucial for a secure and profitable experience.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jun 4, 2025, 2:52 PM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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