In the trading market, investors are the player of trading listed and unlisted shares. Listed securities are shares, unsecured bonds, or any other securities. These are traded through an exchange such as BSE (Bombay Stock Exchange), NSE (National Stock Exchange), etc. After establishing a start-up, businesses go public in an early or later stage. When a private company decides to go public and issue shares, it has the liberty to choose an exchange. To get listed on the stock exchange, it must meet listing requirements. It has to pay entry and annual fees to both exchanges. The requirements vary from exchange to exchange and include minimum equity of the shareholders, share price, and minimum shareholders.
The stock exchanges have regulatory requirements to ensure the trading of only high-quality securities and to uphold the reputation. Due to substantial transparency, the listed securities are considered to be of high quality.
The main difference between listed and unlisted securities is the risk of liquidity.
In India, listed securities are traded through Demat accounts and is an easy procedure. The investors have to pay security transaction tax (STT) for the value of the share. STT is paid on the sale, hence, it brings tax benefits like exemption from the LTCG (Long Term Capital Gain). Moreover, the taxpayers have to pay only 15% tax on STCG (Short Term Capital Gain).
Unlisted securities are the shares and debentures that are traded in the OTC (over-the-counter) market. These securities are less liquid than listed securities and the trading is facilitated by market makers.
Is it safe to invest in unlisted shares?
Unlisted shares’ trading is often underestimated. It has the highest capability to yield more profits in the long run. It is safe and wise to invest in unlisted shares. Unlisted Assets is the safest platform to facilitate the trading of unlisted shares.
Here are some benefits for the companies on getting listed on the exchange:
- Capital access to growing more
Many companies need additional capital to keep the business running and growing. Issuance of shares to the public resolves these constraints. Being listed on the stock exchange, companies can successfully establish their credibility and increase the shareholder base.
- More visibility
If the shares of a company bounce up, it is visible to large-scale investors and institutions. Then the financial institutions support the businesses in compliance with the regulatory norms and ensure transparency.
Listing is necessary to stimulate liquidity. The shareholders get an opportunity to value their investments. With the listing of a company, the shareholders are allowed to transact in the shares of the company. Along with this, they share risks and benefits with the increase in organizational value.
- Boosting employee morale
The public issuance of the shares increases visibility and credibility thereby improving perception among the investors and boosting the morale of the employees. Leading to the hiring of new staff, it provides ESOP (Employee Stock Option Plan) to the employees.
- Financial transparency
The listing provides clearance for the investors to ensure that their targeted share is capable enough to provide great benefits. It brings transparency and efficiency to the operations of the company.
Unlisted Assets is a prominent name among unlisted shares brokers. We have listed potential unlisted shares that have huge return potential. Through their technology-enabled platform, you can buy/sell unlisted shares and ESOPs safely and get liquidity through the offerings.