As an investor looking to diversify your portfolio, unlisted shares may seem like an attractive option. However, it's important to be aware of the potential risks involved.
At UnlistedZone, we want to make sure that our investors are fully informed before making any investment decisions. Here are some of the risks you need to be aware of when investing in unlisted shares:
1. Limited Liquidity
Unlike listed shares, unlisted shares are often traded in low volume, with most of the shares held by promoters or long-term investors. This limited supply of shares makes manipulation of the stock price easier, and can lead to issues when it comes time to sell your shares. At UnlistedZone, we only invest in stocks where the fundamentals are excellent and liquidity is good. This ensures that our investors can sell their shares when they need to without facing any issues.
2. Lack of Transparency
In the listed space, companies are required to report their quarterly results and notify exchanges of any major events that may affect the stock price. However, this level of transparency is not always present in the unlisted space. In many cases, we only receive information about a company's performance at the end of the year, making it difficult to know how the company is performing. At UnlistedZone, we provide our investors with regular updates via our website and weekly newsletter, ensuring that they have access to the latest information about upcoming events, results, and other important information.
3. Higher Risk of Fraud
Unfortunately, there are many fraudulent dealers in the market who are looking to take advantage of investors. They may offer unlisted shares at a lower price than other dealers, but then fail to deliver the shares at all. This can result in investors losing their entire investment. At UnlistedZone, we only work with trusted unlisted dealers who have a track record of delivering on their promises. Over the past 5 years, we've completed transactions worth over 300+ crore without any issues to our investors.
One of the common risks in the unlisted market is the selling of unlisted shares at very high prices. Fraudulent dealers may sell shares at inflated valuations in order to earn a higher commission. As an investor, it's important to be careful when buying unlisted shares and make sure that you're getting a fair price. At UnlistedZone, we provide our investors with a fair idea of the pricing of unlisted shares on our website. If the information is not available, investors can reach out to us directly for more information.
5. Lack of Regulatory Oversight
SEBI currently does not directly regulate the unlisted market, which can lead to higher levels of fraud. However, there are certain regulations in place, such as third-party share transfers being prohibited and the requirement for stamp duty and DP charges for every transaction. At UnlistedZone, we always ensure that we comply with all relevant regulations to protect our investors. In conclusion, while investing in unlisted shares can be a good way to diversify your portfolio, it's important to be aware of the risks involved. At UnlistedZone, we take steps to mitigate these risks by only investing in stocks with excellent fundamentals and good liquidity, providing regular updates to our investors, working with trusted dealers, and providing fair pricing information. If you're interested in investing in unlisted shares, we encourage you to reach out to us and learn more about how we can help you make informed investment decisions.