Why Invest in Unlisted Shares?
Many young companies grow much faster than mature companies due to their lower base hence they tend to significantly outperform the benchmark returns. However, a lot of this growth happens before the company goes public with an IPO. Hence, participating in such companies in the Growth / Pre IPO stage can provide superior returns to the investor. Buyers need a safe mechanism that gives them access to high quality shares at the best price, provides matching of trade and enables even retail purchases.
Liquidity is one of the key challenges for shareholders of unlisted / Pre IPO shares. An employee holding ESOPs or an investor with a diversified portfolio may want to sell their unlisted / Pre IPO shares to generate cash or to simply book profits. Sellers need a safe mechanism that provides them the best price for their shares, matching of trade and enables even retail trades.
We are a Mumbai based dealer of Unlisted, Pre IPO, and Delisted Shares. We have helped Thousands of individual and institutional clients in buying and selling high quality unlisted shares/Pre IPO Shares. The total transaction value exceeds Rs. 500 crores. Due to our vast reach we are able to match the trades and provide best prices to our clients. To achieve this we often act as bulk breakers or aggregators.
Our superiority stems robust systems and processes which provide smooth and hassle-free flow of agreement backed transactions by ensuring timely delivery of shares and money to the clients.
While investments in Unlisted/Pre IPO shares have the potential of giving high returns, they are also accompanied by higher risk due to a variety of reasons. Investors need to exercise caution while investing in Unlisted/Pre IPO companies. Generally, they should have a minimum time horizon of 4 years and should not allocate more than 30% of their portfolio in Unlisted/Pre IPO shares*.
Are you an unlisted Company?
Did you know? Secondary market liquidity of your shares can get you top talent and more investors
High quality employees and Financial / Strategic investors are crucial to spur the high speed growth of unlisted growth stage companies. Companies spend large amounts of money to attract and retain top talent and to align employee and company objectives. Employee Stock Options (ESOPs) is very powerful tool do so. However, without timely and adequate liquidity, ESOPs may lose its attractiveness in the minds of the employees and hence defeat the purpose of ESOPs. Early stage investors who may have achieved their investment objectives or are nearing the investment time horizon, look for a liquidity event and may push the company to go public prematurely. Both these important types of shareholders will have greater confidence if the company provides them smooth exit at fair value.
We provide customised engagement models with companies to address the above needs. Such engagement has several benefits to the company:
- The company can plan its public offering without liquidity pressures from financial investors.
- Arms length price discovery reduces cost and increases reliability.
- Improves visibility of the company thereby attracting stronger investors.
- Easier administration.
- Cost effective recruitment and retention of top quality talent.
- Better, easier and cost effective communication with shareholders and investors.
- Higher liquidity. Hence no buy-back pressures on the company.
- Fast and smooth transactions.
We provide variety of services to companies so that they can focus on their core competencies.
- Access to reputed RTAs. (Registrar and Share Transfer Agents)
- Dematerialization of shares.
- Connectivity with NSDL and CDSL.
- Liquidity for shareholders.
- Private Equity Syndication.
Secondary Market Exits for Private Equity funds
A clear exit strategy is one of the key focus areas of any Private Equity or Venture investment. Unfortunately, due to uncontrollable factors like the turn of the business cycle, industry disruption, delayed growth, subdued valuations, regulatory compulsions etc; the early investor may not be able to adhere to its original exit strategy and timelines.
If the situation is not conducive for an IPO and the tenure of the fund is approaching expiry; the investor may want to look for alternative opportunities to exit at fair valuations. It is very likely that this situation may not support promoter buybacks as well. It is also possible that the investor may want to exit early if the investment objective is met or better alternatives are available. In both the cases, a strategic secondary market sale may be the best available option.
Discreetly reaching out to large numbers of like-minded buyers is the key to get great valuation and speed of execution. Our platform helps you to connect with a large network of investors to facilitate your exit. If required, we also provide customised due diligence, valuation and representation services.