Comparison Between Listed and Unlisted Shares

Have you ever considered investing in a company but weren’t sure whether shares are listed or unlisted? It’s a common question for many investors. Some companies are all over the news with shares traded daily on the stock exchange, while others quietly operate behind the scenes, offering shares in private markets. But what does that mean for you as an investor?

Whether you’re curious about the opportunities in private investments or trying to navigate the public market, knowing how these two types of shares compare can help you make better decisions. 

This blog will explain listed and unlisted shares, their key differences, their value, and who invests in them. We’ll also cover the investment process, risks, rewards, and tax implications, helping you decide which suits your financial goals. 

Let’s get into it!

What is a Listed Share?

A listed share is a company’s stock that you can buy or sell on a public stock exchange,  such as the National Stock Exchange of India (NSE) or the Bombay Stock Exchange (BSE). When a company decides to go public, it conducts an Initial Public Offering (IPO), offering its shares to the public for the first time. 

Once the IPO is completed, the company’s shares are listed on one or more of these stock exchanges, making them accessible to investors. 

With listed shares in mind, it’s important also to understand unlisted shares.

What are Unlisted Shares?

Unlisted shares are shares of private companies that are not traded on public stock exchanges. You typically need to buy directly from the company or via ESOPs to invest in them. These shares are more complex to value and less liquid, making it difficult to sell them quickly.

After we’ve gone over the basics of unlisted shares, let’s look at the key differences between listed and unlisted shares.