Five Checks Before You Buy an Unlisted Share
A short due-diligence checklist the desk runs on every name before it reaches the board — and that you can run too.
One: the financials. Pull the last two annual reports (MCA filings are public). You want revenue growth, a credible path to profit, and no auditor qualifications. If a company won't share financials, walk away.
Two: the cap table. Who else owns this? A strong institutional register — respected funds, strategic investors — validates the story. Frequent promoter stake sales at falling prices do the opposite.
Three: the listing trigger. Why would this company list, and when? Regulatory mandates (like RBI's upper-layer NBFC rules), filed draft papers, or explicit management commentary are real triggers. Vague optimism is not.
Four: the price versus peers. Unlisted names should trade at a discount to comparable listed companies, compensating you for illiquidity. If the unlisted price implies a premium to listed peers without a clear reason, the margin of safety is gone.
Five: the exit. Know your sell path before you buy — who would purchase this from you, at what spread, and how long settlement takes. In unlisted markets, the exit is part of the investment case, not an afterthought.
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Information and education only — not investment advice. Unlisted securities carry significant risk, including possible loss of capital.