Listed vs Unlisted Stocks: Key Differences Every Investor Should Know

Wed, 28 May 2025

5 mins

Unlisted shares

In recent years, unlisted shares have gained traction among investors looking for early access to companies like NSE, OYO, and Swiggy - before they go public. Before investing in unlisted shares, it’s essential to understand how unlisted shares differ from listed ones in terms of liquidity, regulation, transparency, and valuation.

Let’s break down the key differences between listed and unlisted stocks so you can make informed investment decisions.

• What are listed shares?

  Listed shares are securities that are publicly traded on recognized stock exchanges such as the NSE (National Stock Exchange) or BSE (Bombay Stock Exchange). These companies are subject to stringent regulations by SEBI (Securities and Exchange Board of India), offering higher levels of transparency, liquidity, and investor protection.

• What are unlisted shares?

  Unlisted shares are equities of companies that are not traded on any stock exchange. These shares are typically bought and sold through private placements, investment platforms, or over-the-counter (OTC) markets, often referred to as the grey market. They offer early access to high-growth companies but come with added risks due to limited regulation and lower liquidity.

• Key differences between listed and unlisted shares

  1. Liquidity
  Unlisted shares have lower liquidity as they are not listed on stock exchanges. As a result buying and selling these shares require private negotiations, making it harder to convert shares into cash quickly. However, platforms like InCred Premier make such things easy providing a hassle free investing experience.

   

  2. Market visibility
  Listing on a stock exchange increases the company’s visibility and credibility and hence attracts attention of analysts, media and investors. Unlisted shares however have limited visibility, making it harder for retail investors to evaluate them.

   

  3. Access to capital
  Listed companies can raise capital from wide range of investors which in turn can be used for other initiatives like expansion, growth, or research and development. Unlisted shares on the other hand can raise limited capital due to lower visibility and lower reach to investors.

   

  4. Regulation and oversight
  All listed companies have to adhere to the regulations laid out by SEBI (Securities and Exchange Board of India) and must comply with SEBI regulations, regular audits, disclosures, and corporate governance norms.
  
  On the contrary unlisted companies face fewer regulatory requirements and they don’t have to follow same level of reporting and corporate governance as listed companies.

   

  5. Transparency and financial reporting
  Listed shares provide greater transparency since it is mandatory to disclose financial statements, stakeholders, promoter stake etc. Unlisted shares lack such transparency and has fewer guidelines to follow, investors need to solely rely on the company website and media reports

   

  6. Risks
  Listed and unlisted shares both are risky, but unlisted shares are riskier due to low visibility on company performance, less access of financial information and trading in the grey market. 

   

  7. Ownership
  Shares of unlisted companies are not available on public exchanges, and are owned by smaller group of private investors or few institutions. On the other hand, shares of listed companies are available on public exchanges which means anyone can buy or sell them. This results in a large number of shareholders like retail or institutional investors.

   

  8. Market valuation
  For unlisted companies the valuation is typically based on internal assessments, independent valuations which is less transparent and difficult to determine.
  
  However, the valuation of a listed company is determined by supply and demand on the stock exchange making it easy to assess current stock prices.

• To bring it to a close

  Understanding the differences between listed and unlisted stocks is crucial for making informed investment decisions. If you're exploring unlisted opportunities, make sure you're using a trusted platform like InCred Premier to simplify the process.

   

  In case you want to explore unlisted shares feel free to check out our webpage: https://www.incredpremier.com/investment-services/pre-ipo