SBI Mutual Funds Management IPO is now open for subscription, and NSE is running global roadshows this week ahead of a targeted September listing. Unlisted shares are back in focus – and this time, more than one stock is moving. Amid this, let’s understand everything related to unlisted shares – how you can buy them, the risks involved, and how they are taxed.
SBI Mutual Funds Management’s unlisted stock has climbed from Rs 675 in January 2026 to roughly Rs 820 as of July 8, hitting a lifetime high of Rs 870 on June 23, the day its SEBI approval went public, as per pricing sourced by Wealth Wisdom. NSE has run further still: its unlisted stock hit a lifetime high of Rs 2,590 back on June 21, 2025, over a year before its draft prospectus was filed a sign of how early this market prices in a listing. Both offers are sizable: SBI Mutual Fund’s is Rs 10,000-13,000 crore; NSE’s could raise up to RS 28,660 crore (USD 3 billion).
What is an unlisted share?
“An unlisted share is an equity share or CCPS (Compulsory Convertible Preference Shares) of a company that is not listed on any recognised stock exchange such as the NSE, BSE, or MSEI, but is available for buying and selling in the private market,” explains Krishna Patwari, Founder and Managing Director of Wealth Wisdom India Pvt Ltd.
“This category is much broader than many investors assume. It includes pre-IPO companies expected to list in the future, large private companies that have chosen to remain unlisted despite their scale, shares acquired through ESOPs that employees sell before their company goes public, and even companies that were once listed but have since been delisted from stock exchanges. In simple terms, any company’s shares that are not currently listed on a recognised stock exchange but can be legally bought and sold in the private market are generally referred to as unlisted shares,” Patwari added.
How the buying process actually works
It starts with a demat account, the same one used for listed shares, that typically works. A broker or platform then runs KYC, and a price is negotiated rather than fetched, since there’s no exchange; two brokers can quote the same stock differently on the same day. “Payment goes out from the investor’s own registered bank account, and the shares are transferred off-market via CDSL or NSDL, usually within 24 hours to a few business days,” Patwari said.
Why is the rally spreading?
“What we’ve observed is that once a well-known company moves into the pre-IPO stage, interest doesn’t stay confined to that one stock. It tends to spread across the sector and pull in other IPO-bound names as well,” said Patwari.
He points to a second, more mechanical driver behind the current interest: as subscription levels in mainline IPOs have climbed in recent years, allotment sizes have gotten thinner, pushing a section of investors to build positions in the unlisted market instead, ahead of the actual listing.
What to weigh before buying unlisted shares
- No official price – every quote is a private negotiation and might vary on different platforms.
- IPO timelines can slip – “pre-IPO” doesn’t guarantee when, or whether, a listing happens.
- A lock-in follows listing – pre-IPO shares typically can’t be sold for six months after the company lists.
- Tax treatment differs from listed equity: under 24 months, gains are taxed at the slab rate; beyond 24 months, at 12.5 per cent without indexation, with no Rs 1 lakh exemption.
Key takeaway for investors
The current rally can make the unlisted market look like a straightforward trade – buy before the listing, for potential gains. However, experts advise treating unlisted shares as a long-horizon allocation rather than a trade driven by IPO buzz. Independently verify a company’s founders, business model and available financials, since disclosure is thinner than for listed firms, and go in prepared to stay invested for a few years with no fixed exit date. The stocks in the headlines today are the ones closest to listing; everything further out on the timeline is a longer, less certain hold, and should be sized accordingly.
“The biggest challenge in India’s unlisted market is the lack of standardised disclosures and transparent price discovery,” Patwari added.
If companies whose shares are actively traded in the private market are required to publish quarterly financial results, shareholding patterns, corporate announcements, and other key disclosures on their websites, it would significantly improve transparency, strengthen investor confidence, and make the ecosystem safer and more efficient.
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