Key definitions and concepts you need to know before investing in unlisted shares.
A share repurchase program where the company or a designated party agrees to buy back shares at a predetermined price after a specified period.
Draft Red Herring Prospectus - A preliminary registration document filed by a company with SEBI before going public. It contains details about the company, its financials, and the proposed IPO.
Dematerialized Account - An electronic account that holds shares and securities in digital format, eliminating the need for physical certificates.
Employee Stock Option Plan - A benefit plan that gives employees the right to buy company shares at a predetermined price, often used by startups to attract talent.
A third-party arrangement where funds are held securely until the share transfer is complete, protecting both buyer and seller.
Fair Market Value - The estimated price at which an asset would trade between a willing buyer and seller. Used for tax calculations on unlisted share transfers.
The minimum number of shares that must be purchased in a single transaction. Unlisted shares typically have minimum lot requirements.
A predetermined time during which shares cannot be sold. Common in buyback programs and for anchor investors in IPOs.
The period before a company goes public through an Initial Public Offering. Pre-IPO shares are traded in the unlisted market.
Registrar and Transfer Agent - An entity that maintains share records, processes transfers, and keeps track of shareholders on behalf of the company.
Red Herring Prospectus - The final prospectus filed after SEBI approval, containing the price band and other finalized IPO details.
A market where previously issued securities are traded between investors, not directly from the company. Unlisted shares trade in secondary markets.