Unlisted shares are the shares issued by a company before it signs the Initial Public Offering to get listed on the stock exchange of India. All private companies should comply with certain guidelines and eligibility requirements such as market capitalisation, company size, listing fee, etc. to get listed on the stock exchange. These companies, often in their growing stage, do not have the resources to fulfil the stock exchange requirements.

The most major reason behind this is that there is a very heavy fee charged by SEBI every year for its listing. Number of top-branded companies find this as a lucrative Idea by raising funds without listing. Hence, It becomes fruitful for both, Investor (as an Early-stage/Angel Investor) & Fund-Raiser to participate in this way before the company plans to be publicly traded.

There are various reasons why you should invest in unlisted shares:

• Unlisted shares are complementary to listed shares and the risks involved in unlisted shares are dynamic. The chances of getting a similar or better profit are higher than that of listed companies.
• Unlisted shares offer a much higher return as the shares you bought during the pre-IPO stage at a certain amount has the potential to multiply when it signs the IPO.
• Unlisted shares are less stressful since the prices do not change daily. Due to the limited number of long-term investors, the market price doesn't change as frequently compared to the listed companies.