Benefits of Selling Unlisted Shares for Emerging Businesses

The new-age businesses have shares that are not listed on the stock exchange for trading. Unlisted investments into shares of private companies are also sometimes referred to as unquoted investments.

The unlisted companies are small but with ambitious plans for rapid growth, they need investment to take their business to the next level. As they are considered high-risk by traditional financial institutions, finance can be hard for them to draw. One solution for this is private equity from individual investors and funds invested directly in the companies. The unlisted company shares are traded in the over-the-market and the shareholders are generally angel investors, hedge funds, and financial institutions. 

How do companies benefit from getting listed?

  • Corporates or entrepreneurs get an opportunity to raise funds for new projects through the listing. The listing of the companies also directs an exit route to private equity investors as well as liquidity to the ESOP-holding employees.

  • Getting listed brings in liquidity and ready marketability of securities for the companies on a continuous basis adding prestige and importance to listed companies.

  • Listing increases a company's ability to raise further capital through various routes like preferential issues, rights issues, Qualified Institutional Placements attract a wide and varied body of institutional and professional investors.

  • On the basis of demand and supply, the shares prices arrive publicly. The stock exchange quotations are generally reflective of the real value of the shares. Thus listing helps in generating an independent valuation of the company by the market.

  • The listing agreement signed with the exchange provides for timely broadcasting of information relating to dividends, bonus and right issues, book closure, facilities for transfer, and company-related information by the company. Thus it provides more transparency and builds investor confidence.

  • The fund lenders accept listed securities as collateral for credit facilities. A listed company can borrow capital from financial institutions easily as it is rated favorably by capital lenders. The company can also raise additional public funds through the new issue market with a greater degree of assurance.

  • If the listing agreement is violated then it entails the delisting or suspension of securities from the rings of the exchange. The listed companies have to follow fair practices to the advantage of investors and the public.

  • The stock exchange collects the daily data in the form of price quotations and others that provide valuable information to the public which can be used for project and research studies. The stock exchange prices act as an index of the state of the economy. Financial institutions, individual investors, and others can make wise decisions before making investments.

  • Stock exchange bye-laws provide explicit rules for subdivision and incorporation of securities as desired by the investors. There are special trading sessions in exchange for converting odd lots into market lots that are arranged by financial and institutional investors. Thus listing provides flexibility to investors in the subdivision and collection of their holdings with speed and diligence.

    Employee Activity Monitoring Software

Unlisted Assets help your business to reach a wider community of investors. We help investors to securely transact their shares and funds for unlisted share buy that further builds an authorized trading community in the OTC market.  

Dofollow

Share
LEAVE A REPLY
Related Post
COMMENTS
  1. author
    27 Aug 2019
    Tomas Mandy

    Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius

    1. author
      27 Aug 2019
      Britney Millner

      Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius

  2. author
    27 Aug 2019
    Simon Downey

    Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius