You own shares in an unlisted company. You have seen a price quoted online, and you are considering selling. But who will buy your shares, what price will you actually receive, and how does the transfer work?
Unlike selling an exchange-listed stock through a trading app, selling unlisted shares usually involves finding a willing buyer and agreeing on the transaction terms privately. The process depends on buyer demand, your holding, transfer eligibility and the arrangements for payment.
This guide explains how to sell unlisted shares in India, what to check before accepting an offer and which records to keep after the transaction.
Can You Sell Unlisted Shares Before an IPO?
A sale before an IPO may be possible when a willing buyer is available and the shares are eligible for transfer. However, ownership does not automatically mean you can sell immediately.
Check whether your holding is subject to restrictions under the company’s articles, shareholder agreements, employee share arrangements or applicable rules. Depending on the circumstances, approvals or other conditions may apply.
If you are unfamiliar with this market, start with our guide to unlisted shares in India.
An expected IPO is also not a confirmed exit date. A company may postpone its plans or remain unlisted, so your selling decision should not depend entirely on a reported listing timeline.
Step 1: Confirm Exactly What You Own
Before requesting a quote, collect the basic details of your holding:
- The company’s full legal name.
- The share class and International Securities Identification Number, or ISIN.
- The number of shares you hold and the quantity you want to sell.
- Whether the shares are held in demat or physical form.
- Any known lock-in, pledge, freeze or transfer restriction.
- Your acquisition date and purchase records.
Use your account statement and original documents rather than relying only on an old message or transaction screenshot.
If the shares are held in physical form, ask the company, its registrar and your depository participant what requirements apply before agreeing to a sale. The process may differ from transferring an existing demat holding.
Step 2: Request a Quote for Your Actual Quantity
An online price is a starting point for research. It is not necessarily an offer to buy your shares.
Ask whether a quote represents:
- A seller’s asking price.
- A buyer’s purchase offer.
- A historical transaction.
- An indicative estimate.
These figures can differ. A price available for a small quantity may also be unavailable for your entire holding.
When requesting a quote, specify the company, share class, quantity and any restrictions. Ask how long the offer remains valid and whether it depends on further verification.
Understanding how to value unlisted shares can help you assess an offer, although a valuation estimate does not guarantee that a buyer will transact at that price.
Step 3: Compare the Net Amount You Would Receive
The highest price per share does not always produce the highest net proceeds.
Consider this hypothetical comparison for a sale of 500 shares:
|
Item |
Offer A |
Offer B |
|
Offered price per share |
₹200 |
₹198 |
|
Gross sale value |
₹1,00,000 |
₹99,000 |
|
Assumed seller-paid transaction charges |
₹2,000 |
₹500 |
|
Proceeds after those charges, before tax |
₹98,000 |
₹98,500 |
This example illustrates quote comparison only. It does not represent current prices, standard fees or a tax calculation.
Offer B produces a higher amount after the assumed charges. However, price is only one consideration: counterparty reliability, payment arrangements and transfer conditions also matter.
Request a written breakdown of all charges and confirm who pays each one.
Step 4: Verify the Counterparty and Written Terms
Before authorising a transfer, establish who is buying the shares and what role any intermediary performs.
Ask for clear written confirmation of:
|
Detail |
What to confirm |
|
Buyer identity |
The legal name of the purchasing person or entity |
|
Security |
Company, share class and ISIN |
|
Quantity |
The exact number of shares covered by the agreement |
|
Price |
Agreed price per share and total consideration |
|
Charges |
Each charge and the party responsible |
|
Payment |
Method, sequence and expected timing |
|
Transfer |
Receiving demat details and required authorisations |
|
Problems or delays |
The agreed process if payment or transfer does not complete |
Do not assume that a private transaction has the same settlement arrangements as an exchange trade.
SEBI has published a caution concerning transactions in unlisted public-company securities on electronic platforms. Review the platform’s status and the protections applicable to the specific transaction.
Step 5: Confirm the Share-Transfer Process with Your DP
Your depository participant, or DP, maintains your demat account and can explain the transfer instructions applicable to it.
CDSL describes delivery instructions for transactions settled between account holders. Its Easiest facility also supports electronic transfer instructions, including off-market transactions, subject to the relevant account arrangements.
Depending on your depository and DP, the available process may involve an approved online facility or a Delivery Instruction Slip.
Confirm the required details directly with your DP, including the receiving account, ISIN, quantity, transaction purpose and consideration information.
Check every entry carefully before authorising it. Never share your account password or sign a blank delivery instruction. These precautions are also reflected in SEBI’s investor guidance.
Step 6: Verify Payment and Transfer Separately
A share transfer and a bank payment are separate events. Confirm how they will be coordinated before proceeding.
Ask:
- When is payment due?
- What conditions must be satisfied first?
- How will payment receipt be verified?
- How will both parties confirm the securities transfer?
- Who will handle a mismatch, rejection or delay?
Do not treat a payment screenshot as confirmation that funds have reached your account. Check your own bank records and review the transaction status through your DP or depository facility.
If escrow or another settlement service is proposed, verify the provider, charges and release conditions independently.
How Long Does It Take to Sell Unlisted Shares?
There is no universal selling timeline.
Finding a buyer is different from processing a transfer after terms have been agreed. Timing can depend on demand, quantity, documentation, restrictions, beneficiary setup and DP processing.
A quoted completion time should therefore explain its assumptions. It should not be treated as a guaranteed deadline for every holding.
Our article on liquidity risks in unlisted shares explains why an exit may take longer than expected.
What If No Buyer Is Available?
You may be unable to sell at your preferred price—or complete a sale at all.
You can request updated indications, ask whether a smaller quantity attracts interest or reassess your intended timing. None of these steps guarantees an exit.
A proposed company buyback or future IPO should only be considered against verified announcements and applicable eligibility conditions. Avoid treating rumours as confirmed opportunities.
Understanding the broader risks of investing in unlisted shares helps explain why the ability to sell deserves attention before purchasing.
Keep Records for Tax Reporting
Retain your acquisition documents, sale agreement, payment records, charge statements and demat transaction confirmations.
Ask a chartered accountant to assess the applicable tax treatment and reporting requirements using your acquisition history, transaction date, residency and circumstances.
Unlisted holdings can also affect which return form you may use. For example, the Income Tax Department’s guidance for AY 2026–27 states that ITR-1 cannot be used by someone who held unlisted equity shares during the relevant previous year. Check the guidance for the assessment year applicable to your transaction.
Frequently Asked Questions
Can I sell only part of my holding?
Possibly, if the buyer accepts that quantity and the shares are eligible for transfer. Confirm the minimum quantity and whether selling fewer shares changes the quote.
Will I receive the price displayed online?
Not necessarily. An indicative price, seller’s asking price and executable buyer offer can be different. Request a quote for your specific holding.
Can I sell immediately after an IPO?
Do not assume so. Applicable lock-ins or other restrictions may affect your holding. Confirm your position before relying on a listing-day sale.
Does holding shares in demat guarantee payment?
No. Demat records relate to the securities holding and transfer. Payment arrangements and counterparty checks still require separate attention.
Discuss Your Holding with Unlisted Mart India
If you are exploring how to buy and sell unlisted shares, begin with accurate holding details and a clear understanding of the transaction terms.
Contact Unlisted Mart India with the company name, quantity and holding format to ask about current buyer interest, required documentation and the process applicable to your shares.
Any proposed sale remains subject to buyer availability, transfer eligibility and mutually agreed terms.
This article is for general educational purposes and is not personalised investment, legal or tax advice. Unlisted securities involve liquidity and counterparty risks. Consult an appropriately qualified professional about your circumstances.