Direct Equity & Unlisted Investments
Owning businesses directly, with eyes open.
Direct equity lets you own a stake in individual companies, listed or unlisted. It offers control and transparency, but rewards research and patience, and punishes concentration and haste.
Unlisted and pre-IPO shares add access to companies before they list, along with additional risks of valuation and liquidity.
How it generally works
- Listed shares are bought and sold on stock exchanges and held in your demat account.
- Unlisted shares are typically bought through private transactions and transferred to your demat account.
- Pre-IPO holdings generally become tradable only after listing, subject to any lock-in.
Who may find it suitable
Investors with the time horizon and temperament to hold individual businesses, as part of a diversified overall allocation.
Key considerations and risks: direct equity and unlisted shares
- Unlisted shares may be difficult to sell and often trade at wide price spreads
- Pre-IPO investments are generally subject to a lock-in after listing
- Information available on unlisted companies is limited
How ArthaVan can assist
- Reviewing your existing stock holdings for concentration and quality
- Integrating direct equity within your overall asset allocation
- Facilitating access to select unlisted and pre-IPO opportunities
- Explaining lock-in, valuation and taxation of unlisted shares
Frequently asked questions about direct equity and unlisted shares
How are unlisted shares valued?
There is no exchange price, so valuations rely on recent transactions, company financials and comparable listed businesses. Prices can vary widely between sellers.
Should direct equity replace mutual funds?
Rarely. For most investors, direct equity works best as one part of a diversified allocation rather than a replacement for it.
Review my equity holdings.
Start with a private, no-obligation conversation about where you are and where you want your wealth to go.