1. Loss of capital is the biggest potential list when it comes to investing in equities unlisted companies.

2. Since these companies are not listed on an exchange, there is no fair market value that you can track daily, instead a fair price Must reach.

3. Also, since these companies are not listed, the investment is not very liquid and difficult to convert into cash easily and the price will depend on the need of the buyer or seller.

4. Unlike listed companies, information on these companies is not freely available.

5. Unlisted companies attract higher rate of return on investment do.

(Content on this page is courtesy of Center for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Aarti Bhargava and Labh Mehta.)

Spread the love