A quick word on Unlisted vs Delisted Shares:
Unlisted shares – shares which never got listed on an exchange in the first place. Still it is possible that an active secondary market exists in these shares.
Example – Ratnakar Bank and Bombay Stock Exchange both of which are likely to get listed on a stock exchange soon.
Delisted Shares – Shares which were once listed on a stock exchange and hence had high liquidity. The term delisting of shares or securities refers to the removal of a listed company from a stock exchange. When a company is delisted, the shares of that company are no longer traded on that stock exchange.
Example – Essar Steel and ArchPharma Labs.
Many people get confused between public limited companies and publicly traded companies. All publicly traded companies are public limited but not the other way around. Shares of a public limited company whether listed on a stock exchange or not can always change ownership. Any shareholder can sell his holding in full or part to any other person. The only difference is that when shares get listed on a stock exchange this trade becomes a lot easier. Buyers and sellers don’t come face to face and are able to trade using an exchange platform. Apart from making a company’s stock highly liquid, this serves (at least in theory) as a great price discovery mechanism for the business, where market determines the price of a share.
How Market for Unlisted / Delisted Shares Develops
For unlisted shares, secondary market mainly develops as existing shareholders sell their holding in part or full and hence more shareholders emerge on the scene. Mostly buyers and sellers in this case are large fund houses.
New investors and particularly smaller retail investors stay away from buying these shares since they fear that they may not be able to sell these shares easily in the absence of active trading on a registered stock exchange. For this reason, the price at which these shares change hands is usually far less compared to the actual valuation of the company.
For delisted shares, for one reason or the other, a large number of individual retail investors end up holding these shares after completion of the open offer – mostly because investors forget to tender their shares at the time of the open offer. Later they find it hard to sell these delisted shares as liquidity dries up.
Dealers in such shares regularly advertise their willingness to buy at a premium to the price at which these shares were bought by the company in the open offer. This is because valuation of the company may have run up many times since it got delisted. In case the company lists again, a share will be worth a lot more than the price at which it got delisted.
Here again, there could be active trading in secondary market but the bigger opportunity which dealers of such shares seek is to buy these shares from retail shareholders who did not tender their shares at the time when the company made its open offer.
All this of course depends on a multitude of factors including most importantly, the likelihood of the company getting listed again and soon. Other reasons could be – collecting shares from small retail investors and selling a larger chunk to a bigger investor or may be to the promoters of the company at a substantial premium. This typically happens before the company plans to list again or where it plans to sell its entire shareholding in an acquisition or merger.
In practice, those on the know-how of developments – insiders, investment bankers, company’s auditors and legal counsels are the first ones who start buying delisted shares.
Who Sells Delisted Shares?
Without getting into any theory – anyone who did not tender their shares when the company got delisted. There is of course a multi-crore rupee market for shares not listed on a stock exchange that are sold in the secondary market.
Depending on how well the company has done since the time it got delisted there is a substantial addition to the share price, something not many retail share investors pay attention to. Chances are that a company which is planning to list again would have done well enough to take such a step – of listing again.
Nevertheless, many retail shareholders are often happy to find a buyer for their shares at any price they can get and mostly the price at which those shares got delisted.
Should You Buy Delisted / Unlisted Shares?
Be careful!
Remember that most people who buy and sell such unlisted, delisted, non-traded, lowly traded shares are all betting on a future revival. In many cases these are market operators who are aware of a lot more than others. Unless you are part of a syndicate of people whose business it is to deal in such securities, I would say avoid it. There are better ways of making money. Also keep in mind that there is hardly any regulation governing these types of transactions. That said, if you are absolutely certain that something is afoot with the company then who am I to stop you.
And Yes – dealers buy not only delisted / unlisted shares but also pre-IPO shares and shares that are lowly traded. So if you have a large number of shares of a company which though is listed but the shares of which are thinly traded, you may approach such dealers. Many companies have no active secondary market despite being listed on the stock exchange and not more than a few hundred shares are traded on a daily basis.
LEGAL ISSUES
Circumstances Leading to Delisting of Shares
Not all delisting is bad for the company. At times, the promoters may feel that they no longer need public funds and that the company has far higher value than what the market is willing to pay for it. Under such circumstances, they may want to delist the shares.
Compulsory delisting – Permanent removal of securities of a listed company from a stock exchange as a penalizing measure of the stock exchange for not making submissions/complying with various requirements set out in the listing agreement which the company signed with the stock exchange at the time of its initial listing.
Some of the causes for compulsory delisting:
- Non-payment of listing fees
- Non-compliance with listing requirements
- Absence of trading or negligible trading
- Non-redressal of investors’ complaints despite repeated reminders
- Unfair trading practices
- Reduction in the number of public holders of securities
- Non filing of accounts for an unreasonably long period of time
- In case public shareholding falls below 25%, the company has to be voluntarily delisted and it must make an open offer to acquire all outstanding shares.
Voluntary delisting – The company voluntarily decides to permanently remove its securities from a stock exchange.
Some of the causes for voluntary delisting:
- The company has either suspended its business or is under closure or has become a sick industrial company
- Mergers, demergers, amalgamations, takeovers, etc.
- The company no longer needs public funds – remember a listed company has far higher compliance and disclosure obligations.
In case of voluntary delisting, the company must make an open offer to acquire all outstanding shares. For the offer to be successful, the company must increase their holding to 90% of the total shares.
What Happens to Shareholder When Delisting Occurs?
Ownership: it is not mandatory for a shareholders to tender his ownership right i.e. his share. The shareholder can keep holding his share and the company must treat each shareholder with equality with regard to dividends, rights, bonuses and matters related to voting etc. The only thing which changes is that the shareholder will now find it hard to look for buyers in the absence of an actively traded market for his shares.
Decline in Liquidity: liquidity refers to the availability of buyers and sellers in a particular stock. When shares of a company get delisted, they mostly trade in grey market and hence it becomes difficult to match buyers with sellers. In fact, besides helping companies raise funds the other important reason for the very existence of regulated stock markets is to provide liquidity for equity shares thereby helping in valuation and price discovery for the company.
Impact on share price: before shares of a company get delisted, an announcement is made to the market.
- Voluntary delisting: If a company voluntarily delists its shares, it will make an announcement itself, in such cases the price will zoom up since the company will buy its publicly held shares at a hefty premium. I will save the pricing mechanism in such cases for another day – just know that in all cases of voluntary delisting the price will appreciate, and fast.
- Compulsory delisting: in such a case where the company violates its listing requirements or is asked to delist for any other reason, the price will fall quickly. This is the worst news that a company can face – being penalized and asked to get off the exchange. A delisted stock post such an event can be hard to sell. For this reason, most investors will start selling their shares after a delisting announcement at whatever price they can. This causes a complete crash! This is particularly true in case of delisting on account of bankruptcy, where there will be no one left holding the stock.
Fun Fact: Back in the old days when demat services were not available, physical share certificates of bankrupt companies were regularly sold as scrap paper (raddi) and would fetch a good price thanks to their quality and thickness.
About Author
Very informative article indeed. Keep posting.
In case of a voluntary delisting of shares of a strong company with a good track record for dividends, do you think it would be worth holding on to the shares for that purpose only?
Also, for unlisted shares, how would you go about buying these on the secondary market? Would you actually have to know someone who has those shares? For example, how could I get my hands on shares of Ratnakar Bank?
post delisting, a company’s compliance and disclosure obligations come down significantly. In my view – as retail investor (holding only few shares), you should exit before the company delists. Staying invested is good if you are holding a larger stake and the management is likely to take you seriously in decision making.
Search on Google – you will find hundreds of dealers who are willing to buy and sell such shares. Its big business!
Ok, thanks for clearing that up..
Was looking to buy some TMB shares if possible, but it is quoting at a price of 68,000!!
Wants to sell unlisted shares of many physical holding .
I have Usha international share
Dcm Daewoo motors
Orkay Industries share
WHAT ABOUT RELIANCE MEDIAWORKS, ANIL AMBANI LOOTED RS 3 LAKHS 55 THOUSAND FROM ME AND GOT THE SHARES DELITED
I CAN BUY REALIANCE MEDIAWORKS AND RELIANCE BROADCAST 35 PER SHARES
DO CALL 011-41517078
Did u manage to sell it.Heard its relisting soon
please let me know about the future of essar steel share
I would say highly unlikely to list again given that Essar is taking most of its companies of the exchange.
Let me know if you buy/ sell unlisted shares. I sent you my contact details.
Replied to your mail Rajendra. I don’t buy/ sell unlisted shares. Sent you the numbers for a few people who do that.
I HAVE262 SHARES OF RELIENCE MEDIAWORKS ,I WANT TO SELL.
Want to sell delisted shares
Which ones do you wish to sell. You can send me a list on my email ID at – [email protected] . Although I do not buy delisted shares, I could will guide you about a good price you should be aiming at.
Do u purchase Enarai Finance Shares
In reply to Avinash.
if you want to sell any delisted suspended shares
we offer to buy these shares at attractive rates
regards
Rajkumar Jain
9829138563
Hi Rajat, nice article.
Any idea about the capital gain tax structure difference in holding pre ipo shares? I read somewhere that for it to become a LTCA it takes 3 years, rather than the usual 1 year in normal listed company investments. Also in holding pre ipo shares, investors have a one year lock in period from the date of listing.
Thanks!
Hi Benny
Yes – Pre-IPO securities will be locked in for 1 year (for non promoters). If however you are named as a promoter then the lock in shall be 3 years for the Minimum Promoter Contribution (I.E. 20% of post issued share capital). For whatever the promoter holds over and above the 20% – the lock in will be 1 year like for any other shareholder. [see Regulation 35 of ICDR Regulations]
Tax – So long as you sell after 1 year from the date of listing of securities it will surely be treated as long term capital gain.
Thanks for the info. 🙂
Is buying buying or selling of delisted shares legal or permissible?
Is it not the same as dabba trading which is considered illegal? Or is there a difference between the two?
Please clarify.
Of course it is legal. The only difference is that instead of buying on an exchange terminal, in this case you buy off-market, just like you would do it when you buy shares in a private / public company which is not listed on a stock exchange.
Thanks for your reply. If you could clarify my doubts reagrding the following two points
1) Could you explain how it differs from dabba trading which is considered illegal?
2) Steps to be followed when buying delisted shares or shares which are listed but not traded on stock exhanges.
Hi Rajat, really nice and informative article.
I have sent you the list of stocks also on given id.
Can you please look and suggest me.
Sure.
Dear sir,
I bought 100shares of Ankur drugs and pharma through Geojith. I would like to sell these shares in off market. Can you help me to get rid off these shares?
Please send me the price at which you want to dispose the shares and your contact number.
i have suryaagroils -1700 shares
Reliance Anil ambani promoted Adlabs- 5000 shares
DEAR MR JAIN KINDLY POST YOUR LIST OF STOCKS BELOW
I have 10000 shares of Gammon India Ltd whose trading is suspended as the company has not paid annual listing fees.
I have purchased them @10/per share so my total amount invested is approximately Rs. 100000.
Kindly provide me the details of the Buyers who deals in Delisted shares and buy it at good price.
Kindly suggest if their is any buyback offer by the Gammon india Ltd.
Here is a list of stocks which I am having but seems like delisted. Please let me know if you can suggest me something on them.
List of Shares:
Vision Organics
Flyup fashions ltd
Dharnendra Overseas ltd
Aruna Hotels ltd.
Consolidaed fibres and chemicals ltd.
Daewoo motors india ltd.
Chokhani global express ltd.
Pace elcot automation ltd.
Ross murarka finance ltd.
S and S power switchgears ltd.
Falcon watch industries ltd.
Bharat Zinc ltd.
Pan Asia Industries ltd.
Madhu refoils and chemical ltd.
Migweld and machines ltd.
Bahuma Polytex ltd.
Vysali pharmaceuticals ltd.
Redex Protech ltd.
Timurti Fertilizers ltd.
Bharani Oils Ltd
Zillion Pharmachem ltd.
L.D. textile industries ltd.
Protech switchgears ltd.
Information Technologies India Ltd.
Usha Ispat ltd.
Cauvery Software Engg Systems Ltd
Vatsa Corporation Ltd
Atash Industries ltd.
BTW industries ltd
Mardia Steels Ltd
Hariparvat Merryland and resorts ltd
Mardia Chemicals Ltd
Real Value Appliances Ltd.
D.S. Biotech Ltd
Golden Forest Ltd.
Kuber Finance Ltd
Fine Drugs and Chemicals Ltd.
Western Fruit & Vegetable Ltd
Rama Newsprint and Papers Ltd.
Eastern Mining Ltd.
Aachal Alloys Ltd.
Sanghi Polyester Ltd.
Surya Agroils Ltd
Oswal Agro Mills Ltd
Kochar Oil mills Ltd
Jindal Photo Films Ltd
Oswal Agro Furane Ltd
Mayank Hotels Ltd
Samrat Bicycles Ltd.
Orkay Industries Ltd.
Orkay Silk Mills Ltd.
Compact Disc India Ltd.
Ispat Alloys Ltd.
Regards,
Amit Jain
Dear Sir,
I am holding shares in Essar Shipping Ltd. and Essar Steels Limited, which are delisted. Can you guide me how to dispose off these shares now?
Kumar
we purchased physical mode Essar Capital good rate of Rs.70/- each , if you have interest please reply to me.
I am holding 100 shares of Essar Oil which I failed to offer dring delisting. It is said up to one year the company has to buy it at the delisted price from investors. Is it true? pl advise.
Yes that is true. You may be able to sell Essar oil in grey market. There are lots of dealers who would buy good unlisted shares in private companies.
ESSAR OIL DELISTED OFFER CLOSED ON 17 FEB 2017
NO BUYBACK ENTERTAIN BY DISCOUNT RATE IF WANT TO SELL
NEGOCIATE
RAJKUMAR JAIN
9829138563
Hi!
Very informative article..Thanks for knowledge sharing..
I hold 500 shares of delisted Reliance Media works and want to sell them.
Would appreciate if you could help me with this.
Thanks
Piyush Banthia
BUYER OF RELIANCE MEDIA@40 PER SHARES
AND ALSO ANYTPE OF DELISTED NON TRADED SHARES
I am having delisted shares please give your email id i will give the list
Hii i have some delisted shares what to do..
Dear Sir,
Please send to us your share details on my email id we will guide you for best think.
thanks
I am Having Plenty of delisted shares in Demat as well as physical shares can you buy them
Dear Sir,
We are offering very attractive price for your shares held in BHARAT NIDHI LIMITED.
To avail the opportunity, kindly contact us.
Sir I have plenty of delisted shares… can you assist me with I can contact who will buy this
SELL ANY DELISTED SHARES TO US
REGARDS
RAJKUMAR
I would like to sell 100 shares of DCL Polyesters Ltd. The company was taken over by Reliance Industries and is currently delisted. Please advise if anyone is interested to buy the same.
Regards
KB
How to contact u?
Do u sell Dcm Daewoo Motors Limited shares?
Sir i have shares of company Midland Polymer Ltd which was suspended from the share market. Please help me to sell that shares.
Thanks and Regards,
Sandeep Garg
Mb. No. 9996156344
I have 150 share of reliance media I want to sell how I can??? Plz advice
Sold it at 61 a big loss forme of 3.5 lakh
I have Essar steel shares what price u buy
Not buying this.
i hold these not traded shares – austral coke (quantity 9220), aadhar venture(5170), bafna spinning (6000), resurgere mines (900), visu international (8000) and yantra natural (145250)….these stocks are held in demat from in my zerodha account…i want to dispose off these stocks if feasible.
what is the price of RBL Bank share which you can sell.
Not selling RBL right now.
Dear Sir,
If you have Nexus Software, Supreme Telecom and Accurate Export delisted companies please tell i want to buy it
I HAVE A STOCK OF 1500 NEXUS SOFTWARE LTD INE901B01019 I WANT TO SELL THIs contact me on 09586110025.
I am having Nexus software shares in demat form Will you buy them If so At which price and how many shares you can buy
No
Hi,
I have shares of s&s powerswitch gears which is dlisted now. Is it worth to keep it or sell
I want buy kfa (suspended) kingfisher airline share please tell me 9406569669
Sir,
I Registered a private limited company “Rehmus Healthcare Private Limited”. I want to make it India`s largest online portal in healthcare industry which is having customers near about 130 Crore peoples. I know i can do it and i will generate huge profit in it also but i am not having initial capital for that i want to sell shares of my company is it possible to sell shares? Where i can sell shares of my company?? Plese guide me
I am sure if you search more on my blog and site, you will get an answer.
I want to sell 620 Essar Steel Shares . The shares is delited on NSE & BSE
Pl. help .
Also I am not getting any Balance Sheet / communication from Essar Steel, despite of my repeated followup with Essar Steel Customer care.
if you want to sell contact [email protected] – best buyer for your unlisted shares of essar steel.
NO FUTURE OF IT SELL@18 AND TO SWITCH TO SREE RAYALSEEMA ALKALI@20
IN THE YEARS TO COME WILL 3 DIGIT STOCK
RAJKUMAR JAIN
I am holding 161000 Shares of Birla Pacific and 8000 shares of VHCL Industries.Let me know if you are interested
I AM DEALING FREQUENTLY IN DELISTED SHARE ONLY SO PL SEND THE LIST TO ME ALSO
AND TRY YOUR VALUE
REGARDS
RAJKUMAR JAIN
We enjoyed reading your Post. Very informative. In the Unlisted Markets Spreads ( Difference between Buying / Selling rates ) are much higher when compared to Listed Market. So Unlisted markets are for Long Term Investors.
I hold reliance media works share 49 nos, can you suggest me how do I sell those now?
I CAN BUY RELIANCE MEDIA BROADCAST SHARES
Hi I want to sell KFA shares and close my demat account. Is there any option to do so now?
no
I have supreme telecom shares in demat form 100000
Please contact MB =9970376448
Vatsa corporation ltd delisting is bigger scam than vijay Malays case. This company has collected 10,300 crores of public money in 1996. Now in 21 years calculating the amount to double every 5 years then it would be about 160,000 crores (hundreds sixty thousand crores) Now delisting the company and may be pay 50 percent value would mean a clean profit of over 150,000 crore profit.
This is how the general public is being looted in our country.
Will somebody take note and return the money to the investors.
I need to sell the below shares which are not traded on Stock exachange as of now.
Dhanleela invest and trading – 200
parsharti investments limited.- 100
shree astavinayak cine vision – 2400
What is the processes to sell out these shares .
i want buy kfa suspended share plese tell me 9993175275 seller plese tell me call me
hello
what is the price you are offering for kingfisher air shares
Ill charge Rs. 2 to take it from you 🙂 not selling this.
I want to sell Koutons & Glory polyfilms let me know.
I have the following delisted shares. 1) Shaper Chemicals Limited 1000 shares, 2) Tubetec Seamless Limited 700, 3) Mintage Electro Equipments 700, 4) Yenepoya Minerals & Granites 500. All these are in physical form and also 1000 shares in Temptation Foods in demat form. Please guide me to sell the above shares. Awaiting your kind response
Hi anyone can guide me please I have 40000 shares of mtz plyfilms ltd.code 512424 which is delisted.how I can sell it.
I want buy s&s power share plese call me
Please contact me for 307 shares@[email protected]
Hi.. Am holding about 200 companies in physical form. If interested to buy or deal in physical shares, please send an email to [email protected]. I will share the list of companies to the interested people. Thanks and Regards, Sidharath Bohra
Please suggest buyers / brokers who buy physical shares of delisted companies, we have our own personal holding of ~ 170 companies and want to liquidate the same at the earliest.
It would help if you put down the names of the companies….someone will contact you for the ones they are interested in.
Demat Shares
INE124C01016 ADDLIFE PHARMA LIMITED EQ
INE450H01022 ANU’S LABORATORIES LIMITED EQ NEW F
INE544K01026 AQUA LOGISTICS LIMITED EQ NEW F.V.
INE453C01019 BATHINA TECH. EQ
INE604B01027 BHUVAN TRIPURA INDUSTRIES LIMITED E
INE466B01013 CAUVERY SOFTWARE ENGINEERING SYSTEM
INE786B01022 CITY HOSPITALITIES INDIA LIMITED EQ
INE751A01028 COMPUTECH INTERNATIONAL LIMITED EQ
INE909A01014 EUPHARMA LABS EQ
INE511A01018 EUROPEAN SOFT EQ
INE867B01012 INDO-FRENCH BIO EQ
INE569A01024 INFORMATION TECHNOLOGIES (INDIA) LI
INE880C01021 INNOVISION E-COMMERCE LIMITED EQ FV
INE513B01012 KUNAL OVERSEAS EQ
INE552C01018 MANNA GLASS EQ
INE896A01013 MASCON GLOBAL EQ
INE901B01019 NEXUS SOFTWARE EQ
INE696B01015 OJAS TECHNOCHEM PRODUCTS LIMITED EQ
INE964A01019 ORIGIN AGROSTAR LIMITED EQ
INE114B01019 PADMINI TECHNOLOGIES LIMITED EQ
INE181A01010 PUNJAB WIRELESS SYSTEMS LIMITED EQ
INE185B01019 SAWACA COMM EQ
INE355B01018 SCINTILLA SOFT EQ
INE302B01010 SHALIBHADRA INFOSEC LIMITED EQ
INE575B01011 SKYLINE NEPC LIMITED EQ
INE271A01027 SOUNDCRAFT INDS EQ FV RS 2/-
INE296B01014 SUNSTAR SOFTWARE SYSTEMS LIMITED EQ
INE889I01011 TAKSHEEL SOLUTIONS LIMITED EQ
INE049C01023 TOP MEDIA ENT EQ FV RE 1/-
INE491B01011 UNIPORT COMP EQ
INE922D01029 TRINETHRA INFRA VENTURES LIMITED EQ
INE928K01013 DR. DATSONS LABS LIMITED EQ
INE890I01035 FARMAX INDIA LIMITED EQ NEW F.V. RE
INE376A01032 PAN INDIA CORPORATION LIMITED EQ NE
INE211C01037 ARVIND REMEDIES LIMITED EQ NEW FV R
INE803A01027 ATN INTERNATIONAL LIMITED EQ NEW FV
INE486B01011 JAIN STUDIOS LIMITED EQ
INE875I01010 NEXTGEN ANIMATION MEDIAA LIMITED EQ
INE368A01021 SILVERLINE TECHNOLOGIES LTD EQ NEW
INE694A01020 UNITECH LIMITED EQ NEW FV RS.2/-
how many days it will take to get moderation
[email protected]
Hi! I want to sell following de-listed shares.
Moser Baer Quantity: 5792 – Sell price: INR5.- per share
Birla Power Solutions Quantity: 6600 – Sell price : INR4.- per share
C Mahindra Exports – Quantity: 9500 – Sell price: INR5.-
Anyone who is interested to buy these de-listed shares, please contact.
Do you still have these shares?
even i have these shares
I am having essar oil ltd delisted shares what price I can expect now
Hi I have 40000 of mtz polyester films and 8000 of koa tools shares. Both are delisted. So please anybody can suggest me where I can sale it.contact number 8369376793
I have shared of relaince media works and sibar software and sibar media and bathina tech any idea wts d rates going on dis days for dis share and even kingfisher
I want to sell delisted shares of Reliance Media and Reliance Broadcast. Plz tell the price at which these can be sold.
We have delisted company shares of USHA RECTIFIER pvt ltd. What to do to sell or wait or complaint to SEBI or any authorities to get our invested money back?
Hi
I have 1000 shares of Cauvery software & engg ( in paper form) please let me know if anyone is interested. my mobile no is 9840013692
I hold shares of Infinite Computer Solution I Ltd ..pls update me about its current status if I sell today.
I am holding few shares of Birla Power.
How can I get rid of this share?
Please suggest.