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Unlocking Opportunities with Unlisted Shares

At Wealue One, we pride ourselves on being pioneers in facilitating investments in unlisted and delisted companies, with a special focus on shares of Pre-IPO companies. This unique offering opens doors for high net-worth individuals, wealth management firms, family offices, and retail investors to engage in opportunities at an early stage, where valuations are still in the process of maturation.

Why Invest in Unlisted Shares?

Early Access to Potential Growth resulting in Value Unlocking:

Wealue One provides exclusive access to the shares of unlisted companies, especially during their Pre-IPO phase. This early entry allows investors to capitalize on the growth potential before valuations reach their full maturity. For Instance, equity shares of ICICI Prudential Life Insurance Ltd. were listed at 330 on Sept. 29, 2016 however; these were being offered for sale at Rs.125 in 2013 in the unlisted domain. Similarly, RBL Bank Ltd. and HDFC Asset Management Co. Ltd, etc. have added a lot of value to Pre-IPO investors

Diversification for Wealth Management:

For high net-worth individuals, wealth management firms and family offices, investing in unlisted shares adds a layer of diversification to their portfolios. It broadens the investment landscape beyond traditional avenues, potentially enhancing overall returns.

Accessible Opportunities for Retail Investors:

Wealue One democratizes access to unlisted shares, making these opportunities understandable and accessible to retail investors. By simplifying the investment process, we empower individual investors to participate in potentially lucrative ventures.

Solutions We Offer

Assistance to ESOP Shareholders and Investors

We assist ESOP shareholders and existing investors in selling their holdings. On the other hand, we enable high-net-worth individuals, wealth management firms, and family offices to invest in unlisted, including Pre-IPO companies. We cater to any buying/selling requirements, including those related to high-growth Pre-IPO companies. Counterparty risk is mitigated through an escrow mechanism.

Transactions with Non-Residents, Including Foreign Nationals

We facilitate transactions with non-residents, including foreign nationals. Adhering to all applicable Indian laws, such as the Foreign Exchange Management Act, 1991, and the Income Tax Act, 1961, we ensure compliance arising from such transactions at our end. Additionally, we can facilitate the sale of shares held in physical (certificate) form.

Earning Opportunities through Referrals

We offer an opportunity for you to earn by referring investors interested in unlisted shares. Your referrals can benefit from our expertise, and you earn through the successful connections you make.

Guidance on Tax Liability

We provide comprehensive guidance to help ascertain the tax liability associated with the sale of shares by an employee or an investor. Our expertise ensures that you have a clear understanding of the tax implications of your transactions.

Secure and Transparent Transaction Process

We manage the buying or selling of unlisted/delisted shares, whether held in dematerialized or physical form, with expertise. Our services cover the entire spectrum, including high-growth Pre-IPO companies. The use of an escrow mechanism helps mitigate counterparty risk, ensuring a secure and transparent transaction process.

Tailored Solutions to suit the needs

Our clients benefit from our tailored financial solutions designed to align with their unique investment objectives. We understand the intricacies of investing and provide strategies that cater specifically to those requirements.

Our Commitment to Your Unlisted Investments

We understand that investing in unlisted shares requires expertise, diligence, and a keen understanding of market dynamics. Our commitment is to guide you through this journey, providing valuable insights, risk management strategies for improved risk adjusted returns, and unparalleled support.

Frequently Asked Questions

Stamp duty, at the rate of 0.015% of the transaction value i.e. the consideration, is payable on the transfer of unlisted shares. The said duty is required to be paid by the seller to his depository (a depository facilitates trading of securities and maintains them electronically, in India there are only two depositories viz. CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited)).

Please click here to understand the step-by-step process for stamp duty payment

Unlisted shares can be transferred through two modes i.e. off-line (or physical) and on-line (or electronic). The off-line mode includes manual execution and submission of the DIS (Delivery Instruction Slip) to the stock broker (DP), the on-line mode includes execution and submission of e-DIS (Electronic-Delivery Instruction Slip) and CDSL Easiest (Though NSDL, through it’s portal, does provide a facility to transfer the shares online, the process is very cumbersome and time consuming and could take many days for it to be given effect to and thus it is advisable for NSDL demat account holders to do it through the DIS).
ESOPs, or Employee Stock Ownership Plans, are schemes that allow employees to acquire shares of the company, for which they are working, at a predetermined price, often below the market value. They are typically offered as part of an employee benefits package. ESOPs work by granting employees the right to purchase shares of company.
ESOPs involve the allocation of stock options to employees. The process includes the grant of options, vesting period, exercise of options, and potential sale of the acquired shares. The details may vary based on the company's ESOP policy.
ESOPs are not taxed at the time of grant. The tax liability arises at the time of exercise of the options i.e. when the shares are transferred to the employee.
When ESOPs are exercised, the difference between the fair market value (FMV) of the shares on the date of exercise and the exercise price is treated as a perquisite and taxed as part of the employee's salary income.
If the ESOP shares in an unlisted company are sold after holding them for more than 24 months from the date of allotment or vesting, the gains are treated as long-term capital gains (LTCG) and taxed at a flat rate of 20% plus applicable surcharges and cesses. If sold within 24 months, the gains are treated as short-term capital gains (STCG) and taxed at the applicable slab rate, the cost of acquisition for this purpose would be the fiar market value (FMV) as mentioned in Q5 above.
Yes, there are certain exemptions available under the Income Tax Act, such as the exemption for gains arising from the sale of ESOPs of eligible startups under Section 54GB. Additionally, individuals can claim deductions under Section 80C for the amount paid to exercise the ESOPs, subject to certain conditions.
Employees are required to report the sale of ESOPs of unlisted shares in their income tax returns. The sale proceeds, along with the cost of acquisition and other relevant details, must be accurately reported. Employers may also provide Form 16 or a similar statement reflecting the details of ESOPs exercised and sold during the financial year.
Any gains arising from the transfer of ESOP shares to family members or through secondary market transactions are taxable in the hands of the employee who received the shares.
Yes, NRIs selling ESOPs of unlisted shares in India are subject to specific tax regulations, including tax withholding obligations by the employer and tax treatment based on residency status and source of income. Additionally, NRIs may be eligible for certain tax benefits or exemptions under the Double Taxation Avoidance Agreements (DTAA) between India and their resident country.
Disclaimer - These FAQs provide an overview of the taxation of sales of ESOPs of unlisted shares in India. However, tax laws and regulations may vary based on individual circumstances and are subject to change, so it's essential to seek professional advice when necessary, furthermore, it is advisable to consult with a qualified tax advisor or chartered accountant who can provide personalized guidance based on individual circumstances and the latest tax laws and regulations.
ESOPs are usually offered to the employees at a discount to the then prevailing fair market value, however, yes, there is always a risk of the employees losing their money with ESOPs in case the company's stock price declines than the exercise price and the perquisite tax as paid by the employees while exercising the said ESOPs. Having said this, the employees also have the potential to profit if the stock price increases.
ESOPs can be a valuable part of an employee benefits package, providing an opportunity for employees to share in the company's success. However, like any investment, they come with risks and should be carefully considered.
In most cases, employees can sell their ESOP shares after the shares have been exercised to liquidate them. However, there may be restrictions on when and how they can sell, depending on the terms of the ESOP plan and subject to the applicable provisions of the company.
If an employee leaves the company, they may be required to sell their ESOP shares back to the company or transfer them to another eligible employee. The specifics will depend on the terms of the ESOP plan and any applicable regulations.