Why this guide (and why UnlistedCorner)
If you hold unlisted shares—founder stock, early employee equity, pre-IPO rounds, or family investments—liquidity can feel opaque. The truth: you have multiple exit doors, each with different timelines, pricing mechanics, compliance needs, and paperwork.
At UnlistedCorner, we don’t just show opportunities; we convert them into clean settlements. Our Vendor System connects verified sellers and buy-side demand, while our Ops Desk pre-checks AoA restrictions, NSDL/CDSL paths, and stamp duty, so transfers clear on the first attempt.
1) IPO — the standard public market exit
What it is: The company lists its shares on exchanges. Existing shareholders may sell primary day via an Offer For Sale (OFS portion inside the IPO) or post-listing when lock-ins end, as per the SEBI ICDR framework and the prospectus. The ICDR regulations explicitly recognize “selling shareholders” offering stock in the public issue.
When it fits
- Business is IPO-ready: audited track record, governance, size, and banker interest.
- You’re okay with SEBI lock-in and staged liquidity via offer documents.
How it works (high level)
- Company appoints bankers, files DRHP/RHP under SEBI ICDR.
- Existing investors may participate as selling shareholders in the public offer (OFS within IPO), subject to eligibility/lock-in.
Pros
- Best discovery in buoyant markets; deep demand.
- Transparent book-building, robust disclosure.
Cons
- Long timeline; market-window risk.
- Lock-ins and allocation limits.
UnlistedCorner angle: We help holders mark to a realistic pre-IPO range (DCF + comps + private prints) and—if you’re not in the IPO OFS—prepare for post-listing windows with easiest execution.
2) OFS (Offer for Sale) — for listed companies
What it is: A stock-exchange mechanism allowing promoters/large holders of listed companies to sell shares to the public in a transparent window. SEBI’s Comprehensive OFS Framework (2023) governs eligibility, size, and process. This is not a pre-listing mechanism; it applies after listing to reduce stake or meet MPS.
When it fits
- Post-listing liquidity for sizeable blocks with exchange-based allocation.
Pros
- Exchange clearing; broad participation; price discovery.
Cons
- Only for listed equities; window-based; regulatory thresholds apply.
UnlistedCorner angle: If your unlisted company has recently listed, we can advise on OFS readiness versus quieter on-screen sells or block windows depending on size and lock-in.
3) Company Buyback (unlisted) — Section 68 route
What it is: The company purchases its own shares from existing holders, governed by Section 68 of the Companies Act, 2013 and applicable rules for unlisted entities (authorisation in AoA, special resolution/board approval, limits, timelines, sources of funds).
Process snapshot
- Authorise in AoA; pass Board/Special Resolution; adhere to limits and 1-year completion timeline.
- For unlisted companies, buyback is typically from existing shareholders on a proportionate basis or from employees/ESOPs as permitted.
Pros
- Company-driven liquidity; can be price-supportive; cleaner cap table.
Cons
- Finite pool (reserves/limits); disclosure/solvency tests; corporate approvals.
- Not always available when shareholders want it.
UnlistedCorner angle: We coordinate holder communications, compile interest, and help companies structure compliant unlisted buybacks—including ESOP-specific windows.
4) ESOP Buybacks — employee-focused liquidity
What it is: Company repurchases vested ESOPs/shares from employees for cash—common between fundraises or pre-IPO—to reward and retain talent without a full exit event. Unlisted companies rely on Companies Act rules for buybacks; policy-wise, ESOP buybacks have become mainstream.
When it fits
- You’re an employee/ex-employee with vested stock.
- Company signals a liquidity event (buyback) aligned with cash flows.
Pros
- Purpose-built for teams; potential premium where business momentum is strong.
Cons
- Company discretion; windowed; volumes capped by policy and reserves.
UnlistedCorner angle: We maintain employee-only windows (subject to company consent/AoA) and can route ESOP holders to company-approved buybacks—or to vetted secondary demand when allowed.
5) Secondary Off-Market Sale — the everyday workhorse
What it is: A demat-to-demat transfer outside exchanges, i.e., you sell your unlisted shares to a buyer, settle off-market, and the depository moves securities after stamp duty is collected.
How to execute cleanly
- CDSL Easiest for online off-market/inter-depo transfers (DSC-authenticated), or a paper DIS via your DP.
- NSDL e-services / SPEED-e also supports delivery instructions and buyer confirmations (pending off-market instructions visible via iWeb).
- Stamp duty: For depository-routed, delivery-based transfers, 0.015% of consideration is collected before execution (typically from the buyer/transferee).
- New 2025 rule (NSDL/private co.): Prior company consent (NOC) must be submitted for off-market transfers of private limited shares; DPs will reject without this. Plan timelines accordingly. (As of now, this requirement is specific to NSDL; always check your leg and depository.)
Pros
- Fastest path; price is negotiable; works for any block size.
- Scales from small employee lots to large strategic secondaries.
Cons
- Documentation discipline matters (CML matches, reason codes, NOC for private co. on NSDL).
- Inter-depository hops can add days.
UnlistedCorner angle: Our Ops Desk pre-builds a deal file (CMLs, ISIN, AoA flags, consent letters), computes duty, and chooses the right rail (CDSL Easiest vs NSDL SPEED-e) so you see predictable T+ outcomes.
6) M&A — cash exits or share swaps via schemes/SPA
What it is: Another company acquires/merges with yours. Shareholders may receive cash, listed parent shares, or unlisted shares of the acquirer as per the scheme of arrangement (Sections 230–232, Companies Act) or a direct share purchase agreement. NCLT-sanctioned schemes outline consideration and timelines.
When it fits
- Strategic buyers; consolidation; restructuring; delisting of a subsidiary.
Pros
- Potentially premium pricing; can deliver full exit.
- If consideration is listed stock, it creates natural liquidity post-swap.
Cons
- Process-heavy; regulatory/NCLT timelines; conditionality risk.
UnlistedCorner angle: We help holders model swap economics, track scheme milestones, and, if you’ll still hold unlisted scrip post-deal, prepare secondary windows to exit.
7) Buy-Sell Platforms — curated secondary markets
What it is: Regulated intermediaries and curated platforms that match buyers and sellers of unlisted shares, help price discovery, and hand-hold off-market execution (KYC, consents, duty, DP coordination). The transfer still uses depository rails (CDSL/NSDL) and 0.015% stamp duty applies.
Why UnlistedCorner
- Vendor System: pre-screened sellers/liquidity providers with verified holdings.
- Depth over dots: We surface firm quotes and gauge fill ratios—so you’re not chasing “ghost bids”.
- Execution muscle: DP slip templates, CDSL Easiest/NSDL SPEED-e walkthroughs, NSDL consent (if private co.) collection, and T-plan monitoring through settlement.
Compliance checklist (copy-paste for your team)
- AoA/Shareholders’ Agreement: Any ROFR/board consent? For NSDL + private co., obtain the company NOC before off-market.
- KYC hygiene: Names on CML, PAN, bank proofs must align; joint holders sign DIS.
- ISIN sanity: Not under pledge/lock-in; quantity available.
- Stamp duty: 0.015% collected before execution (depository).
- DP charges: Separate from duty; confirm your DP’s tariff.
- Cut-offs: Lodge DIS before DP cut-off (often ~4 pm) or use online rails for predictability.
- Evidence pack: Duty receipt, DIS/e-instruction PDF, UTR, credit screenshot.
T+ timelines you can actually plan around
|
Route |
Typical Window |
Notes |
|
Secondary off-market (intra-depository) |
T0–T+2 |
Same-day if pre cut-off; online rails often T+1/T+2. |
|
Secondary off-market (inter-depository) |
T+2–T+5 |
Extra hop adds time. |
|
Secondary (NSDL + private co.) |
Add 1–3 days |
Prior company NOC required by circular NSDL/POLICY/2025/0071. |
|
Buyback (unlisted) |
3–10 weeks |
Resolutions, offer docs, payouts within statutory windows. |
|
ESOP buyback |
1–4 weeks |
Company policy window + payouts. |
|
IPO/OFS |
Months |
Bankers, DRHP/RHP, market window. |
|
M&A scheme |
3–9 months |
NCLT sanction + filings. |
Route comparison (speed • control • pricing)
|
Route |
Speed |
Price Discovery |
Holder Control |
Typical Use |
|
Secondary off-market |
Fast |
Negotiated/market depth |
High |
Employees, small/medium blocks |
|
Buyback |
Medium |
Company-set |
Medium |
Clean cap table, ESOP monetisation |
|
ESOP buyback |
Medium |
Company-set |
Medium |
Employee liquidity |
|
OFS (listed) |
Window-based |
Exchange |
Medium |
Post-listing stake sell-down |
|
IPO (OFS inside IPO) |
Long |
Book-building |
Low-Medium |
Pre-IPO holders within offer |
|
M&A |
Long |
Strategic |
Low |
Control exits, consolidation |
|
Buy-sell platforms |
Fast |
Platform depth |
High |
Continuous liquidity with paperwork support |
How UnlistedCorner turns your shares into settlement
- Signal & scope: You share quantity, target price, and timeline.
- Market depth: We ping verified vendors/buyers, surface firm bids/offers, and show realistic clearing prices.
- Compliance: We gather NSDL private-company consents where needed, verify AoA restrictions, and pre-add beneficiaries for CDSL Easiest.
- Duty & DP: We compute 0.015% duty (buyer-side), confirm DP fees, and prepare the DIS / e-instruction.
- T-plan: You get a precise schedule (e.g., “T0 11:00 DIS lodge; T0 duty; T+1 3:00 buyer credit expected”).
- Closure pack: Duty receipt, UTR, and demat credit screenshot—deal closed.
FAQs
1) Which route is usually fastest for small holders (₹2–25 lakh lots)?
Secondary off-market sale via CDSL Easiest/NSDL e-services is typically quickest if documentation is clean; plan T0–T+2 intra-depository, adding time for NSDL private-company consent where applicable.
2) What stamp duty applies to off-market transfers? Who pays?
Depositories collect 0.015% of consideration before executing delivery-based transfers; it’s generally collected from the buyer/transferee.
3) Can I rely on OFS before listing?
No. SEBI’s OFS framework is for listed shares through exchange windows. In an IPO, existing shareholders may sell via an offer for sale inside the IPO under SEBI ICDR, which is different.
4) Are buybacks allowed for unlisted companies?
Yes—subject to Section 68 conditions (AoA authorisation, resolutions, limits, source of funds) and completion timelines.
5) I’m an employee—what’s the cleanest liquidity path?
If your company offers ESOP buybacks, that’s usually simplest. Otherwise, we can route you to company-approved secondary windows with the right reason code and consents.
6) What changed in 2025 for private-company transfers on NSDL?
NSDL now requires prior company consent (format prescribed) for off-market transfers of private limited shares; DPs will reject instructions without it.
7) How do I avoid secondary-transfer rejections?
Match CML names, use correct DP/Client IDs, ensure ISIN is available (no pledge/lock-in), pay stamp duty upfront, and attach the company NOC for NSDL/private co.