Answer

HNI wealth · Unlisted Equity

Pre-IPO investing: how to access, price discovery, and risks

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  1. Facts

    Pre-IPO investing means buying shares in a company before it lists on the stock exchange, typically 6-24 months before IPO. Access points: direct from company (rare), ESOP secondary market (selling employee), broker platforms (Alteria, INDmoney Pre-IPO, Unlistedzone).

  2. Provisions and law

    • SEBI (LODR) | FEMA | IT Act, Sec 45

  3. Analysis

    Pricing: No official market price. Typically priced at: last funding round valuation (±20%), or a multiple of projected earnings/revenue. Verify the actual last round valuation, many platforms inflate pre-IPO prices. Key risks: IPO may not happen (or gets delayed years). Company may be overvalued. Shares may be "locked-in" for 6 months post-IPO. No liquidity until listing. Lock-in post-IPO: Shares held before a certain date may be subject to SEBI lock-in for 6 months from IPO date for pre-IPO shareholders (not retail, specifically shares from allotment).

  4. Conclusion

    Talk to a Savvy for the exact next step on your case.

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ODI filings for Indian residents investing abroad, Form FC

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