)
An informal network of offline dealers in rarely-traded shares is heralding a quiet change in the way business is done. Earlier, people who had shares in companies that had de-listed from the main bourses (think Cadbury), or in companies that had never listed themselves (think BSE) could only trade through intermediaries who specialised in such securities. Sales made through such networks involved calls made on the phone, or physical visits. Many dealers involved are regional players, with sales and transactions often restricted to the geography they were located in.
Now, another avenue is being explored. “We are India’s foremost dealers for unlisted, de-listed, non-listed, unquoted, pre-IPO, antique shares. Please call,” says an ad from Kolkata dated February 10, posted on OLX - a free online classifieds website - and viewed 22 times.
“We buy all physical/demat shares of all listed/unlisted/de-listed suspended companies, including bad delivery at best rates on spot basis. For more details call or SMS,” says another ad from Chandigarh, posted on Quikr - another online classified portal - on 28 February, and viewed 15 times.
While both OLX and Quikr are usually associated with those looking to sell old furniture and mobile phones, this route allows dealers to reach out to a far wider audience.
There is no charge for posting an ad and reaching out to potential buyers or sellers. There is no commission to the platform for a completed transaction. The platforms even explains how to write an attractive ad and offer tips to get more responses.
Suresh Jain is the proprietor of Opus Finvest and a dealer in unlisted, de-listed and physical shares. He used to issue newspaper advertisements for his business. About a month ago, he began exploring the online classifieds space. He says while the number of actual sales is quite few, there is a shift in terms of customer-connect.
“Earlier, we had to call people. Now I get one or two calls a day,” he said.
He says there are two other online platforms where buyers and sellers seek each other out. One is called ‘Rare Indian Shares’, and the other is called ‘Junk Shares India’. Both are blogs with prices of unlisted securities with one boasting a total of 3,000 posts in its history.
The shift from offline to blog to online classified is not done yet.
The proprietor of Bala Securities is another entrepreneurial broker looking to tap the online space. An accountant with a private firm, he declined to be named because he has only recently set up the business and is yet to quit his full-time job. While he, too, has posted an online classified advertisement, he goes one step further. He plans to run a full-fledged website that will deal exclusively in such shares. He admits he has limited personal experience in the matter, but is hopeful of demand.
“The main thing is Sebi (Securities and Exchange Board of India) decided to close the regional exchanges. There is no platform,” he said.
Sebi introduced criteria including Rs 1,000 crore in turnover and a net worth of Rs 100 crore for stock exchanges that wish to continue operations. Many regional stock exchanges including Madras, Bangalore and Vadodara have subsequently shut down. Trading volumes were virtually non-existent even before.
There are a few others already operating similar websites. This includes one run by Kajaria Securities, and another by Abhishek Securities. Another is goes by the name of Rare India Shares, sharing the same name as the blog.
The end of regional exchanges started with the inception of electronic trading, where orders could be executed on a virtual platform rather than a physical trading floor. Regional exchanges’ shutting down has laid the groundwork for the setting up of other virtual platforms.
ALSO READ: Delisting norms defective, needed changes, says U K Sinha
ALSO READ: Board of Linde India approves voluntary delisting of shares from Calcutta Stock Exchange
