Beware of information paucity and liquidity risk in unlisted shares

Even seasoned investors should bet only 5-10% on such securities

StocX.in, a portal on which investors can transact in unlisted stocks, has launched an index of such scrips called the StocX Private Market Index (SPMI). It will track the prices of more than 30 companies actively traded in the unlisted market. Daily prices will be collected from various dealers.

As the privately-traded market develops and more brokers start offering these securities, retail investors need to make a well-considered decision regarding whether to invest in them.

Early entry advantage

If demand for a stock is high, getting adequate allocation to it in its initial public offering (IPO) is difficult. Hence, enterprising