Understanding Unlisted /
Pre-IPO Investments

An Unlisted/Pre-IPO placement refers to the sale of shares of a company prior to its listing on a public exchange. Investors who purchase these shares do so to potentially receive them at a discount from the future IPO price, should the company decide to go public. These shares are typically offered by existing shareholders of the company (Initial promoters/ PE investor/ESOP holder etc.) or could also be made available through a fresh fund raising by the company through private placement typically to large investors.
For the company, this placement is a means of raising funds and in a pre IPO case also for a better assessment of IPO potential. Overall, Unlisted/Pre-IPO investments provide an opportunity for both the company and investors to potentially benefit.