What is buying unlisted shares ? Pre IPO buying.

There are many companies which are yet to be listed in the stock markets but have fairly good business volumes and command high market share in their area of business. They earn high profits from their business operations. In order to motivate key employees and attract high talent these company gives unlisted shares to their employees, called ESOPs. Upon listing, these companies may command a high value, bring super high profits for the employees and promoters.
However, this listing of shares may take time. Many employees or holder of such unlisted shares, sell these shares by transfer at an agreed price, to someone who want to buy these unlisted shares and wait for it's listing. The middleman (Pre IPO dealers) find such buyers. The shares are transferred to the buyer's Demat Account at an agreed price between the buyer and seller.
Once listed difference between buying cost and listed price is the profits. One good recent example of Pre IPO listing and profit is of Nazara Technologies it becomes India's first online gaming company to list on Indian Stock exchanges The company listed at Rs 1600 and is currently trading at a price of Rs 1900 that's close to 70% up from its issue price. The Pre - IPO Investors, who bought and hold Nazara Technologies stocks (Pre- IPO price band was between Rs 600-700). ROI is close to 3x This is an alternative investment strategy, suitable for investors with high risk appetite and willingness for long waiting periods. The returns can any time be between 3X to even as high as 40X.


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International Finance Corporation (IFC)

International Finance Corporation (IFC), the private-sector investment arm of the World Bank, is evaluating a proposal to lend as much as $100 million (Rs 740 crore) to Hero Fincorp Ltd. Hero FinCorp was created almost 29 years ago and was previously known as Hero Honda FinLease. It took on the new name after Japanese automaker Honda exited its bike joint venture with India’s Munjal family under Hero MotoCorp, which was formerly known as Hero Honda Motors. Previously, Hero FinCorp largely operated as a captive finance arm of Hero MotoCorp. Over the years, it has expanded to lend outside the Hero group ecosystem and started extending loans for two-wheelers and pre-owned cars. It now also offers personal loans and loans against portfolio. Its core business is in the provision of financing two-wheeler loans and micro, small and medium enterprises (MSME) loans to clients. Its consolidated loan portfolio comprises two-wheeler finance (37%), used-car finance (7%), personal loans (11%), home loans (6%), MSME loans (21%) and corporate loans (18%). The IFC funding will allow Hero FinCorp to expand its two-wheeler financing to self-employed individuals or MSME borrowers in the low-income states of India. The company will also deploy three times the IFC loan amount, through its own resources and other sources of funding, towards the same target beneficiaries over the next three years. Delhi-based Hero FinCorp has 3,700 retail touchpoints across 27 states in India. It is part of the Munjal Group. After a split in the ranks a few years ago, Hero FinCorp remained as an associate of Pawan Munjal-controlled Hero MotoCorp. Hero MotorCorp, India’s biggest bike maker, owns a 41.2% stake in the non-bank lender while other investment companies of the Munjal family hold 38.3%. Its external shareholders include Credit Suisse (2%) and two private equity firms ChrysCapital (10%) and Apis Growth (2%), besides the firm’s dealers and employees (6.5%). Hero FinCorp had first raised capital from ChrysCapital and Credit Suisse in 2016. That investment round was worth Rs 702 crore ($105 million) with ChrysCap picking up a 11% stake while Credit Suisse buying 2.5%. At that time the promoters also had pumped fresh money. London-based Apis Partners, the emerging markets financial services-focused PE firm, had come as a new investor in Hero FinCorp a year ago as part of a larger Rs 1,053 crore ($148 million then) fundraise. The money was to flow in via two tranches. This was the first India deal for Apis from the second fund it raised in 2018.


KNOW ABOUT IFC!

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