SEBI's Warning on Unlisted Shares

Investing in unlisted shares has become increasingly popular, with platforms facilitating transactions for shares from companies that are not publicly traded. However, the Securities and Exchange Board of India (SEBI) has recently warned investors about these platforms, highlighting their potential violations of the Securities Contract Regulation Act. Transactions occur outside SEBI's regulatory purview, leaving investors with little recourse in case of disputes, and the prices for unlisted shares can be arbitrary, often inflated by the platforms as a primary source of revenue. A notable instance of risk is the case of Reliance Retail's unlisted shares, which experienced a drastic price fall, catching many investors off guard, raising further concerns about the safety and transparency of unlisted securities trading.