How to Check the Value of Unlisted Shares in India

There is no single official price for an unlisted share, so you check its value by comparing several price signals (dealer quotes, recent funding rounds, ESOP buyback prices and valuation reports) and then testing them against the company’s own numbers and its listed peers. A fair estimate is usually a range, not a figure, and it should include a discount for the fact that you cannot sell the share easily.

This guide covers where unlisted prices come from and how reliable each one is, what to pull from MCA filings and annual reports, how to compare the company with listed peers on P/E and P/B, how to apply an illiquidity discount, and a fully worked rupee example. It ends with red flags and a short checklist.

Why unlisted shares are hard to value

A listed share has a live price set by thousands of buyers and sellers on an exchange. An unlisted share changes hands privately, often through a dealer, and only a handful of trades may happen in a month. The price you see on a website is the dealer’s asking price, not the result of an open auction.

Information is also thinner. Unlisted companies do not publish quarterly results, and many file their annual accounts with the Registrar of Companies months after the year ends. So you are usually valuing the business on numbers that are six to eighteen months old. Our guide to unlisted shares covers the basics of how these shares are bought and transferred.

Where unlisted share prices come from

Four sources give you a price. Each has a bias, so the aim is to collect as many as you can and see where they agree.

Dealer and platform quotes

Dealers buy shares from employees and early investors and resell them at a mark-up. Their website price is what you would pay, and the price they offer to buy back is lower. Ask at least three dealers for both a buy and a sell quote. The gap between the two (the spread) tells you how liquid the share really is; a wide spread means you would lose a large slice immediately if you had to sell.

Funding rounds and share allotments

When a company raises money, it allots new shares at a stated price. Every allotment must be reported to the Registrar in Form PAS-3 (return of allotment), which records the number of shares, their face value and the premium paid. That gives you a price that sophisticated investors actually paid.

Two cautions. Venture and private equity investors often buy compulsorily convertible preference shares (CCPS) with extra rights such as liquidation preference, so their price can overstate what a plain equity share is worth. And a round from two years ago may be stale if the business has since grown or shrunk.

ESOP buyback prices

Some companies buy back shares from employees who hold stock options, and the price is often reported in the business press. It is set by the company, usually with reference to the last funding round, so it is a useful anchor. It is not a market price, because employees have no other buyer at that moment.

Registered valuer reports

Under Section 247 of the Companies Act, 2013, certain valuations of shares must be done by a registered valuer, registered with the Insolvency and Bankruptcy Board of India (IBBI) for the asset class “securities or financial assets”. For tax purposes, the fair market value of unquoted shares is worked out under Income Tax Rule 11UA, using methods such as net asset value or discounted cash flow. These reports are attached to some MCA filings, for example when shares are issued at a premium.

A valuer’s figure is a reasoned estimate at a point in time, prepared for the company. Read the method and key assumptions rather than just the final number.

Price source	Where to find it	Strength	Main weakness
Dealer quote	Platform websites, dealer phone quotes	Current, actionable	Includes dealer margin; can be pushed up by IPO buzz
Funding round price	Form PAS-3 on MCA, company press releases	Price paid by informed investors	May be for preference shares; can be stale
ESOP buyback price	Company announcements, business news	Set by the company itself	Not an arm’s-length market price
Registered valuer report	Attachments to MCA filings, offer documents	Documented method and assumptions	Prepared for a specific purpose and date
Listed peer multiples	Exchange data, peer annual reports	Market-based cross-check	No peer is a perfect match

How to read MCA filings and annual reports

Every company registered in India files documents with the Ministry of Corporate Affairs (MCA). Anyone can buy access to a company’s public documents on the MCA portal for a small fee, searching by company name or CIN (corporate identity number). Public unlisted companies often also post annual reports on their own websites, and a company that has filed a draft offer document with SEBI has published far more detail than any dealer will give you.

The filings worth pulling are:

• AOC-4 (financial statements): balance sheet, profit and loss, cash flow and the auditor’s report. Check revenue and profit trends over three years, debt, and whether operating cash flow backs up reported profit.
• MGT-7 (annual return): share capital and shareholding pattern. Use it to get the number of shares outstanding and to spot changes in who owns the company.
• PAS-3 (return of allotment): new shares issued, at what price and to whom. This is where funding round and ESOP allotment prices appear.
• SH-7 (change in share capital): splits, consolidations and increases in authorised capital. A split changes the per-share price, so old quotes must be adjusted.
• Charge filings: loans secured against company assets, which show how much the business has borrowed.

In the annual report, read the auditor’s report first. A qualified opinion, an “emphasis of matter” on going concern, or a change of auditor mid-term deserves an explanation before you invest. Then check related-party transactions, contingent liabilities (disputed tax demands, pending lawsuits) and the notes on share capital, which list convertible instruments and ESOP pools.

Always work on a fully diluted share count. If the company has CCPS that will convert into equity, or a large ESOP pool, the profit per share is spread over more shares than the current equity count suggests.

Relative valuation against listed peers

Relative valuation asks: if this company were listed, what would the market pay for it, judging by similar listed companies? The two simplest tools are:

• P/E (price to earnings): share price divided by earnings per share (EPS). Suits profitable, steady businesses. Our explainer on the P/E ratio covers its limits.
• P/B (price to book): share price divided by book value (net worth) per share. Suits banks, NBFCs and asset-heavy firms where the balance sheet drives value.

Pick three to five listed companies in the same industry with similar size, growth and margins, and use the median multiple rather than the highest. Then ask whether the unlisted company deserves more or less: faster growth may justify a premium, while higher debt, weaker governance or a single dominant customer justify a discount. The same thinking applies to listed stocks, as covered in how to tell if a stock is overvalued.

Loss-making companies cannot be valued on P/E. For those, analysts use price to sales or look at the last funding round, and the uncertainty is far higher.

Apply an illiquidity discount

A listed share can be sold in seconds. An unlisted share may take weeks to sell, at a price set by a dealer, and if the company lists you face a six-month lock-in on pre-IPO shares under SEBI’s ICDR regulations. Investors should demand a lower price for that inconvenience.

A common rule of thumb is to knock 20–30% off the peer-based value. This is not a regulation or a fixed formula. Use the lower end for a large, profitable company with a filed offer document, and the higher end (or more) for a smaller company with no listing plans and few buyers.

Worked example: valuing a hypothetical unlisted company

Suppose a dealer offers shares of Company X, a hypothetical unlisted consumer business, at ₹400 a share. From its latest AOC-4 and MGT-7 filings you find:

• Net profit: ₹120 crore
• Net worth (book value): ₹600 crore
• Fully diluted shares: 10 crore
• Median of four listed peers: P/E 30, P/B 5

Step 1: per-share figures. EPS = ₹120 crore ÷ 10 crore = ₹12. Book value per share = ₹600 crore ÷ 10 crore = ₹60.

Step 2: peer-based values. On P/E: ₹12 × 30 = ₹360. On P/B: ₹60 × 5 = ₹300. Taking the simple average gives ₹330 as the “if listed” value.

Step 3: illiquidity discount. At 25%: ₹330 × 0.75 = ₹247.50. Across the 20–30% range, the estimate runs from ₹231 (₹330 × 0.70) to ₹264 (₹330 × 0.80).

Step 4: compare with the asking price. The ₹400 quote is about 62% above the central estimate (₹400 ÷ ₹247.50 = 1.616). At ₹400 you would be paying 33.3 times earnings (₹400 ÷ ₹12), a higher multiple than the listed peers’ 30, for a share you cannot easily sell.

Step 5: what has to go right. Say you want 12% a year for three years. The share would need to reach ₹400 × 1.12 × 1.12 × 1.12 = ₹561.97. If it then trades at the peer P/E of 30, EPS must rise to ₹561.97 ÷ 30 = ₹18.73, which means profit growing about 16% a year from ₹12 (₹12 × 1.16³ ≈ ₹18.73). That is before the 12.5% long-term capital gains tax and dealer spread.

Now cross-check with the other price signals. If the PAS-3 shows a funding round at ₹280 eighteen months ago, and a recent ESOP buyback was at ₹260, both sit far closer to the ₹231–₹264 range than to ₹400. The quote looks driven by demand rather than by the business. This does not mean the share will fall, only that the price assumes a lot of future growth.

Red flags when checking unlisted share value

• Quote far above the last funding round with no new results to justify it, especially after IPO rumours.
• Late or missing MCA filings, or a company status other than “Active” on the MCA portal.
• Auditor concerns: qualified opinion, going-concern doubts, or frequent auditor changes.
• Large related-party transactions or loans to promoter entities.
• Per-share prices not adjusted for a split or bonus, which makes old prices look cheap or dear.
• Wide gap between dealers’ buy and sell quotes, or dealers unwilling to quote a buy-back price at all.
• Valuation sold on “the IPO is coming” rather than on profits or assets. Many companies described as pre-IPO stay unlisted for years.

The wider risks of this market, from settlement failures to lock-ins, are covered in our article on the risks of investing in unlisted shares.

A quick valuation checklist

1. Collect buy and sell quotes from at least three dealers or platforms.
2. Download the last three years of AOC-4 and MGT-7, plus recent PAS-3 and SH-7 filings, from the MCA portal.
3. Work out EPS and book value per share on a fully diluted share count.
4. Find three to five listed peers and note their median P/E and P/B.
5. Calculate the peer-based value, then apply a 20–30% illiquidity discount.
6. Compare the result with funding round and ESOP buyback prices.
7. Decide on the most you would pay, and work out the profit growth needed to justify the quote.

Once you have a fair range, use it to compare offers. Our overview of platforms to buy unlisted shares explains how dealers price and transfer shares.

FAQ

Is there an official price for unlisted shares in India?

No. Unlisted shares have no exchange price. Dealer websites show their own asking prices, which differ from one another and include the dealer’s margin.

How do I find a company’s latest funding round price?

Look for Form PAS-3 filings on the MCA portal, which record each allotment with its face value and premium. Company press releases and business news also report large rounds, but check whether the shares issued were equity or preference shares.

What illiquidity discount should I use?

A rule of thumb is 20–30% off the value implied by listed peers. Use a smaller discount for large, profitable companies close to an IPO and a bigger one for small companies with few buyers. It is a judgement, not a rule.

Can I value a loss-making unlisted company on P/E?

No, because there are no earnings to multiply. Price to sales, the last funding round and the cash runway are used instead, and the range of possible values is much wider.

How are gains on unlisted shares taxed?

Gains on unlisted shares held for more than 24 months are long-term and taxed at 12.5% without indexation. Gains within 24 months are taxed at your slab rate. Budget 2026 did not change these rates. Our article on reducing capital gains tax on shares covers legal ways to plan for it.

Does a registered valuer’s report tell me what to pay?

Not directly. It is prepared for a specific purpose and date, often for the company’s own compliance. Treat it as one input and read the method and assumptions behind the number.