Investing in unlisted shares can feel exciting. You hear about a company before it hits the stock market, and the idea of getting in early sounds tempting. But it’s not as simple as it looks. If you are thinking about buying shares of Hero FinCorp in the unlisted market, there are a few things you should slow down and check properly.
1. Understand the Business First
Before anything else, try to understand what the company actually does. Hero FinCorp is a non-banking financial company (NBFC), which means it gives loans—personal loans, business loans, and vehicle loans.
Ask yourself:
- How does the company earn money?
- Is the business stable or risky?
- Is the demand for its services growing?
If the business itself doesn’t make sense to you, investing becomes guesswork.
2. Look at Financial Performance
Numbers tell a lot, even if you are not from a finance background. Focus on:
- Revenue growth over the last few years
- Profit or loss trends
- Loan book size and growth
- Bad loans (NPAs)
A company can look popular, but weak financials are always a warning sign.
3. Check the Valuation Carefully
In the unlisted market, prices are not regulated like stock exchanges. Sometimes shares are sold at inflated prices.
Do not rely only on what a broker says. Compare:
- Price vs earnings (if available)
- Valuation compared to similar listed NBFCs
Many investors get trapped by buying at high valuations and then waiting for years to recover.
4. Know the Risks of Unlisted Shares
Unlisted shares are not as easy to sell as listed ones. This is one of the biggest differences.
Some risks include:
- Low liquidity (you may not find buyers easily)
- No daily price transparency
- Delays in IPO or no IPO at all
So always invest only what you can afford to keep locked for some time.
5. Verify the Source or Platform
Where you are buying from matters a lot. There are many platforms and brokers dealing in unlisted shares.
Before buying:
- Check their credibility
- Ask for proper documentation
- Avoid deals that sound rushed or too good
A genuine transaction should always be transparent.
6. Check IPO Possibility, Not Just Hype
Many people invest in unlisted shares only for IPO gains. But not every company lists quickly.
Try to find:
- Whether the company has announced IPO plans
- Past news or updates about listing
- Industry position and growth chances
Avoid investing only based on rumors.
7. Understand Pricing Trends
Even in the unlisted market, prices keep changing based on demand, news, and expectations. Tracking the Hero Fincorp share price over time can give you a basic idea of how the market is valuing it.
But remember—price movement alone should not be your reason to invest.
8. Look at the Management and Backing
A strong management team matters a lot in finance companies.
Check:
- Who runs the company
- Background of promoters
- Any past issues or controversies
Good leadership often reflects in long-term performance.
Final Thoughts
Buying unlisted shares is not wrong, but going in without checking basics can lead to problems. It’s easy to get influenced by early-entry stories, but real investing needs patience and clarity.
Take your time, ask questions, and don’t rush just because others are investing. Sometimes, waiting for the IPO itself can be the safer choice.
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