Context:
In 2023-24, unlisted companies in India are increasing their net fixed assets by 7.5%. This is in contrast to listed companies, where the figure stood at 6.4%.
Unlisted Public Company
An unlisted public company is a public company that is not listed on any stock exchange; therefore, it may raise finance through the issue and sale of shares to the public. The jurisdictions vary in criteria for listing. However, for a public company to be registered, it should meet minimum share capital and the number of shareholders.
Reason For Not Listing?
Some companies do not list for a variety of reasons, including to avoid costs, not wanting public investors, or having too few shareholders.
Listed Vs Unlisted Companies
The most significant difference between a listed company and an unlisted company is that shares of a listed company are traded on a stock exchange, while the shares of an unlisted company are not traded on a stock exchange:
- Ownership
- There are many shareholders in a listed company, comprising retail and institutional investors, whereas an unlisted company is mostly owned by private investors or small institutions.
- Accessibility
- Shares in a listed company are easily accessed and traded while those in an unlisted company are not.
- Regulations
- Listed companies are strictly regulated on issues such as regular financial reporting and corporate governance standards. The unlisted companies are less regulated than the listed companies but are more regulated than the private companies.
- Information
- The listed companies are compelled to make available to the public detailed financial statements and other significant information at fixed intervals. In contrast, the unlisted companies may not divulge as much financial information.
- Investment
- Listed shares can be purchased with a Demat and trading account with a SEBI-registered stockbroker. Unlisted shares are relatively less liquid compared to listed shares.
- Goals
- Listed companies tend to emphasize maximizing shareholder value. In contrast, the unlisted companies may tend to focus more on long-term growth.
