Understanding Delisted Shares
By Sharat S Sharma
Delisted shares are equity of a company that are not traded at any of the major stock exchanges. All these shares were once traded at a stock exchange but due to low trading volumes they have been removed from the list of traded shares by the stock exchange.
These shares are now only traded between people directly, without the intervention of any stock exchange or through the undermentioned First Auction website for delisted/unlisted shares.
Most of these stocks are delisted from the stock exchanges by a procedure known as voluntary delisting, in this type of delisting, shareholders of a company decide by majority to stop public trading of the stocks of the company, or that the stocks of the company will be removed from the listing of a particular stock exchange.
Delisting of a stock whether voluntary, or unvoluntary due to cessation of trading of the shares of a company create a serious handicap for the normal and minor shareholder of the company, these shares become untradable and virtually a dead asset. Since there no longer exists any easy route to exit from these shares, most people dump the share certificates of these shares and forget about them.
These delisted shares also lose their value since speculation on these shares is no longer possible. But, delisting does not mean that these shares have lost all value. In fact, sometimes due to various reasons which range from hostile takeovers, to majority shareholders consolidating their position to increase in the price of the property held by the company manyfold, these shares become more expensive and valuable than they were ever before.
Owners of such delisted or unlisted shares should not lose heart, they now have a means of realising the potential and their investments in these shares by following a few simple steps.
1.Demat all your shares - All physical holdings should be dematerialised, all shares whether listed or delisted can be dematerialised, Contact your bank, inform them that you intend to demat delisted shares and if they are willing to help you open a demat account and demat all your securities, otherwise look around for some other demat account provider, all good companies help in dematerialisation of delisted shares. if any of the companies has wound up or changed their names your demat account provider can obtain the details and inform you.
2.After Dematerialisation of your shares you can put them for auction on www.unlisted-shares.comm by registering on the site and sell them at maximun possible prices. On request the people there even list the shares for you.
