Why retail shareholders need to be wary of unlisted firms

Reliance Retail's buyback offer highlights the risks faced by retail shareholders in the unlisted shares market, as they now face heavy losses. This episode sheds light on the challenges faced by retail investors in engaging with unlisted stocks. Previous cases, such as Ricoh India and Chennai Super Kings, demonstrate the vulnerability of minority shareholders in such situations. The PharmEasy story further emphasizes the volatile nature of holding minority shares in startups, with fluctuating valuations and sharp declines in share prices over time. Various risks include capital reduction and squeeze-out by majority shareholders, taxation risk, exclusion from future growth opportunities, and idiosyncratic risks.

from mint - money