An unlisted share transaction settles as an off-market transfer between two demat accounts. You raise an enquiry, agree a price and quantity, complete KYC and share your demat details, funds move between the two parties' bank accounts, and the seller instructs their depository participant to deliver the shares into your account. There is no exchange and no clearing corporation in the middle, so the sequence is documentary rather than automatic.
The sequence, in order
The full path runs: enquiry, indicative quote, confirmation of price and quantity, KYC and demat details, deal confirmation in writing, funds transfer, off-market delivery instruction by the seller, credit to your demat account, and verification against your own depository statement.
Most transactions clear within one to three working days once both sides have confirmed and documents are in order. The slow parts are rarely the depository system itself: they are KYC, the exchange of correct demat identifiers, and authorisations on the selling side.
Step one: the enquiry and the indicative quote
An enquiry is a request for a live reference price and availability, not an order. You state the company, the quantity, and whether you are buying or selling. What comes back is an indicative price per share, the quantity that can realistically be sourced at that level, and how long the quote holds.
Two things about that quote matter. First, it is indicative: unlisted shares trade over the counter, so the price is a reference level drawn from recent transactions and current dealer interest, not an exchange quote. Second, it is perishable — in thin names both the level and the availability can move within a day.
Reference prices and financials for 237 companies sit on the unlisted shares screener; a specific quantity is priced by the enquiry desk against what can be sourced that day.
Step two: confirming the deal in writing
Before any money or stock moves, both sides should hold the same written record of what was agreed: the company and its ISIN, the number of shares, the price per share, the total consideration, who the counterparty is, the bank account funds are going to, and the expected settlement date.
The ISIN matters more than most first-time buyers expect. It is the unique identifier attached to a dematerialised security, and it is what the depository acts on. Company names in the unlisted space are frequently similar — subsidiaries, holding entities and renamed companies all coexist — so the ISIN is what to check, not the trade name.
Step three: KYC and the client master report
Every unlisted transaction requires standard KYC and a client master report, and the CMR is the document that actually makes the transfer possible. Your depository participant issues it on request, usually within a day.
The CMR is a one-page statement of your demat identity: your name as registered, PAN, DP ID and client ID, the depository (NSDL or CDSL), and the linked bank account. The seller's DP needs the DP ID and client ID exactly as printed. A single transposed digit sends the shares to a valid but wrong account, and reversing that is not a support ticket — it is a fresh transfer that the unintended recipient has to agree to make. Send the CMR itself rather than typing the numbers out.
Expect to provide PAN, an address proof and a cancelled cheque alongside it.
Step four: funds and the delivery instruction
Off-market transfers are not settled through a clearing corporation, so no central counterparty guarantees both legs. Funds move directly between the two bank accounts and shares directly between the two demat accounts. One leg necessarily goes first.
That asymmetry is the largest practical risk in an unlisted transaction, and it is why who you deal with matters as much as what you buy. Ask plainly, before you commit: which leg moves first, whose bank account receives the money, whether the name on it matches the entity in the deal confirmation, and what happens if the other side does not perform. A firm that answers precisely is telling you something useful. One that deflects is telling you something too.
To deliver, the seller submits a delivery instruction to their DP — on paper as a delivery instruction slip, or electronically with an OTP. It carries the buyer's DP ID and client ID, the ISIN, the quantity, an execution date and a reason code identifying it as an off-market sale. A small stamp duty on transfer is collected through the depository system.
Step five: credit, and verifying it yourself
Once the instruction is executed, the shares appear in your demat account, typically the same or the next working day. Verify the credit from your own records, not from a document anyone sends you.
Three checks are enough. Confirm in your DP or depository portal that the holding shows the correct ISIN and quantity. Check the transaction statement for the off-market credit itself, with its date. Then read the consolidated account statement NSDL and CDSL send to registered holders, generated independently of your DP. A screenshot from a counterparty is not verification. Your own depository statement is.
After credit, the shares are simply securities you hold, and corporate actions reach you through the same account. If the company later lists, shares acquired beforehand are generally subject to a lock-in period, so they cannot always be sold on the first day of trading.
Why a demat account is now mandatory
You cannot settle an unlisted share transaction without a demat account, because the law no longer permits these securities to be issued or transferred in physical form. Rules under the Companies Act have, since 2018, required unlisted public companies to issue and transfer securities only in dematerialised form, and the requirement has since been extended to a wider set of companies, including private companies other than small companies.
The practical effects are worth stating clearly. Physical certificates and signed transfer deeds have gone from the process for companies covered by the rules, and with them the older frauds built on forged certificates. Ownership is recorded by a depository rather than evidenced by paper you hold, and every transfer leaves a dated trail in two independent accounts.
Any ordinary demat account with a SEBI-registered depository participant will do. There is no special account type for unlisted shares and no need to open an account with a particular firm to receive a specific company's shares. If you already hold listed equity, that account is the one you will use. If not, opening a demat account is the first practical step, and it should be done before you agree a price rather than after.
How to verify that unlisted shares are genuine
Verification splits into three questions with three different answers: is the security real, is the holding real, and is the counterparty real.
The security is verified by the ISIN. Confirm that the ISIN on the deal confirmation is the one issued for the company you intend to buy, and that the company's own identity — corporate identification number, registered office, filing history — matches what you were told. Filings made with the Registrar of Companies are public and are the primary source for a company's financials, shareholding and status.
The holding is verified by the depository. Once shares are credited, your own statement from NSDL or CDSL is conclusive as to what you hold. Before credit, no document proves that a seller holds what they claim; a holding statement can be edited, and a promise cannot be checked at all.
The counterparty is verified by ordinary diligence. Establish what the firm actually is and is not — a research and enquiry desk, a registered intermediary, or a dealer trading its own book — and how execution is handled. Written deal confirmations, dated prices and named bank accounts matching the contracting entity are the visible signs of a process. Guaranteed listing dates, assured returns, pressure to pay before documentation, and payments to an individual's account when you contracted with a company are signs of the opposite. The risks page covers this ground in more detail.
Selling: the same process, reversed
Selling runs through the same steps with the legs swapped: enquiry with the quantity and ISIN you hold, indicative bid, confirmation, KYC and CMR, then a delivery instruction submitted from your own demat account. Two things differ. Liquidity, not price, is usually the binding constraint — in a thin name there may be no bid at any level on the day you want to sell. And the tax position falls on you, with the holding period determining how any gain is treated.
FAQ
help me understand the process from enquiry to share transfer
You raise an enquiry stating company and quantity, and receive an indicative price with a validity window. You confirm price and quantity in writing, complete KYC and send your client master report so the seller has your exact demat identifiers. Funds move between bank accounts, the seller submits an off-market delivery instruction to their depository participant, and the shares are credited to your demat account, usually within one to three working days.
why is a demat account mandatory for unlisted shares now?
Because rules under the Companies Act require these securities to be issued and transferred only in dematerialised form. Unlisted public companies were brought under the requirement in 2018, and it has since been extended to a wider set of companies. Physical certificates and transfer deeds are therefore no longer usable for covered companies, and ownership is recorded by NSDL or CDSL rather than evidenced by paper.
how can i verify the authenticity of unlisted shares?
Check the ISIN on the deal confirmation against the company you intend to buy, since similar names are common. Confirm the company's identity and financials from its public filings with the Registrar of Companies. After settlement, verify the credit in your own depository statement rather than any document sent to you. Before settlement, treat a seller's holding statement as unverified.
where can i find guides on demat settlement for unlisted shares?
This guide covers the settlement path end to end. The buying guide sets out the transaction in practical steps, and the demat page explains what the account is and which identifiers a transfer needs. NSDL and CDSL publish their own off-market transfer procedures, and your depository participant will supply its specific process, forms and charges on request.
This guide is published for information only. It is not investment advice, and nothing here is a recommendation to buy, sell or hold any security. Prices on this site are indicative over-the-counter reference levels, not exchange quotes and not an offer to deal. Unlisted shares are illiquid and carry the risk of substantial or total loss. Execution and settlement are carried out through separately registered intermediaries. Take independent professional advice on your own circumstances, including tax.