Can You Buy Unlisted Shares Through Your Demat Account or Trading App?
Reviewed by Kanishk Dev Bangia, NISM Series XV Certified Research Analyst
Last Updated: June 2026 | Reg. No: NISM-202300182946
You launch the trading app, look for an IPO company everybody is buzzing about, and don’t see anything. You change the spelling. Again nothing. Frustrating, right? But can this really be true? Will your current demat account work, or would you need some completely different account?
Well, the simple truth is that while the “buy” button of your trading app will not help, your demat account will play a very crucial role. Two different things indeed, and recognizing the distinction between them might well be the key thing to grasp if you want to trade in this market. If you are a newcomer in this field, you should start by finding out what are unlisted shares.
This article will tell you why you won’t find the desired shares using that “buy” button, the crucial role of your demat account in this case, and the process itself so that you understand all the intricacies of it.
The Exchange vs. Off-Market: Two Different Worlds
Now when you purchase a listed share in the NSE market, here is how things work behind the scenes:
Your trade request gets entered into an electronic order book kept centrally.
The market matches your purchase request with another person's selling request.
Settlement takes place in T+1 days via a regulated clearing mechanism.
Your broker, clearing corporation, and depository coordinate with one another.
Everything works like clockwork because everything is standardized and regulated at the exchange level.
There is no such thing as unlisted shares in this framework.
By definition, a company is "unlisted" because it hasn't been able to complete the listing process in a recognized stock exchange. Therefore, the exchange order book does not have any information about them.
That is why your trading app shows nothing when you search for such shares. It is because the app is your gateway into the exchange order book; therefore, if the stock isn't listed in the order book, there is nothing that your app can present you with.
Why Your Trading App’s “Buy” Button Cannot Help You
The trading app that is either from the full-service or the discount broker is meant to place orders through the legitimate stock exchanges. That's all that the product is capable of doing. You will enter the ticker symbol for the company, and your broker's trading app will ask the database at the exchange. If no such company exists on the list of those listed on the exchange, there will be zero responses.
Many clients tend to believe that there is some loophole; that there should be some other screen, an option of dealing with OTC stocks, perhaps a secret switch. There isn't. The product works for securities listed on stock exchanges, not the rest.
That is neither a deficiency nor an imperfection. It is simply the borderline between two markets. One is the exchange-based market; another is an entirely separate off-exchange market dealing with unlisted shares.
Your Demat Account IS Still Involved — Here Is How
Despite being done off-market, it is into your demat account that the shares are delivered. This is one very good thing to note.
In India, there exists a demat (or dematerialised) system in which the depositories involved are the NSDL and CDSL. In fact, any corporation which has issued dematerialised shares is registered in the dematerialisation system irrespective of whether such a corporation is listed or unlisted. As such, in the purchase of your unlisted shares through proper channels, the seller will do an off-market transfer of the shares into your demat account.
Hence, your demat account number (sixteen-digit DP ID + Client ID; or eight-digit CDSL Beneficiary ID) is the address of delivery of the shares. Just as it is for your already listed shares, it is here that your newly acquired unlisted shares will be held.
This is, in fact, one very important security feature. Since the shares will be in your demat account, you have an officially verifiable claim to the shares.
The Role of Your DP (Depository Participant)
Your depository participant (DP), or simply DP, is the institution that provides access to the depository on your behalf. Usually, the DP will be your broker or the securities division of your bank. The DP acts as your entry point into NSDL or CDSL.
When it comes to dealing with unlisted shares, the responsibility of the DP is to make the corresponding adjustment in your account. Once the sale order is placed by the selling party, the DP will take care of the delivery instruction slip (DIS) or eDIS for the off-market transfer.
There is no requirement of creating a new demat account in case of unlisted shares.
You can use the same demat account that you have opened at any DP. However, what you must share with the seller (or intermediary) is the DP ID, Client ID, and your complete name (as it is mentioned in the demat account).
The Proper Process to Actually Buy Unlisted Shares
This is the part most investors want clarity on, so let us go through it step by step. A detailed walkthrough is also available in our guide on how to buy shares of unlisted companies.
Step 1 — Find a credible, SEBI-registered intermediary
Shares that are not listed can be obtained by means of intermediaries. This leads us to one important word, which is 'credible'. It is best to look out for intermediaries who are registered with the SEBI, in one of the following capacities: stockbroker, depository participant, and registered investment adviser. Remember, always check for this registration at the SEBI website itself.
Step 2 — Agree on price and quantity
Unlike listed shares that have their prices determined by the stock exchange, the prices of unlisted shares are negotiable. The price offered by the broker will depend on past dealings, fundamentals of the company, and demand in the market.
Step 3 — Pay against a proper acknowledgement
Make use of NEFT/RTGS/IMPS for bank transfers and not through cash nor UPI transactions to any unconfirmed individual phone numbers. Ensure to receive a written agreement or purchase receipt stating the company’s name, its ISIN, the number of shares, and cost per share.
Step 4 — Share your demat details
Provide your DP ID, Client ID, and registered name to the intermediary. They pass this to the seller, who initiates the off-market transfer from their demat account to yours.
Step 5 — Confirm the demat credit BEFORE treating the deal as done
This is an important requirement that cannot be overlooked at any cost. You will need to log in to your demat account via your DP's website or application and check whether the shares have indeed been deposited to your account. Confirm the details such as the name of the company, ISIN number, and the number of shares.
Red Flags to Watch For
As an off-market transaction, unlisted shares demand additional caution. Below are some things that should set alarm bells ringing:
• Cash or personal payment required. Any genuine transaction must include bank transfers into a business account, not cash or personal payments.
• Absence of contract note. Refuse to proceed if the broker cannot give a note proving the ISIN, quantity, and pricing.
• Urgency to act fast. When pressured by "this deal has to close today," remember that off-market shares don’t expire instantly like options.
• Non-SEBI registered broker. Ask for their SEBI registration number and confirm it via sebi.gov.in. They must provide this without hesitation.
• Demat credit never comes through. Escalate right away, in writing, if the shares are not reflected in your account within two to three days.
It’s equally essential to know how to get out of a situation; check out our article on how to sell unlisted shares.
Frequently Asked Questions
Q: Do I need a separate demat account to hold unlisted shares?
Answer: No. Since your existing demat account can have both listed and unlisted securities in the same demat account opened by any of the registered DP members, there is no requirement for another demat account.
Q: Why can’t I see my unlisted shares in my trading app?
Answer : Your stock trading application only shows exchange listed securities. Off market securities will be shown in your dematerialization account that resides in the depository. Since your stock trading application does not have the capability to show you off market holdings, you should verify your holdings in your depository through your DP portal.
Q: What happens to my unlisted shares if the company eventually lists on the NSE or BSE?
Ans : Once the IPO process is completed and the shares are listed, the shares held in your demat account will be automatically listed on the stock exchange. There will be no need to convert or reissue the shares since the same shares, with the same ISIN, will be listed.
Q: Is buying unlisted shares legal in India?
Answer: Yes, trading in private stocks between consenting parties via off-market transactions is permitted in India. However, the deal should comply with the prevailing tax regulations, which require tax to be paid based on the duration of holding, and it should never use any instrument which avoids SEBI's regulations.
Disclaimer:
This is written for educational and informational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell securities. All data is sourced from publicly available information. Investments in securities markets are subject to market risks — please read all offer documents carefully before investing.
