<p style="text-align: justify">​<br></p><p style="line-height: 1.38;text-align: justify"><span style="background-color: transparent;color: rgb(0, 0, 0)">Here's something a lot of first-time IPO investors don't realize: getting shares doesn't automatically mean you can sell them right away. If your allotment came through the retail quota, sure, you can usually offload it as soon as trading opens. Founders don't get that luxury. Neither do anchor investors or the early-stage backers who got in before the company went public. SEBI makes them hold onto their shares for a set stretch of time first.</span></p><p style="line-height: 1.38;text-align: justify"><span style="background-color: transparent;color: rgb(0, 0, 0)"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">That stretch has a name: the lock-in period.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Basically, it's a rule that stops certain shareholders from selling or transferring their stock until a set date has come and gone. Regulators put it in place for two reasons that tend to overlap. They want major shareholders to stay financially tied to the company after it lists, and they want to stop the market from getting flooded with shares all in one go.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Figuring out who's actually bound by these rules trips a lot of people up. It isn't just about which investor bucket you fall into. When you got your shares, and how, matters just as much as who you are.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">So what does "lock-in period" actually mean?</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">It's the shortest amount of time that has to pass before a shareholder can legally sell or hand off a particular batch of shares.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">That's not the same thing as a shareholder simply deciding on their own to keep holding. Nothing stops a retail investor from sitting on their IPO shares for five years out of pure stubbornness, and nothing forces them to sell either. A promoter doesn't have that freedom. They could want out the day after listing and the law would still say no.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Lock-ins matter so much in IPOs because a lot of the people already holding stock have usually been sitting on it for years by the time the company lists. Without any restriction, they could dump a huge chunk of their stake the moment trading starts. That's the exact scenario the rules are built to prevent, at least for the shareholder categories they cover.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Which investors are actually locked in?</span></h2><div style="margin-left:0pt"><table><tbody><tr><td><p style="line-height: 1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Investor Type</span></p></td><td><p style="line-height: 1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Typical Lock-in</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Retail Investor</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">No IPO-specific lock-in</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">NIIs/HNIs</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">No IPO-specific lock-in</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Ordinary QIBs</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">No IPO-specific lock-in</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Anchor Investors</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">50% for 30 days, 50% for 90 days</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Minimum promoter contribution</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Usually 18 months</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Promoter holding above the minimum</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Usually 6 months</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Other pre-IPO shareholders</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Usually 6 months, with some exceptions</span></p></td></tr><tr><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Certain VCFs, AIFs, and FVCIs</span></p></td><td><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Governed by specific rules</span></p></td></tr></tbody></table></div><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">This table isn't set in stone. Individual IPOs can shift these numbers a bit depending on the deal, so for the exact figures on a company you're actually researching, check its DRHP, RHP or final prospectus.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Retail investors, NIIs, and QIBs</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Ordinary retail investors don't usually run into an IPO-specific lock-in at all. Once shares from the public portion land in your demat account, you're free to sell them from the day listing begins.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Much the same applies to NIIs, sometimes called HNIs, who get their allotment through the standard NII quota. Same story for QIBs coming in through the regular QIB route.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Anchor investors are where this pattern breaks down. Yes, every anchor investor is a QIB by definition. But plenty of QIBs never touch the anchor portion at all, and that gap is exactly why the lock-in rules treat them differently.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">How the anchor investor lock-in actually works</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Most IPOs give anchor investors a shot at buying in a day or two before the issue opens to everyone else, and they usually walk away with pretty big allotments. Now imagine all of that hitting the market on listing day. That's a lot of supply landing at once, and it could easily knock the stock price around.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">So regulators split it. Half the shares stay locked for 30 days. The other half stays locked for 90.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Take a fund that picks up 10 lakh shares as an anchor investor. Once the first month is over, it can sell 5 lakh of them. The remaining 5 lakh has to wait out the full 90 days.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">The whole point is to spread out any selling pressure over time instead of letting a big institutional holder unload everything in one shot and spook the rest of the market.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Promoters face the strictest rules</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Promoters tend to hold big stakes and have genuine influence over how a company runs, so regulators lock them in for longer than almost anyone else.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Right now, the portion of shares that make up the minimum promoter contribution stays locked for 18 months from the date of allotment. Anything the promoter holds above that minimum threshold only has to sit for 6 months.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Some situations stretch these timelines further, so don't assume the standard rule automatically applies. Check the specific offer document.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">One side effect of this setup: a promoter's full stake rarely becomes sellable on a single date. It tends to open up in stages instead.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">What about pre-IPO investors?</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Non-promoter shareholders who got in before the company listed are usually stuck with a 6-month lock-in counted from their allotment date, with a handful of exceptions depending on the circumstances.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">This comes up a lot with companies that had private equity or venture capital money behind them before going public.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Certain Venture Capital Funds, Category I and II Alternative Investment Funds, and Foreign Venture Capital Investors get treated a little differently here. Their shares can carry a minimum 6-month lock-in measured from the purchase date itself, not the allotment date, and that's subject to whatever specific conditions apply under the relevant regulations.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Does the end of a lock-in period mean shares will get dumped?</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">A lot of investors spot a lock-in expiry on the calendar and assume a sell-off is basically guaranteed. It isn't. Once a lock-in lapses, those shareholders just gain the option to sell. Nobody's making them do it.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">It's easy to see why the market gets nervous around these dates anyway. A big private equity fund suddenly free to exit tends to make traders anxious about a wave of new supply hitting the stock and pushing the price down. People call this "share overhang."</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">None of that guarantees an actual crash, though. What happens next really comes down to that particular shareholder's own calculus, whether they'd rather exit fast or hold out for a better price, what they originally paid, and how liquid the stock normally is. More often than you'd think, big holders just sit tight instead of selling.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Why should investors bother tracking these dates?</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Anyone digging into a newly listed company can learn a fair bit from its lock-in schedule alone. The prospectus lays out:</span></p><p style="text-align: justify"><strong></strong></p><ul><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height: 1.38;text-align: justify"><span style="background-color: transparent">Which shareholders currently hold locked-in shares</span></p></li><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height: 1.38;text-align: justify"><span style="background-color: transparent">How large those holdings are</span></p></li><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height: 1.38;text-align: justify"><span style="background-color: transparent">When each lock-in period actually ends</span></p></li><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height: 1.38;text-align: justify"><span style="background-color: transparent">How much of the company's total share capital could eventually hit the open market</span></p></li></ul><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">That kind of detail helps you get a sense of how supply and demand for the stock might shift as time goes on.</span></p><h2 style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">The takeaway</span></h2><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">A lock-in period, boiled down, just limits when certain shareholders are allowed to sell. Retail investors, NIIs, and ordinary QIBs mostly skip this restriction altogether. Anchor investors, promoters, and some pre-IPO shareholders don't get off so easy.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">If you're tracking these dates, the useful question isn't really "when does this lock-in end." It's who's holding the shares about to come free, and how big that stake is next to the company's total tradable float.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">A lock-in expiring doesn't mean a flood of selling is coming automatically. Still worth watching, though, especially if you're trying to read a newly listed company's ownership structure and where future supply might come from.</span></p><p style="text-align: justify">​</p><p></p>

Lock-in Period Explained: Rules for Different Investor Categories

<h2><span style="font-size: 24px">1. Business Overview</span></h2><p>​<a target="_blank" href="https://www.planify.in/research-report/goodluck-defence-and-aerospace/">Goodluck Defence and Aerospace Ltd.</a> (GDAL), a subsidiary of Goodluck India Ltd., is expanding its presence in India's defence manufacturing sector. The company was established in 2023 and operates a facility in Sikandrabad, Uttar Pradesh, where it manufactures <strong>155mm artillery shell bodies</strong>. Unlike complete ammunition manufacturers, GDAL focuses on the forged-steel shell body, while explosive filling and fuzes are handled separately. The company's facility has received the required defence manufacturing approvals and quality certification. </p><p>The business is benefiting from rising global demand for artillery ammunition following the Russia-Ukraine conflict and increased defence spending across several countries. GDAL currently has an annual capacity of around <strong>1.5 lakh shells</strong> and plans to increase this to <strong>4 lakh shells</strong>, supported by a planned expansion. The company has also secured a domestic order of around <strong>₹255 crore</strong> for 155mm long-range empty shells, strengthening visibility for the business.</p><p><br></p><h2>2. Business Performance</h2><p>GDAL generated <strong>₹46 crore of revenue and ₹29 crore of EBITDA in FY26</strong>, translating into an EBITDA margin of around 63%. However, management has cautioned that this unusually high margin is not sustainable because the plant was operational for only part of the year. It expects a more normalised EBITDA margin of around <strong>30–35%</strong> as production scales up. </p><p>For FY27, management has guided for <strong>₹250–300 crore of revenue</strong> from the defence business, with the existing capacity expected to operate at around 75–80% utilisation. This would represent more than five times FY26 revenue at the lower end of the guidance. To support longer-term growth, GDAL's board on <strong>August 6, 2026</strong>, approved a proposal to raise <strong>₹283.5 crore</strong> through the issue of up to 75.6 lakh shares at ₹375 each to 38 non-promoter investors. The proceeds will be used mainly for capacity expansion, working capital and general corporate purposes. </p><p>The company plans to invest around <strong>₹400 crore in expansion</strong>, taking annual shell-making capacity from 1.5 lakh to 4 lakh units. The fundraise therefore comes at a crucial stage as GDAL attempts to convert strong current demand into a much larger defence business.</p><p><br></p><h2>3. Conclusion</h2><p>Goodluck Defence is rapidly transforming Goodluck India's traditional engineering capabilities into a high-growth defence business. Strong artillery demand, a sizeable order pipeline and planned capacity expansion provide significant growth potential. However, the company still needs to prove that it can achieve its FY27 revenue guidance and sustain the targeted 30–35% EBITDA margin as operations mature.</p>

Goodluck Defence Plans ₹283.5 Crore Fundraise to Expand Artillery Shell Capacity

<p>​<a target="_blank" href="https://www.planify.in/research-report/madhur-iron-and-steel/">Madhur Iron and Steel</a> is in <span style="color: rgb(77, 79, 92)">the business of manufacturing and trading of a wide range of structural steel products, including Angles, Channels, Mild Steel (MS) Sections, and Flats &amp; Rods. The Company primarily operates under a business-to-business (B2B), order-based model, supplying products to institutional customers. The Company is engaged in the manufacture of re-rolled structural steel products, including Angles, Channels and other similar products. Upon manufacture, such structural steel products are either sold directly to customers or, depending on customer specifications, further processed through fabrication to convert them into finished, application ready products. Its products cater to diverse end-use industries, such as railway electrification, state electricity boards, power and energy infrastructure, telecom tower manufacturing, automotive and ancillary units, offshore structure fabrication, construction and real estate, general engineering, auto body manufacturing, and other related industries.</span></p><h2><span style="color: rgb(77, 79, 92)">​1. Revenue, EBITDA, Net Profit &amp; EPS Summary (₹in Cr)</span></h2><table><tbody><tr><td><div><strong>Particulars</strong></div></td><td><div><strong>FY26</strong></div></td><td><div><strong>FY25</strong></div></td><td><div><strong>YoY Change</strong></div></td></tr><tr><td><div>Revenue&nbsp;</div></td><td><div>445</div></td><td><div>341</div></td><td><div>30.6%</div></td></tr><tr><td><div>EBITDA</div></td><td><div>53</div></td><td><div>39</div></td><td><div>36.7%</div></td></tr><tr><td><div>EBITDA Margin</div></td><td><div>11.9%</div></td><td><div>11.4%</div></td><td><div>-</div></td></tr><tr><td><div>Net Profit   (NP)</div></td><td><div>24</div></td><td><div>18</div></td><td><div>31.7%</div></td></tr><tr><td><div>NP Margin   (NPM)</div></td><td><div>5.4%</div></td><td><div>5.3%</div></td><td><div>-</div></td></tr><tr><td><div>EPS (Basic   &amp; Diluted, Rs)</div></td><td><div>8</div></td><td><div>7</div></td><td><div>19.5%</div></td></tr></tbody></table><p><br></p><p>Revenue grew 301% YoY, and EBITDA grew faster, pointing to modest operating leverage. Net profit rose 32%, slightly ahead of revenue growth, while EPS grew a slower 19% because the equity share capital base itself nearly doubled during the year. Company has issued&nbsp;1,48,92,273 bonus shares in FY26.<br></p><p><br></p><h2>2. Common-Size Statement</h2><table><tbody><tr><td><div><strong>Particulars</strong></div></td><td><div><strong>FY25 (Rs Cr)</strong></div></td><td><div><strong>FY25 (% of Rev)</strong></div></td><td><div><strong>FY26 (Rs Cr)</strong></div></td><td><div><strong>FY26 (% of Rev)</strong></div></td></tr><tr><td><div>Revenue (Total   Income)</div></td><td><div>341</div></td><td><div>100.0%</div></td><td><div>445</div></td><td><div>100.0%</div></td></tr><tr><td><div>Cost of   Materials Consumed</div></td><td><div>194</div></td><td><div>56.8%</div></td><td><div>212</div></td><td><div>47.6%</div></td></tr><tr><td><div>Purchases of   Stock-in-Trade</div></td><td><div>136</div></td><td><div>39.8%</div></td><td><div>182</div></td><td><div>40.8%</div></td></tr><tr><td><div>Changes in   Inventories (FG &amp; WIP)</div></td><td><div>(44)</div></td><td><div>-13.0%</div></td><td><div>(32)</div></td><td><div>-7.2%</div></td></tr><tr><td><div>Total Cost of   Goods Sold</div></td><td><div>285</div></td><td><div>83.6%</div></td><td><div>362</div></td><td><div>81.3%</div></td></tr><tr><td><div>Employee   Benefit Expense</div></td><td><div>3</div></td><td><div>0.9%</div></td><td><div>7</div></td><td><div>1.5%</div></td></tr><tr><td><div>Finance Costs</div></td><td><div>12</div></td><td><div>3.6%</div></td><td><div>18</div></td><td><div>4.2%</div></td></tr><tr><td><div>Depreciation   &amp; Amortisation</div></td><td><div>2</div></td><td><div>0.5%</div></td><td><div>2</div></td><td><div>0.5%</div></td></tr><tr><td><div>Other Expenses</div></td><td><div>14</div></td><td><div>4.1%</div></td><td><div>24</div></td><td><div>5.3%</div></td></tr><tr><td><div>Total Expenses</div></td><td><div>316</div></td><td><div>92.7%</div></td><td><div>413</div></td><td><div>92.7%</div></td></tr></tbody></table><h2>​<strong>​<br></strong></h2><h2><strong>3. Key Balance Sheet Items</strong><br></h2><p><br></p><table><tbody><tr><td><div><strong>Particulars</strong></div></td><td><div><strong>FY26 (₹ Cr)</strong></div></td><td><div><strong>FY25 (₹ Cr)</strong></div></td></tr><tr><td><div>Property,   Plant and Equipment</div></td><td><div>19</div></td><td><div>17</div></td></tr><tr><td><div>Inventories</div></td><td><div>173</div></td><td><div>150</div></td></tr><tr><td><div>Trade   Receivables</div></td><td><div>80</div></td><td><div>42</div></td></tr><tr><td><div>Cash and Cash   Equivalents</div></td><td><div>0.22</div></td><td><div>0.70</div></td></tr><tr><td><div>Current   Borrowings</div></td><td><div>127</div></td><td><div>81</div></td></tr><tr><td><div>Non-Current   Borrowings</div></td><td><div>9</div></td><td><div>3</div></td></tr><tr><td><div>Trade Payables   (Total)</div></td><td><div>69</div></td><td><div>53</div></td></tr><tr><td><div>Total Equity</div></td><td><div>117.90</div></td><td><div>93.99</div></td></tr></tbody></table><h2><br></h2><h2>4. Key Ratio Analysis<br></h2><table><tbody><tr><td><div><strong>Ratio</strong></div></td><td><div><strong>FY26</strong></div></td><td><div><strong>FY25</strong></div></td><td><div><strong>YoY Change</strong></div></td></tr><tr><td><div>Net Profit   Margin</div></td><td><div>5.4%</div></td><td><div>5.3%</div></td><td><div style="text-align: center">-</div></td></tr><tr><td><div>Return on   Equity (ROE)</div></td><td><div>20.3%</div></td><td><div>19.3%</div></td><td><div style="text-align: center">-</div></td></tr><tr><td><div>Fixed Asset   Turnover Ratio</div></td><td><div>24x</div></td><td><div>20x</div></td><td><div>+4x</div></td></tr><tr><td><div>Debt-to-Equity   Ratio</div></td><td><div>1.15x</div></td><td><div>0.90x</div></td><td><div>+0.26x</div></td></tr></tbody></table><p><br></p><p>ROE improved as profit growth (32%) outpaced the 26% growth in the equity base from retained earnings and bonus issue. The Debt-to-Equity ratio rose as borrowings were drawn up faster than equity to fund working capital requirements.&nbsp;Fixed asset turnover improved, consistent with revenue growing faster than the property, plant and equipment base.<br></p>

Madhur Iron and Steel- FY26 Performance Review

<p><br></p><p style="text-align: justify">At the end of FY26, Transline had ₹13 lakh in the bank, not ₹13 crore! In the same fiscal year, it had made a profit after tax of ₹70.28 crore on revenues of ₹488.46 crore, registering a growth of 32%. Both the statements are correct, and both point to the reason why the company is planning an IPO.</p><p style="text-align: justify"><br></p><p style="text-align: justify"><strong>The Business<br>​</strong><br></p><p style="text-align: justify">Transline builds and runs security and identity infrastructure for institutions that can't afford failure - cameras, biometrics and AI for police stations, railways and smart cities, delivered as one accountable contract rather than four separate vendors. Incorporated in 2001, the company has spent 25 years working its way into some of the most sensitive corners of Indian public infrastructure: Aadhaar enrolment for UIDAI, biometric attendance systems for a state judiciary, and large-scale deployments across PSUs, Railways and Police departments, serving 250+ clients through 8+ proprietary platforms.<br></p><p style="text-align: justify"><br><strong>The Revenue Mix<br>​</strong><br></p><p style="text-align: justify">In the revenue profile, the truth comes out. The solutions business, which includes hardware and integration, accounts for 77% of the revenues but only 26% of the segment profit, at a meagre margin of 9.2%. While the services business contributes only 23% of the revenues, it accounts for 74% of the profits and is growingalmost twiceas fast.</p><p style="text-align: justify">This is a structural problem, not one of accounting trickery. In FY25 and FY26, the company has made a profit of ₹118.6 crore while burning through ₹87 crore in operational cash, resulting in a difference of ₹200 crore. The amount of unbilled revenue, receivables, retention of money, and inventory has come toapproximately equala year's worth of sales at the top line. This has resulted in growth which has been external, via borrowings, capital raise in FY25, and now a DRHP approved by SEBI in January 2026.</p><p style="text-align: justify"><br></p><p style="text-align: justify"><strong>The Valuation Question</strong><br><br></p><p style="text-align: justify">At an indicative price of ₹168 a share, the stock is trading at 21x FY26 earnings —not unreasonable at 45% profit growth, but the market is paying for accounting profit without generating cash yet. If the company can bridge the gap in the form of billed and collected milestones or if the company is unable to bridge it via raising more capital, then we will know it from FY27 cash flow.</p><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 2px 0px 2px -5px; padding: 0px; user-select: text; overflow: visible; position: relative; display: flex; justify-content: flex-start; direction: ltr; text-align: justify"><table><tbody><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Metric</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">FY26</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">FY25</p></div></div></td></tr><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Revenue</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹488.46cr</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹371.08cr</p></div></div></td></tr><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Profit after tax</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹70.28cr</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹48.33cr</p></div></div></td></tr><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Operating cash flow</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹ (7.21)cr</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹ (79.93)cr</p></div></div></td></tr><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Trade receivables</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹218.07cr</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹189.59cr</p></div></div></td></tr><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Contract assets (unbilled revenue)</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹145.51cr</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹90.64cr</p></div></div></td></tr><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Inventories</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹66.53cr</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹29.70cr</p></div></div></td></tr><tr><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">Cash &amp; equivalents</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹0.13cr</p></div></div></td><td><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px 7px; user-select: text; overflow: visible; z-index: 0; position: relative; text-align: justify"><div style="-webkit-user-drag: none; -webkit-tap-highlight-color: transparent; margin: 0px; padding: 0px; user-select: text; clear: both; cursor: text; overflow: visible; position: relative; direction: ltr; text-align: justify"><p style="text-align: justify">₹0.13cr</p></div></div></td></tr></tbody></table></div>

Transline is booming on paper. Why isn't the cash showing up?

<p>Madhur Iron &amp; Steel (India) Limited is preparing to enter the capital markets with its proposed Mainboard IPO. The company filed its Draft Red Herring Prospectus (DRHP) with SEBI on January 23, 2026, with the filing subsequently published by SEBI on February 6, 2026.&nbsp;The proposed IPO comprises a fresh issue of up to 1 crore equity shares, with no Offer for Sale component.</p><h2><span style="font-size: 24px">Business Model</span></h2><p>Company is engaged in the manufacturing and trading of a wide range of structural steel products, including Angles, Channels, Mild Steel (MS) Sections, and Flats &amp; Rods. The Company primarily operates under a business-to-business (B2B), order-based model, supplying products to institutional customers. The Company is engaged in the manufacture of re-rolled structural steel products, including Angles, Channels and other similar products. Upon manufacture, such structural steel products are either sold directly to customers or, depending on customer specifications, further processed through fabrication to convert them into finished, application ready products. Its products cater to diverse end-use industries, such as railway electrification, state electricity boards, power and energy infrastructure, telecom tower manufacturing, automotive and ancillary units, offshore structure fabrication, construction and real estate, general engineering, auto body manufacturing, and other related industries.</p><h2>Product Portfolio </h2><ol><li>&nbsp;Structural Steel Products - Angles, channel, section flats and roads</li><li>Engineered Products- Transmission Line Towers,&nbsp;</li><li>Trading of steel products like billets, blooms, and plates.</li></ol><h2>Object of the Issue</h2><ol><li>Repayment/ prepayment, in full or in part, of certain borrowings and accrued interest thereon availed by the Company</li><li>&nbsp;Financing the capital expenditure requirements.&nbsp;</li><li>Funding for working capital requirements and General Corporate purposes.</li></ol><h2>Financial Performance</h2><table><tbody><tr><td><p style="line-height:107%"><strong>KPI</strong></p></td><td><p style="line-height:107%"><strong>Units</strong></p></td><td><p style="line-height:107%"><strong>September   30, 2025</strong></p></td><td><p style="line-height:107%"><strong>March 31,   2025</strong></p></td><td><p style="line-height:107%"><strong>March 31,   2024</strong></p></td><td><p style="line-height:107%"><strong>March 31,   2023</strong></p></td></tr><tr><td><p style="line-height:107%"><strong>Total   Income</strong></p></td><td><p style="line-height:107%">₹ lakhs</p></td><td><p style="line-height:107%">19,269</p></td><td><p style="line-height:107%">34,066</p></td><td><p style="line-height:107%">23,980</p></td><td><p style="line-height:107%">19,323</p></td></tr><tr><td><p style="line-height:107%"><strong>Revenue   from Operations</strong></p></td><td><p style="line-height:107%">₹ lakhs</p></td><td><p style="line-height:107%">19,224</p></td><td><p style="line-height:107%">33,956</p></td><td><p style="line-height:107%">23,925</p></td><td><p style="line-height:107%">19,284</p></td></tr><tr><td><p style="line-height:107%"><strong>Revenue   from Operations Growth (YoY)</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">42%</p></td><td><p style="line-height:107%">42%</p></td><td><p style="line-height:107%">24%</p></td><td><p style="line-height:107%">57%</p></td></tr><tr><td><p style="line-height:107%"><strong>EBITDA</strong></p></td><td><p style="line-height:107%">₹ lakhs</p></td><td><p style="line-height:107%">2,016</p></td><td><p style="line-height:107%">3,511</p></td><td><p style="line-height:107%">2,409</p></td><td><p style="line-height:107%">1,387</p></td></tr><tr><td><p style="line-height:107%"><strong>EBITDA   Margin</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">10.5%</p></td><td><p style="line-height:107%">10%</p></td><td><p style="line-height:107%">10%</p></td><td><p style="line-height:107%">7%</p></td></tr><tr><td><p style="line-height:107%"><strong>Profit   Before Tax (PBT)</strong></p></td><td><p style="line-height:107%">₹ lakhs</p></td><td><p style="line-height:107%">1,329</p></td><td><p style="line-height:107%">2,480</p></td><td><p style="line-height:107%">1,733</p></td><td><p style="line-height:107%">928</p></td></tr><tr><td><p style="line-height:107%"><strong>PBT Margin</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">7%</p></td><td><p style="line-height:107%">7%</p></td><td><p style="line-height:107%">7%</p></td><td><p style="line-height:107%">5%</p></td></tr><tr><td><p style="line-height:107%"><strong>Profit   After Tax (PAT)</strong></p></td><td><p style="line-height:107%">₹ lakhs</p></td><td><p style="line-height:107%">979</p></td><td><p style="line-height:107%">1,812</p></td><td><p style="line-height:107%">1,256</p></td><td><p style="line-height:107%">652</p></td></tr><tr><td><p style="line-height:107%"><strong>PAT Margin</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">5%</p></td><td><p style="line-height:107%">5%</p></td><td><p style="line-height:107%">5%</p></td><td><p style="line-height:107%">3.4%</p></td></tr><tr><td><p style="line-height:107%"><strong>Interest   Coverage Ratio (ICR)</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">312%</p></td><td><p style="line-height:107%">357%</p></td><td><p style="line-height:107%">375%</p></td><td><p style="line-height:107%">338%</p></td></tr><tr><td><p style="line-height:107%"><strong>Return on   Equity (RoE)</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">10%</p></td><td><p style="line-height:107%">26%</p></td><td><p style="line-height:107%">40%</p></td><td><p style="line-height:107%">40%</p></td></tr><tr><td><p style="line-height:107%"><strong>Return on   Capital Employed (RoCE)</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">8.5%</p></td><td><p style="line-height:107%">17.7%</p></td><td><p style="line-height:107%">21.6%</p></td><td><p style="line-height:107%">23.6%</p></td></tr><tr><td><p style="line-height:107%"><strong>Fixed   Assets Turnover</strong></p></td><td><p style="line-height:107%">Times</p></td><td><p style="line-height:107%">8.80</p></td><td><p style="line-height:107%">19.04</p></td><td><p style="line-height:107%">16.50</p></td><td><p style="line-height:107%">19.44</p></td></tr><tr><td><p style="line-height:107%"><strong>EPS</strong></p></td><td><p style="line-height:107%">₹</p></td><td><p style="line-height:107%">3.28</p></td><td><p style="line-height:107%">6.71</p></td><td><p style="line-height:107%">5.38</p></td><td><p style="line-height:107%">2.80</p></td></tr><tr><td><p style="line-height:107%"><strong>Debt-Equity   Ratio</strong></p></td><td><p style="line-height:107%">Ratio</p></td><td><p style="line-height:107%">0.98</p></td><td><p style="line-height:107%">0.90</p></td><td><p style="line-height:107%">1.35</p></td><td><p style="line-height:107%">1.55</p></td></tr></tbody></table><p><br></p><h2>Key Performance Indicator</h2><table><tbody><tr><td><p style="line-height:107%"><strong>KPI</strong></p></td><td><p style="line-height:107%"><strong>Units</strong></p></td><td><p style="line-height:107%"><strong>September   30, 2025</strong></p></td><td><p style="line-height:107%"><strong>March 31,   2025</strong></p></td><td><p style="line-height:107%"><strong>March 31,   2024</strong></p></td><td><p style="line-height:107%"><strong>March 31,   2023</strong></p></td></tr><tr><td><p style="line-height:107%"><strong>Installed   Capacity</strong></p></td><td><p style="line-height:107%">Ton</p></td><td><p style="line-height:107%">28,350</p></td><td><p style="line-height:107%">56,700</p></td><td><p style="line-height:107%">44,100</p></td><td><p style="line-height:107%">44,100</p></td></tr><tr><td><p style="line-height:107%"><strong>Capacity   Utilised</strong></p></td><td><p style="line-height:107%">Ton</p></td><td><p style="line-height:107%">23,492</p></td><td><p style="line-height:107%">38,070</p></td><td><p style="line-height:107%">35,255</p></td><td><p style="line-height:107%">28,648</p></td></tr><tr><td><p style="line-height:107%"><strong>% Capacity   Utilised</strong></p></td><td><p style="line-height:107%">%</p></td><td><p style="line-height:107%">83%</p></td><td><p style="line-height:107%">67%</p></td><td><p style="line-height:107%">80%</p></td><td><p style="line-height:107%">65%</p></td></tr></tbody></table>

Madhur Iron & Steel Files DRHP for IPO

<p style="text-align: justify"><span style="background-color: transparent;color: rgb(0, 0, 0)">Every few months, a fresh wave of retail investors discovers unlisted shares — usually after hearing that someone made a fat return buying pre-IPO stock in a company that later listed at a premium. The appetite is real. So is the confusion. Ask ten people how unlisted share transactions actually work, who holds the shares in the interim, or what happens if the seller simply doesn't deliver, and you'll get ten different half-answers.</span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">That gap between enthusiasm and understanding is exactly where things go wrong. And in 2026, it's not a hypothetical problem — it's the subject of an active regulatory warning.</span></p><h2 style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">A caution straight from the regulator</span></h2><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">On June 17, 2026, SEBI issued a press release (PR 32/2026) telling investors, in fairly blunt terms, to stay away from unauthorised electronic platforms offering trades in unlisted public company shares. This wasn't a new concern — SEBI had flagged the same issue back in December 2024, and even earlier in August 2016 — but the fact that it needed repeating tells you the problem hasn't gone away. If anything, it's grown alongside investor interest.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">What was remarkable about what had set off these specific warnings was how it happened. The demand for private shares of firms such as HDFC Financial Services (a subsidiary of HDFC Bank) and National Stock Exchange itself had shot up, and with it had come an increase in the number of platforms, many of which were not registered, who acted as mediators in such transactions. SEBI's message was clear: only those exchanges which have been recognised by SEBI have the mandate to establish a market platform for the trading of securities in India. Everything else, regardless of how professionally designed their website might be, falls outside the ambit of the investor protection system of SEBI.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Read that again, because it's the crux of the whole safety question. If a transaction goes wrong on an unauthorised platform — the seller doesn't transfer shares after receiving payment, or the "company" turns out to be a shell — there is no regulatory body you can escalate to. You're on your own, negotiating with the same platform that arguably let the problem happen.</span></p><h2 style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Why this space attracts risk in the first place</span></h2><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><a target="_blank" href="https://www.planify.in/unlisted-shares/">Unlisted share</a> transactions sit in a genuinely awkward zone. They're legal — private companies and their shareholders are free to transfer shares under the Companies Act, subject to the company's articles and any transfer restrictions — but they don't happen on an exchange with a central order book, standardised pricing, or automated settlement. Instead, most trades are bilateral: a buyer and seller (or a platform standing between them) agree on a price, and shares move via an off-market transfer through depositories.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">That structure creates a few specific vulnerabilities.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Price discovery is opaque. There's no ticker, no live order book, no last-traded-price feed. Prices are quoted by whoever is selling, often with a wide bid-ask spread, and a buyer has no easy way to know if ₹450 a share is fair value or a 40% markup. This is exactly the kind of gap where a platform can quietly overcharge and call it "market rate."</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Settlement risk is real. On the NSE or BSE, a clearing corporation guarantees settlement — you pay, you get shares, full stop. In the unlisted market, especially through unregistered intermediaries, there's no such backstop. Cases of buyers paying upfront and shares never arriving in their demat account aren't urban legend; they're the specific failure mode SEBI keeps warning about.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Data handling is unregulated. Onboarding on these platforms usually means KYC documents, PAN, bank details — sensitive information handed to an entity operating outside SEBI's supervisory perimeter, with no assurance about how that data is stored or who else sees it.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">The sales pitch skews the picture. It's common for platforms to lead with "this company is filing for IPO soon" or "expect 2-3x listing gains," while spending far less time on the company's actual financials, its cap table, or realistic listing timelines that can slip by years. Excitement about a future listing is not the same thing as a sound investment thesis.</span></p><h2 style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">So how do you tell a trustworthy platform from a risky one?</span></h2><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">A few checks go a long way, and none of them require specialised financial knowledge — just a habit of asking the boring questions before the exciting ones.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Start with how shares actually move. A credible unlisted-share platform will describe (or execute) settlement as an off-market transfer through CDSL or NSDL — the same depositories that hold your listed-market holdings. If a platform is vague about this, or asks you to pay first and "wait for confirmation" without a clear delivery mechanism, that's a signal worth taking seriously.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Check whether the platform, or the entity facilitating the trade, is SEBI-registered in some recognised capacity — as a research analyst, investment adviser, or stock broker — even though the unlisted-share trade itself falls outside exchange regulation. Registration doesn't make every product risk-free, but it does mean there's a compliance framework and an escalation path if something goes wrong, unlike a platform with no regulatory footprint at all.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Look at how the company itself is documented. Reasonable platforms will show you audited financials, shareholding patterns, and basic corporate filings pulled from the Registrar of Companies — not just a glossy one-pager about "explosive growth potential." If you can't find the company's CIN or verify its filings on the MCA portal independently, treat that as a red flag, not an inconvenience to skip past.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">And be honest with yourself about the pricing conversation. A platform that walks you through how a price was arrived at — recent transaction data, peer comparisons, book value — is behaving very differently from one that simply quotes a number and pushes urgency ("only a few lots left at this price").</span></p><h2 style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Where an established platform changes the equation</span></h2><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">This is also why SEBI's warning, read carefully, isn't really an argument against the unlisted market — it's an argument for choosing who you transact with inside it. Trust in this space isn't something a platform can claim on a landing page; it's something that gets built transaction by transaction, over years, in the details most investors never think to check until something goes wrong.</span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Planify is a useful example of what that looks like in practice, because the process is deliberately unglamorous. Every transaction runs through two registered entities, Planify Capital Limited and Planify Enterprises Private Limited, with a firm rule that shares are never transferred to third-party accounts — payment has to originate from the same bank account the shares are being transferred to, which closes off one of the more common fraud patterns in this market. Transfers happen through proper share transfer deeds and KYC documentation rather than a WhatsApp message and a UPI screenshot, and shares are typically credited to the buyer's demat account within T+1 working days of the paperwork clearing. Company fact sheets are shared upfront so investors are looking at financials and shareholding data before they commit, not marketing copy after.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">None of this makes unlisted investing risk-free — no amount of process removes the illiquidity or valuation uncertainty that comes with the asset class itself. But it's the difference between a platform that has something to lose if a transaction goes wrong and one that disappears the moment it does. It's also worth noting that Planify's founder, Rajesh Singla, has publicly welcomed SEBI's proposed move toward a regulated pre-IPO trading framework — the kind of structural shift that would formalise exactly the safeguards platforms like this have been building on their own for years, particularly for ESOP holders sitting on illiquid stock with nowhere else to unlock value.</span></p><h2 style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">The practical takeaway</span></h2><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Unlisted shares aren't inherently unsafe — companies like NSE and HDB Financial have genuinely rewarded early unlisted-market investors over the years. The risk isn't in the asset class; it's concentrated almost entirely in how the transaction happens and who it happens through. SEBI's repeated advisories, three times now since 2016, aren't trying to scare people away from pre-IPO investing. They're pointing at a narrower, more fixable problem: unregulated intermediaries operating with no accountability, in a market where investors often don't know what questions to ask — and pushing the industry toward the kind of process discipline that credible platforms have already been practising.</span></p><p style="line-height: 1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">One must treat a deal on such shares as seriously as they would treat buying real estate by checking the papers, knowing how the process works, and opting for a platform that has done so in silence rather than being the loudest about it all.</span></p><p style="line-height:1.38;text-align: justify"><span style="color: rgb(0, 0, 0);background-color: transparent">Please note that this article is for information purposes only and does not qualify as financial or investment advice. There are risks involved in trading unlisted and <a target="_blank" href="https://www.planify.in/pre-ipo/">pre-IPO shares</a> which may include illiquidity and valuations amongst others.</span></p>

Price discovery is opaque. There's no ticker, no live order book, no last-traded-price feed.

Is It Safe to Buy Unlisted Shares Online? A Risk & Trust Guide

<p><br></p><p style="text-align: justify"><span style="font-size: 16px">In the case of the NRI disposing of his equity in an unlisted Indian company, whether this is pre-IPO stock, start-up equity, or ownership of family firm, it is not the tax rate that becomes difficult but the whole compliance process surrounding it, which does not exist for residents.</span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong>The Rate Itself Is Straightforward</strong></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong><br></strong></span></p><p style="text-align: justify"><span style="font-size: 16px">NRIs are subject to the same capital gains tax rates as the sellers who are residents on unlisted stocks. The holding period of more than 24 months will make the capital gain long term in nature, which will be taxed at a fixed rate of 12.5% under Section 112 of the Income Tax Act, with no benefit of indexation - indexation benefit has been stripped from this category of assets for any sale post 23rd July 2024, and both Budget 2025 and Budget 2026 failed to restore it. If the gain arises within24 months, then the gain will be short term and will get added to the income slab for tax purposes. It should be noted that the rebate available under Section 87A cannot be availed by NRIs on LTCG taxable under Section 112, irrespective of the level of their income from India. The final tax outgo is also not limited to the base rate alone, as applicable surcharge, depending on the NRI's total income slab, and a 4% Health and EducationCessget added on top of the tax computed, which meaningfully raises the effective rate.</span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong>A Relief Worth Knowing:theForeign Currency Computation Benefit</strong></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong><br></strong></span></p><p style="text-align: justify"><span style="font-size: 16px">For NRIs who originallyacquiredtheir shares or debentures in an Indian company using foreign currency, the first proviso to Section 48 offers a mandatory computation benefit. Instead of computing the gain purely in rupee terms, the cost of acquisition, expenses on transfer, and sale consideration are all reconverted into the original foreign currency (typically at the average of the buying and selling telegraphic transfer rates), and the gain is worked out in that foreign currency before being converted back to rupees for tax purposes. This shields the NRI from a rupee depreciation being taxed as an artificial gain, and can, in some cases, mean little to no taxable gain at all even where the rupee-denominated sale proceeds look higher than the original investment.</span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong>Cost of Acquisition for Gifted, Bonus, Rights, and ESOP Shares</strong></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong><br></strong></span></p><p style="text-align: justify"><span style="font-size: 16px">Not every NRI seller has a straightforward purchase-and-sale history, and the manner in which the shares originally came into the NRI's hands changes how the cost of acquisition is determined.For shares received as a gift, the cost is taken as the cost to thepreviousowner who actuallypaid forthem, and the holding period also carries over from thatpreviousowner. Bonus shares are treated asacquiredatnilcost, with the holding period reckoned from the date of allotment of the bonus shares themselves.Rightsshares, on the other hand, are costed at the amount actually paid to subscribe to them, with the holding period again running from the date of allotment. Sharesacquiredthrough an ESOP carry a cost of acquisition equal to thefair market valueconsidered for perquisite taxation at the time of exercise, since that amount would already have been taxed as salary income. Getting this starting point right matters, since an error hereflows throughdirectly into the capital gains computed under Section 48 and Section 50CA.</span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong>Where It Gets More Involved: the FMV Floor</strong></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong><br></strong></span></p><p style="text-align: justify"><span style="font-size: 16px">Since there is no market price for unlisted shares, Section 50CA mandates that the fair market value, determined as per Rule 11UA (read with Rule 11UAA for the purpose of Section 50CA), is considered the deemed sale consideration instead of the actual sale consideration if the latter is lower than the former. When an NRI disposes of his shares at a price lower than this FMV, which is a typical case when the transaction takes place within the family or through a private deal, the capital gains tax will be calculated based on the FMV and not on the actual price realized. It is worth noting that certain notified transactions, such as those undertakenpursuant toapproved businessreorganisationor resolution plans, are excluded from Section 50CA, and FMV substitution does not apply to them.</span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong>TDS: The Real Point of Friction</strong></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong><br></strong></span></p><p style="text-align: justify"><span style="font-size: 16px">The burden of compliance that truly sets apart from an NRI seller from his domestic counterpart is provided in Section 195. This section requires the resident buyer to deduct TDS on the sum chargeable to tax, which, strictly speaking, isthe capital gainsportionof the sale consideration and not the entire sale value. In practice, however, buyers are often reluctant to compute the gain themselves and tend to deduct TDS on the grosssaleconsideration unless the NRI seller obtains a lower ornildeduction certificate under Section 197. Such is an extremely important provision when we take into account the fact that the consequence of this could mean that the NRI will be stuck with too much money deducted from their income and only after filing the next year's returns can they claim refunds on this amount.</span></p><p style="text-align: justify"><span style="font-size: 16px">&nbsp;A Tax Residency Certificate along with Form 10F from the NRI seller's country of residence willfacilitatethe use of Double Taxation Avoidance Agreements and hence, help the NRI pay minimal taxes or avoid the same completely. Without a valid TRC and Form 10F, DTAA benefitsgenerally cannotbe applied, and tax is usually deducted under the domestic provisions of the Income Tax Act instead.</span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 16px"><br></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong>Filing and Repatriation</strong></span></p><p style="text-align: justify"><span style="font-size: 24px"><strong><br></strong></span></p><p style="text-align: justify"><span style="font-size: 16px">NRIs must file their Indian return form, either ITR-2 if there is no business income, or ITR-3 if there is one, to settle the TDS deduction against the total tax liability and to claim a refund. Similarly, if the NRIs wish to claim the benefits of Double Taxation Avoidance Agreement (DTAA) which was not captured during the TDS stage, they will have to file their Indian return form.</span></p><p style="text-align: justify"><span style="font-size: 16px">&nbsp;The sale proceeds are subject to repatriation based on the mode in which the investment was made, i.e. if the investment was done using NRE funds, then the proceeds may be repatriated without any limit, but if the proceeds are from an investment using NRO funds, then repatriation is limited to USD 1 million per year with certification through Form 15CA/15CB. In either case, repatriationremainssubject to FEMA and RBI regulations, and the NRI will need to route the transaction through anAuthorisedDealer bank, which will independently call for its own set of documentation before remitting the funds abroad.</span></p>

For a Non-Resident Indian (NRI) selling unlisted shares of an Indian private company, the tax rate depends strictly on the holding period. Shares held for 24 months or less attract Short-Term Capital Gains (STCG) taxed at your applicable income tax slab rates, while shares held for more than 24 months qualify for Long-Term Capital Gains (LTCG) taxed at a flat rate of 12.5% without indexation benefits.

Tax Implications for NRIs Selling Unlisted Shares

<p><span style="background-color: transparent;color: rgb(0, 0, 0)">If you own shares of a private company, maybe you exercised ESOPs at a startup, invested in a friend's business, or bought shares in an unlisted company through a platform like Planify Capitals. The Income Tax Department wants to know about it. This is true whether you sold those shares this year or you're simply holding on to them.</span></p><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">This guide breaks down what "unlisted shares" mean for tax purposes, why you must report them, which ITR form to use, how to fill the relevant schedules, and how these shares are taxed.</span></p><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">Many people assume that if they haven't sold their shares, there's nothing to report. That's a common and costly mistake. Disclosure of unlisted shares is mandatory in the ITR, every single year you hold them, regardless of whether you bought, sold, or did nothing with them during the year. This is separate from reporting any profit or loss.&nbsp;</span></p><h2 style="line-height: 1.38"><span style="background-color: transparent;color: rgb(0, 0, 0)">Which ITR Form Should You Use?</span></h2><p><span style="background-color: transparent;color: rgb(0, 0, 0)"><strong>ITR-1 (Sahaj): Not Allowed</strong></span><br></p><p><span style="background-color: transparent;color: rgb(0, 0, 0)">This is the simplest form, meant for salaried people with straightforward income (salary, one house property, interest income, and small agricultural income). It has no schedule at all for shareholding or capital gains on unlisted shares.</span></p><p><span style="background-color: transparent;color: rgb(0, 0, 0)"><br></span></p><p></p><p style="line-height:1.38"><strong><span style="color: rgb(0, 0, 0);background-color: transparent">ITR-4 (Sugam): Not Allowed&nbsp;</span></strong></p><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">This is the presumptive-taxation form for small businesses and professionals. Like ITR-1, it has no provision to report unlisted shareholding or capital gains from such shares, so it cannot be used either.&nbsp;</span></p><p style="line-height: 1.38"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38"></p><h3 style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">ITR-2: Allowed</span></h3><p><span style="color: rgb(0, 0, 0);background-color: transparent">Use this if you have:</span></p><ul><li style="color: rgb(0, 0, 0)"><span style="background-color: transparent">Salary or pension income</span></li><li style="color: rgb(0, 0, 0)"><span style="background-color: transparent">Capital gains (including from unlisted shares)&nbsp;<br></span></li><li style="color: rgb(0, 0, 0)"><span style="background-color: transparent">Income from house property<br></span></li><li style="color: rgb(0, 0, 0)"><span style="background-color: transparent">Other income (interest, dividends, etc.)<br></span></li><li style="color: rgb(0, 0, 0)"><span style="background-color: transparent">No income from a business or profession</span></li></ul><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">ITR-2 contains the two key sections: the shareholding disclosure (a general schedule that covers directorships and unlisted equity holdings) and Schedule CG for reporting any capital gain or loss on sale.</span></p><p style="line-height: 1.38"><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><p style="line-height: 1.38"></p><h3 style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">ITR-3: Allowed</span></h3><p><span style="color: rgb(0, 0, 0);background-color: transparent">Use this if, in addition to holding unlisted shares, you also have income from a proprietary business or profession (freelancing, consulting, running a shop, trading as a business, etc.). ITR-3 includes everything ITR-2 does, plus additional schedules for business income, balance sheet, and profit &amp; loss.</span><br></p><p><span style="color: rgb(0, 0, 0);background-color: transparent"><br></span></p><h2><span style="color: rgb(0, 0, 0);background-color: transparent">The Shareholding Disclosure: Details of Unlisted Equity Shares</span></h2><p><span style="color: rgb(0, 0, 0);background-color: transparent">​</span></p><div style="margin-left:0pt"><table><tbody><tr><td><p style="line-height: 1.2"><span style="color: rgb(0, 0, 0);background-color: transparent"><strong>Detail Required</strong></span></p></td><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent"><strong>Meaning</strong></span></p></td></tr><tr><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Name of the company</span></p></td><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Full legal name&nbsp;</span></p></td></tr><tr><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">PAN of the company&nbsp;</span></p></td><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">The company's own PAN&nbsp;</span></p></td></tr><tr><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Opening balance&nbsp;</span></p></td><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Number of shares you held at the start of the financial year&nbsp;</span></p></td></tr><tr><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Shares acquired during the year&nbsp;</span></p></td><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Number of shares bought/received, date of acquisition, face value, and issue price&nbsp;</span></p></td></tr><tr><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Shares transferred during the year&nbsp;</span></p></td><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Number of shares sold, along with sale consideration&nbsp;</span></p></td></tr><tr><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Closing balance&nbsp;</span></p></td><td><p style="line-height:1.2"><span style="color: rgb(0, 0, 0);background-color: transparent">Number of shares you hold at the end of the financial year&nbsp;</span></p></td></tr></tbody></table></div><p><span style="color: rgb(0, 0, 0);background-color: transparent">​</span></p><h2><span style="color: rgb(0, 0, 0);background-color: transparent">How the Capital Gain Is Taxed</span></h2><p style="line-height:1.38"><span style="color: rgb(43, 45, 56);background-color: transparent">If you sold any shares during the year, you will also need to report the profit or loss under Schedule CG, which is the Capital Gains schedule. This is how the tax works for the Capital Gain.</span></p><p style="line-height: 1.38"></p><p style="line-height:1.38"><span style="font-size:15px;color:#2b2d38;background-color:transparent">To figure out the tax on the Capital Gain you have to follow a steps.</span></p><h3 style="line-height:1.38"><span style="color: rgb(67, 67, 67);background-color: transparent">Step 1 is to determine how long you held the shares.&nbsp;</span></h3><p style="line-height:1.38"><span style="color: rgb(43, 45, 56);background-color: transparent">For shares the time period is different from listed shares.</span><span style="color: rgb(0, 0, 0);background-color: transparent">&nbsp;</span></p><ul><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height:1.38"><span style="color: rgb(43, 45, 56);background-color: transparent">If you held the shares for more than 24 months it is considered a Long-Term Capital Gain.</span><span style="color: rgb(0, 0, 0);background-color: transparent">&nbsp;</span></p></li><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height:1.38"><span style="color: rgb(43, 45, 56);background-color: transparent">If you held the shares for 24 months or less it is considered a Short-Term Capital Gain.</span><span style="color: rgb(0, 0, 0);background-color: transparent">&nbsp;</span></p></li></ul><h3 style="line-height:1.38"><span style="color: rgb(67, 67, 67);background-color: transparent">Step 2 is to apply the tax rate to the Capital Gain.&nbsp;</span></h3><ul><li style="color: rgb(43, 45, 56);background-color: transparent"><p style="line-height:1.38"><span style="background-color: transparent">The Long-Term Capital Gain on shares is taxed at a flat rate of 12.5 percent. It is also important to note that you do not get the indexation benefit for the Capital Gain on shares. This rule changed with the Finance Act 2024. It has been in effect since 23 July 2024. You also do not get the exemption of ₹1.25 lakh for the Capital Gain, on shares. This exemption only applies to listed shares under Section 112A for the Capital Gain.</span></p></li><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height:1.38"><span style="background-color: transparent">STCG on unlisted shares is added to your total income and taxed at your regular income tax slab rate; there's no special flat rate like there is for listed shares.</span></p></li></ul><h3 style="line-height:1.38"><span style="color: rgb(67, 67, 67);background-color: transparent">Step 3: Calculating Cost of Acquisition (Important for ESOPs)</span></h3><p style="line-height:1.38"><span style="color: rgb(0, 0, 0);background-color: transparent">For most purchases, your cost of acquisition is simply what you paid for the shares. But for ESOPs, it's a little different:</span></p><p style="line-height:1.38"><span style="color: rgb(43, 45, 56);background-color: transparent">The cost of getting the shares is usually the Fair Market Value of the shares on the day you got them. For companies that are not listed on the stock market this value is calculated using a method under Rule 11UA of the Income Tax Rules.</span><span style="color: rgb(0, 0, 0);background-color: transparent">&nbsp;</span></p><h3 style="line-height:1.38"><span style="color: rgb(67, 67, 67);background-color: transparent">Step 4: Put It in Schedule CG</span></h3><ul><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height:1.38"><span style="background-color: transparent">Short-term gains go into the section for "Sale of assets other than listed shares/securities," commonly labeled Section A5 in Schedule CG.</span></p></li><li style="color: rgb(0, 0, 0);background-color: transparent"><p style="line-height:1.38"><span style="background-color: transparent">Long-term gains go into the corresponding long-term section, commonly labeled Section B9.</span></p></li></ul><h2 style="line-height: 1.38">​<strong><span style="color: rgb(0, 0, 0);background-color: transparent">What If You Incure a Loss?</span></strong></h2><ul><li>A short-term capital loss can be set off against both short-term and long-term capital gains from any capital assets</li><li>A long-term capital loss can only be set off against long-term capital gains.</li><li>Unused losses can be carried forward for 8 assessment years, but only if you file your return on time and formally declare the loss.</li><li>Capital losses cannot be adjusted against your salary or business income, they only offset other capital gains.</li></ul><p>Telling the tax authority about shares can seem like a lot of extra work but it is really just two simple things: tell them what shares you have every year and report any sales correctly with the right details, about how long you had the shares and what they cost you.</p>

This guide breaks down what "unlisted shares" mean for tax purposes, why you must report them, which ITR form to use, how to fill the relevant schedules, and how these shares are taxed.

How to Declare Unlisted Shares in Your ITR

<h2>Business Overview</h2><p>Krasny Defence Technologies Ltd. (KDTL) is a niche defence engineering and lifecycle support company serving the Indian Navy, Indian Coast Guard, defence shipyards and Russian defence OEMs. Established in 1995, the company specializes in ship refits, repairs, lifecycle support, supply of defence spares, shipbuilding support and indigenous defence products under the Make in India initiative. Over three decades, KDTL has built strong customer relationships and technical expertise, enabling it to secure repeat defence contracts. CRISIL noted that the company reported revenue of <strong>₹107 crore in FY2025</strong> and had an <strong>order book of ₹712 crore</strong> as of September 2025, providing healthy medium-term revenue visibility.</p><h2>Business Model</h2><p>KDTL follows an asset-light, engineering-led business model focused on providing lifecycle support and specialized engineering services rather than manufacturing defence platforms. The company undertakes naval ship refits, repairs, equipment overhaul, wiring, cabling, fabrication and supplies Russian-origin defence spares while also developing indigenous products under the Make in India initiative. It collaborates with Russian and Indian defence partners through strategic joint ventures, allowing it to leverage technology and customer access without significant capital investment. Its diversified offerings, niche product portfolio and long-standing relationships with defence customers have enabled the company to maintain healthy operating margins of around <strong>20%</strong> while expanding into new business segments.</p><h2>Business Moat</h2><ul><li>​Strong Regulatory Approvals<br></li><li>Long-standing Customer Relationships<br></li><li>Niche Product Portfolio<br></li><li>Asset-Light Business Model&nbsp;<br></li></ul><h2>​Key Business Partners &amp; Joint Ventures<br></h2><ul><li><strong>Indian Navy</strong> – Ship refits, repairs, lifecycle support and defence equipment supply.</li><li><strong>Indian Coast Guard</strong> – Vessel maintenance and repair contracts.</li><li><strong>Zvezda Shipbuilding Complex (Russia)</strong> – Shipbuilding support and engineering services.</li><li><strong>Russian Defence OEMs</strong> – Technology collaboration and supply of defence equipment and spares.</li><li><strong>Avrora Scientific &amp; Production Association</strong> – Submarine control systems and sensors.</li><li><strong>Paras Defence</strong> – Electro-optics, radar and navigation equipment.</li><li><strong>Keltron</strong> – Indigenous sonar and radar development under the Make in India initiative.</li></ul><h2>Financial Performance</h2><p>​<br></p><table><tbody><tr><td><div><strong>Particulars</strong></div></td><td><div><strong>FY24</strong></div></td><td><div><strong>FY25</strong></div></td><td><div><strong>y-o-y growth</strong></div></td></tr><tr><td><div>Operating Revenue (₹ Cr.)</div></td><td><div>45</div></td><td><div>107</div></td><td><div>136.6%</div></td></tr><tr><td><div>PAT (₹ Cr.)</div></td><td><div>6.</div></td><td><div>15</div></td><td><div>129.9%</div></td></tr><tr><td><div>PAT Margin</div></td><td><div>15%</div></td><td><div>14%</div></td><td><div><br></div></td></tr><tr><td><div>Operating Margin</div></td><td><div>20%</div></td><td><div>20%</div></td><td><div><br></div></td></tr><tr><td><div>Order Book (Sep-25)</div></td><td><div><br></div></td><td><div>₹712&nbsp;</div></td><td><div><br></div></td></tr></tbody></table><p><br></p><table><tbody><tr><td><div><strong>Ratios</strong></div></td><td><div><strong>FY24</strong></div></td><td><div><strong>FY25</strong></div></td></tr><tr><td><div>Adjusted Debt / Net Worth</div></td><td><div>0.44x</div></td><td><div>0.33x</div></td></tr><tr><td><div>Interest Coverage</div></td><td><div>20x</div></td><td><div>31x</div></td></tr><tr><td><div>PAT Margin</div></td><td><div>14.8%</div></td><td><div>14.4%</div></td></tr><tr><td><div>Current Ratio</div></td><td><div><br></div></td><td><div>4.63x</div></td></tr></tbody></table>

Krasny Defence Technologies: Building India's Naval Defence Support Ecosystem

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