Shares can be divided into 5 phases:
1. PreIPO - When a new company is formed and shares are issued then with time as the company grows the value of shares also increases.
2. Listed Shares - When an organization becomes so big that it needs public funding for further advancement then it applies for an IPO and gets listed on a stock exchange.
3. Stopped Trading - When shares of a company become inactive due to less or interest by investors. for example Taparia Tools which shares stopped trading due to less volume.
4. Delisted - When a company delists its shares from the exchange due to various reasons:
- Company has been consistently making losses.
- Lack of investors’ interest in the company’s shares has forced exchange to delist the company.
5. Liquidation - When a company decides to de-register itself then it goes into the liquidation phase.
a)PreIPO is Secondary Sale and not Primary Investment in companies?
PreIPO shares transactions are similar to the ones that happen on the stock exchange. The only difference is that in PreIPO there is no exchange and the shares are transferred from Demat to Demat.