Pre-IPO and Post-IPO Shares: Difference, Features & Benefits

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Know about the differences between pre-IPO and post-IPO shares, including their unique qualities, benefits, and investment opportunities. Discover how early entrance into promising firms and diverse portfolios could enhance investing strategies in a rapidly changing stock market.

The surge in Initial Public Offerings (IPOs) in the Indian stock market in recent times has attracted significant investor attention. Often, though, pre-IPO shares are overlooked, despite the excitement surrounding initial public offerings. These shares, also referred to as unlisted shares, are part of a growing market that brings in a variety of investors, including retail, high-net-worth individuals (HNIs), and institutions. 

Let us take a look at the difference between pre-IPO and post-IPO shares, along with the added advantages they offer to investors.

Highlights of the Blog:

  • Difference between Pre-IPO and Post-IPO Shares

  • Growth Potential of Pre-IPO Stocks

  • Benefits of Pre-IPO and Post-IPO Shares

Pre-IPO and Post-IPO Shares: Understanding the Distinctions

Pre-IPO Shares:

Pre-IPO shares are the shares of ownership in organisations that haven't submitted an IPO application yet. Accredited investors, institutional investors, private equity firms, and venture capitalists commonly buy these shares. Buying pre-IPO shares allows investors to participate in a business at an early stage, with the possibility of significant returns as the firm gets closer to its initial public offering.

Post-IPO Shares:

Shares that are eligible for trading on public stock exchanges after a successful initial public offering are referred to as post-IPO shares or listed shares. Institutional and individual investors can access these shares through the secondary market. The advantage of post-IPO shares is their liquidity, which enables buying and selling in accordance with the present market price.

Investing in Pre-IPO Shares

Pre-IPO shares allow you to participate in companies even before they become public, whereas IPOs allow you to do so when they become public. A diverse spectrum of investors, including both retail and institutional giants, are drawn to this expanding market purchasing unlisted shares of these companies might result in significant profits as they get closer to and beyond their IPOs (Initial Public Offering). Pre-IPO investments also provide investors early access to innovative, rapidly growing companies, allowing them to diversify their holdings and perhaps outpace conventional market indices.

The Growth Potential of Pre-IPO Stocks

The following are the main factors to think about when purchasing pre-IPO shares:

Getting Early Access to Up-and-Coming Companies

Purchasing pre-IPO shares allows investors to get involved with companies early on, often before they become widely recognised. This early entry offers a chance to benefit from promising companies' development potential as they get ready for their initial public offering (IPO) and beyond.

Accessibility to Cutting-Edge and Quickly Growing Businesses: 

A lot of pre-IPO companies are involved in high-growth industries and have exciting new products or services, cutting-edge technologies, or inventive business plans. Purchasing pre-IPO shares exposes investors to these companies and gives them the chance to profit from their rapid growth.

Potential for Value Growth:

Companies often see significant increases in revenue, market share, and valuation as they get closer to their initial public offering (IPO). The worth of investors' pre-IPO shares might rise as a result of the pace shift. Moreover, pre-IPO shares might offer significant profits since they are usually priced cheaper than their post-IPO value.

Limited Availability and Demand Trends:

Pre-IPO shares are usually only offered in small quantities, and demand often outpaces supply. Investor competition for ownership may drive up the value of pre-IPO shares due to their limited availability. Because there is a smaller supply and a greater demand for pre-IPO stocks, their growth potential is stronger.


In general, pre-IPO shares are less expensive than their possible/potential post-IPO worth. The goal of this reduced pricing is to attract early investors and lessen the risks involved with making investments in privately held companies.

Diversification of Portfolios:

Pre-IPO stocks increase portfolio diversification, decrease association with publicly traded stocks, and potentially lower total risk when included in an investment portfolio.


For investors hoping to profit from new investment avenues, they must comprehend the key differences between pre-IPO and post-IPO shares. Pre-IPO shares offer a rare opportunity for early entry into promising companies with great growth possibilities. Investors can handle the volatile stock market and make wise investment decisions by being aware of the features and advantages of pre-IPO shares. There are many options to invest in a company's growth before it goes public as the market for unlisted shares opens up to regular investors. For pre-IPO investors, however, limiting risks and maximising returns demands thorough research and due diligence.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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