Several listed shares see volumes of only one share or 10 shares in a day, which means if you hold more than this, you cannot offload your holding. You have to negotiate since there is no fixed price," he says.
Shares traded on regional stock exchanges became illiquid due to lack of trading on these exchanges after the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) spread operations at the national level.: Investing in bonus issues Now, if a security is not listed and is illiquid, why is there a market for it? Kamal Kant Mishra, a New Delhi-based investor who buys such securities, says returns are attractive but risk is 100 per cent. Mishra says his investment in one such stock about 35 years ago has given him great returns.
"I bought OMDC (Orissa Minerals Development Company) shares for Rs 2.50 per share. OMDC, one of the oldest iron ore mining companies in India, was listed on the Bombay Stock Exchange (BSE) in August 2010.
It made a stellar debut, hitting the 5 per cent upper circuit at Rs 20,475 per share. Though the company was listed all this while on the Calcutta Stock Exchange, trading did not take off due to stringent margin requirements.
"The parameters are the same as that used to value a listed company.
The only thing is that the value of unlisted or suspended company is 40-50 per cent less than a listed company in the same business," says Rajan Shah, chairman and managing director, 3A Capital Services. "Generally, the scope of price negotiation is up to 10 per cent, but may depend on the stock," says Shah.: Beaten down stocks that may turn hot again Market conditions also play a part.
P., (the "Shelbourne II Operating Partnership") and Shelbourne Properties III, L. (the "Shelbourne III Operating Partnership" and collectively with the Shelbourne I Operating Partnership and the Shelbourne II Operating Partnership, the "Shelbourne Operating Partnerships"), respectively. It is our opinion that the Liquidating Trusts will not be issuers of "equity securities" within the meaning of Sec. Each Liquidating Trust will operate solely for the purpose of liquidating and distributing the cash and the cash proceeds from the liquidation of the assets transferred to it, and will terminate upon the complete distribution of the trust corpus or the expiration of a period of three years from the date the assets were first transferred to it.
As of the date hereof, Shelbourne I, Shelbourne II and Shelbourne III had 839,286, 894,792 and 788,772 shares of common stock outstanding, respectively, and as of January 31, 2004 had 1,710, 2,467 and 1,256 stockholders of record, respectively. Without limiting the foregoing, the Liquidating Trust will have no objective to continue or engage in the conduct of any trade or business.
This letter supersedes and replaces our prior letter.
If you own illiquid shares which you are not able to sell in the open market, don't worry.
Several companies, such as 3A Capital Services, Kajaria Securities and Finance and Abhishek Securities, buy such shares. Because there is no exchange for such shares, the price is arrived at by the buyer companies and is usually 40-50 per cent less than the valuation of companies in the same business that are listed.
Shares become illiquid or non-tradable if their trading is suspended by stock exchanges or there are very few investors interested in them.
Normally, volumes give a hint if a stock is likely to be in the illiquid category.