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# How to Verify Unlisted Shares Before Buying — 5 Checks That Take Under 10 Minutes
India's unlisted share market has no exchange-level fraud prevention. Every buyer is responsible for their own due diligence. The good news: five quick checks — none requiring specialist knowledge — can catch the vast majority of fraudulent offers before any money leaves your account.
Disclaimer: This article is educational. Completing these checks reduces but does not eliminate risk. Do not invest more than you can afford to lose in unlisted shares.
Check 1: Verify the ISIN on the Depository Website
Every legitimate unlisted share has an ISIN (International Securities Identification Number) — a 12-character code starting with "IN" that is registered with CDSL or NSDL.
How to check:
- 1Go to cdsl.co.in → Investor → ISIN Details (or nsdl.com → Investor → ISIN Search)
- 2Enter the ISIN provided by the seller
- 3The company name, share class, and face value should appear
What a failed check looks like: The ISIN returns no results, or the company name in the search result doesn't match what the seller told you.
Time: 2 minutes
Check 2: Confirm the Company Exists on MCA Portal
Every company registered under the Companies Act has a Corporate Identity Number (CIN) on the Ministry of Corporate Affairs portal.
How to check:
- 1Go to mca.gov.in → MCA Services → Master Data → Company/LLP Master Data
- 2Search by company name or CIN
- 3Verify: company status should be "Active", and the paid-up capital should be consistent with the number of shares being offered
What to look for:
- Status: Active (not "Strike Off" or "Under Liquidation")
- Authorised share capital: should accommodate the shares being sold
- Registered office: should be a real address, not a PO box
Time: 3 minutes
Check 3: Ask for the Seller's BO ID and Verify Ownership
The seller should be able to provide their CDSL BO ID (16-digit number starting with 12) or NSDL DP ID + Client ID before any money is transferred. This proves:
- The shares are held in a real demat account
- The person you're talking to has control over that account
How to verify: Ask for a screenshot of their demat holding statement showing the ISIN, number of shares, and account details. While you cannot independently verify the holding without the seller's permission, the existence of a BO ID linked to the correct ISIN is a meaningful assurance.
Platforms like Polemarch verify seller demat holdings before listing any shares — this check is done for you.
Time: 1–2 minutes (if seller is cooperative — and they should be)
Check 4: Confirm Demat Delivery in Writing
Before transferring any money, get written confirmation that shares will be delivered to your specific CDSL or NSDL demat account (identified by your BO ID), via an off-market DIS transfer.
The confirmation should specify:
- Your BO ID as the destination
- The ISIN and quantity being transferred
- The expected delivery date
If the seller says delivery works "differently" for unlisted shares, or that they will hold the shares "on your behalf" — walk away.
Time: 2 minutes to request and receive written confirmation
Check 5: Demand an Invoice Before Payment
A written invoice protects you in three ways:
- 1Legal evidence of the transaction
- 2Capital gains proof — you will need the cost of acquisition when you eventually sell
- 3Fraud deterrent — fraudsters avoid documentation
The invoice should include: company name, ISIN, shares quantity, price per share, total amount, stamp duty, buyer name, seller details, and delivery timeline.
If the seller refuses to issue an invoice, the transaction is either cash-in-hand (illegal) or a scam. Both are reasons to stop.
Time: 1 minute to request; review before paying
Summary: Your Pre-Purchase Checklist
| Check | Where | Time | |---|---|---| | ISIN valid? | cdsl.co.in / nsdl.com | 2 min | | Company active on MCA? | mca.gov.in | 3 min | | Seller BO ID provided? | Ask the seller | 2 min | | Demat delivery confirmed in writing? | Ask the seller | 2 min | | Invoice requested? | Ask the seller | 1 min |
Total: under 10 minutes. Any seller who resists these five checks has given you the most important answer of all.
*Published by the Polemarch editorial team. Not investment advice.*