The Unlisted Share Transfer Process, From SPA to Settlement

# The Unlisted Share Transfer Process, From SPA to Settlement

Unlisted shares change hands through an **off-market transfer** — a direct demat-to-demat movement with no exchange in the middle. The mechanics are standardised; the sequencing is where sellers get burned. Here is the order that protects you. (This is the seller-side view of the full selling process; the buyer-side walkthrough lives at transferring unlisted shares between demat accounts.)

1. The agreement comes first

A share purchase agreement (SPA) fixes the price, quantity, payment terms, and each side's representations before anything moves. In a platform sale, the platform's transaction documents play this role; in a private deal, get one drafted rather than relying on a chat thread. The two clauses that matter most to a seller: when payment happens relative to the transfer, and what happens if either side fails to complete.

2. Company-side approvals: know which kind of company you hold

• Public unlisted company (many of the widely traded names): demat shares are freely transferable — no company consent needed.
• Private limited company: the articles of association typically restrict transfers. Expect a **right of first refusal (ROFR) — existing shareholders get the chance to buy at your agreed price first — and sometimes board approval** of the transferee. The process takes the time the articles say it takes.
• ESOP-sourced shares may carry scheme-specific conditions on top.

Skipping this step does not make it disappear; it makes it surface *after* you have committed — one of the classic ESOP selling mistakes.

3. The instruction: DIS, or its electronic equivalent

The transfer itself is a **Delivery Instruction Slip (DIS)** — physical or electronic — from you to your depository participant, containing:

• the **ISIN** and quantity,
• the buyer's demat coordinates — a 16-digit BO ID on CDSL, or DP ID + Client ID on NSDL,
• the execution date and the off-market reason code, and
• your authorisation — a signature on a physical slip, or depository-authenticated approval via CDSL's or NSDL's online e-DIS facility through your broker.

A small stamp duty on off-market transfers is collected through the depository on the consideration amount. Get the buyer's demat details in writing from the buyer and match them character for character — a mis-keyed BO ID is the most common rejection.

4. Verification and payment — in the right order

Never let shares leave your demat before the payment leg is secured. The safe sequences are: payment into escrow before transfer, or a platform flow where the transfer is verified before funds release. On Polemarch, once the transfer is executed and verified, payment settles to your bank within T+2 working days of verification.

Where transfers actually fail

1. 1Demat detail mismatch — wrong BO ID or a name mismatch against the buyer's account.
2. 2Frozen or restricted ISIN — corporate actions can suspend transfers temporarily.
3. 3Signature mismatch on a physical DIS against the DP's records.
4. 4Skipped ROFR surfacing late in a private-limited transfer.
5. 5Documents missing at verification — the checklist is in documents needed to sell unlisted shares.

Selling through Polemarch's sell desk puts the sequencing — agreement, approvals, instruction, verification, payout — on rails, with the deal desk chasing each step.

Ready to sell? Start with one request

If you hold unlisted shares, pre-IPO stock, or vested ESOPs, Polemarch's sell desk gives you three routes from a single submission: a direct purchase offer from Polemarch itself (the Polemarch Guarantee — the guarantee is that Polemarch is the buyer, not a promise about price or return), an assisted sale worked through our buyer network, or a waitlist entry that alerts us the moment matching demand appears. Submit the company, quantity, and your price expectation at /dashboard/sell — you see the offer before you commit to anything, and once a transfer is verified, payment settles to your bank within T+2 working days.

*Published by the Polemarch editorial team. Educational only — not investment, legal, or tax advice.*