Which companies lenders will look at
Appetite concentrates around companies with a recent institutionally led priced round, a filed or credible IPO path, or an active grey and secondary market with observable transactions. A holding in a profitable but privately held family business is a different conversation, usually solved with property or business-cash-flow security instead.
Valuation and advance rate
Valuation is taken from the last priced round, recent secondary transactions, or an independent valuation — usually the most conservative of the three, with a further discount applied. Advance rates sit well below listed-equity levels, reflecting the absence of a liquid exit.
Security and documentation
Where the articles permit, shares are pledged in dematerialised form. Where they do not, lenders rely on a combination of undertakings, escrow over sale proceeds, power of attorney and, frequently, supplementary collateral.
Shareholder agreements matter more than borrowers expect: transfer restrictions, rights of first refusal and drag provisions can each block enforcement, and lenders read them closely before committing.
- Articles and shareholder agreement reviewed for transfer and pledge restrictions
- Demat pledge where permitted; escrow and POA where not
- Independent or last-round valuation with a discount to advance rate
- Supplementary collateral common at higher ticket sizes
Common questions
Can I borrow against unlisted shares in India?
Yes, from a narrow set of lenders. Appetite is strongest where the company has a recent institutionally led priced round, a credible IPO path, or observable secondary transactions.
How are unlisted shares valued for a loan?
Lenders take the most conservative of the last priced round, recent secondary transactions and an independent valuation, then apply a further discount when setting the advance rate.
What if my shareholder agreement prohibits pledging?
Lenders then rely on undertakings, escrow over sale proceeds and power of attorney, often alongside supplementary collateral. Transfer restrictions and rights of first refusal are reviewed before any commitment.
Every facility described here is arranged case by case, across our full range of mandates and using the desk process. A first conversation is confidential and carries no obligation.
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