Unlisted Shares vs. Public Provident Funds.

Have you ever felt like you missed out on an incredible opportunity? Well, we're about to reveal a gem that's often overlooked but offers better returns than traditional investment avenues. Join us as we explore the world of Unlisted Shares with Precize and compare it to the trusted Public Provident Fund (PPF).

Let’s start with an introduction to the Public Provident Fund. 

What is a Public Provident Fund (PPF)? 

The Public Provident Fund (PPF) is a long-term investment option marketed as a government-backed scheme with non-market-linked investments. 

Features of Public Provident Fund (PPF). 

• The PPF has a period of 15 years, which can be prolonged in 5-year increments if desired.

• PPF permits a minimum investment of INR 500 and a maximum investment of INR 1.5 lakh per financial year.

• The account can be started with just INR 100 as an opening balance. Investments of more than INR 1.5 lakh per annum will not be paid interest income and, therefore, will not be subject to tax benefits.

• Deposits into a PPF account must be made at least once a year for 15 years.

Now you know enough about the Public Provident Fund. Therefore, we are in an excellent position to compare it with Unlisted Shares. 

Let’s talk about ‘Returns.’

Public Provident Funds returns quarterly from the second quarter of 2016.

Unlisted Shares vs. CPI Inflation. 

To understand it in a more familiar context, let’s see how your investments would have performed if you had invested in either of the abovementioned investments. 

One of India’s oldest unlisted companies, Reliance Industries Limited, went public in 1977. Yes, even before SEBI was formed! The company has since then generated a CAGR of 19.69%, along with an additional 1.5% as annualized returns from dividends.

Therefore, if you had invested INR 4,30,000 (which is equal to the total investment made in PPF in 43 years) in the shares of RIL in 1977and the current value of your investment would have skyrocketed to INR 97,71,39,873.66 at 19.69%.

Similarly, suppose your yearly investments in the Public Provident Fund (PPF) amounted to INR 10,000, and you continued to invest for the next 43 years. In that case, the math says that the final value of your investment will be equal to INR 27,29,724 with 7.1% as the offered interest rate. 

Winding up. 

It’s pretty evident that investing in high-growth unlisted companies is a comparatively better deal than investing in the hallmark of safety, especially when you are young. As per a report published in the Business Standard, only 3.7% of 1.36 billion Indians invest in stock markets. Let alone the Unlisted Shares! 

Well, you haven’t lost the opportunity yet. See, with India being the third-largest startup ecosystem in the world, there is going to be an inevitable flood of unlisted shares, which means that there will be a plethora of opportunities to invest in! We here at Precize understand this, so we are offering you a holistically technology-driven platform that can help you invest in unlisted shares to unlock the real potential of your investment portfolio.