More often unlisted firms are smaller in size and are yet to reach a stage where they can go public to avail funds for their capital requirements. As a result, investing when the company is small and being invested through its growth, and its IPO often yields higher returns.
Stocks of unlisted companies are often either undervalued or overvalued for long periods of time. As an investor, if one invests when the stock is undervalued, then one can gain significant returns on the investment.
Unlike listed shares, the prices of unlisted equity shares are relatively stable and less prone to market fluctuations.