Indian Equity Markets

Indian equity markets have delivered good returns for investors over the years. The relatively young Indian economy, with a host of ongoing reforms, is likely to deliver higher returns in the future.

What is Equity/Share?

The company’s total share capital is divided into equal small-denomination units, and each unit is called a share.

How do you understand the stock market? 

The Securities Contracts (Supervision) Act of 1956 [SCRA] defines a stock exchange as any group formed to assist, regulate, or control the trading or securities trading business, whether established or not. The stock exchange can be a regional stock exchange or a national stock exchange.

PRIMARY MARKET

• Here, the issuer raises funds by issuing securities to investors for the first time.

 • Securities are given by the company directly or through an intermediary.

SECONDARY MARKET

• Only promote the trading of issued securities. 

• The secondary market makes assets available for sale.

 • Ownership of existing securities will get exchanged between investors.

TERMINOLOGIES ASSOCIATED WITH CAPITAL MARKET:

Debentures– These are bonds that are not secured by specific property or collateral. Besides, they are backed by the full faith and credit of the issuer, and bondholders have a general claim on assets that are not pledged to other debt.

Stock Trading: Selling and Buying stocks is called stock trading.

Equity: Equity is the money cautiously invested in a firm to finance its operations. It generally has a lock-in period during which they are not traded on the stock exchange. At the time of listing, equity is in the form of shares, and it provides ownership of the company to the shareholder.

Debt: Debt refers to borrowing by a company from an institution or an individual which necessarily has to be paid at a future date.

Venture capital: Venture Capital is the money provided by investors to start-up firms and small businesses with perceived long-term growth potential.

Initial Public Offering: Initial public offering (IPO) is the first sale of stock by a private company to the public.

Bear Market: Bear Market implicates a period in which the prices of equity shares fall consistently.

Bull Market: An negation of bear market, a bull market situation in which the prices of the stocks are increasing over a prolonged period.

American Depository Receipts (ADR): ADR in stock gets traded in the United States but represents a specified number of shares in a foreign corporation.