FAQ's about Equity

What are Equities?
Equity is a part of a company, also known as stock or share. When you buy shares of a company, you basically own a part of that company. A company`s stockholders or shareholders all have equity in the company, or own a fractional portion of the whole company. They buy the shares because they expect to profit when the company profits. There are two basic types of shares that any company issues: equity shares and preference

Shares.
A. Equity Shares
Both public and private corporations issue equity shares. Equity shareholders are the owners of a company and initially provide the equity.

  • capital to start the business.
  • Equity share ownership in a public company offers many benefits to investors. The following are some of its main advantages:
  • Capital appreciation
  • Dividends 
  • Voting privileges 
  • Liquidity - shares can easily be bought or sold 
  • Dividend tax credit and capital gains tax

There are also a few drawbacks of owning equity shares. Although part owners of the business, common shareholders are in a weaker position.
Senior creditors, bondholders and preferred shareholders have prior claims on the earnings and assets of a company. While interest payments are guaranteed to bond holders, dividends are payable to shareholders at the discretion of the directors of a company.

B. Preference Shares
A preference share is a type of share capital that generally enables shareholders to fixed dividends ahead of the company`s common shares and to a stated rupee value per share in the event of liquidation. Typically, the preferred shareholder occupies a position between that of a company`s creditors and its common shareholders.
As preferred shares have characteristics of both debt and equity, they provide a link between the bond and common equity sections of a portfolio. One shortcoming of preferred shares is that many are non-voting. However, after a specified number of preferred dividends are withheld, voting rights are usually assigned to preferred shareholders

Why invest in equities?
Investing in shares offers many benefits over other asset classes like a high level of liquidity which gives you ready access to your money.

There are over 6000 companies listed on the stock market in which you can buy shares, so there are plenty to choose from to match your investment needs.

Other benefits include:
A. Returns:
Stocks can help you build long-term growth into your overall financial plan. Over a longer period of time, shares can produce significant capital gains through price appreciation. Some companies also issue free or bonus shares to their shareholders as another way of passing on company profits or increases in their net worth. Stocks, as an asset class, have outperformed most other type of investments over longer periods of time.

In addition, stocks pay dividend income, which has the potential to grow overtime. Shares that pay regular dividends are called income stocks. These companies have capital appreciation potential and when dividends are reinvested into additional shares, there is also the potential to compound investment returns.

B.Ownership:
Stock represents an ownership or equity stake in a corporation. If you are a stockholder, you own a proportionate share in the company’s assets.

That means you gain a part of the ownership of the company.

C. Tax Benefits:
Investment in shares reaps great tax benefits. The dividend income generated on shares is completely tax-free. Long-term capital gains arising on equity investment is not taxed by the government. That means, if you invest in a company and keep the shares for 12 months, you don’t need to pay any tax on income you earn on selling the shares after 12 months. Short term capital gains tax on shares is also just 10%, while investment in other asset classes attracts short-term capital gains tax of 30%.

D. Control over your financial future:
You can decide exactly how your money is invested, enabling you to have utmost control over your finances. You can choose to invest independently using your knowledge and expertise, share this responsibility with Genext wealth advisor who can advise you on what shares to buy and sell or ask Genext wealth advisor to manage portfolio for you.

What are the frequently used terms when investing in equities?

A. Bid:
This represents the highest price a prospective buyer is willing to pay for a stock.
B.Offer (Ask):
This represents the lowest price a prospective seller is willing to accept for a stock.
C. Market Order:
An order to buy or sell a specified number of shares at the best available price at the time the order is received on the exchange floor. All orders not bearing a specific price are usually considered "at the market" which could mean paying the "offer" when buying or accepting the "bid" when selling.
D. Limit Order:
An order for which you request a specific price at which the transaction may be executed.
E. Stop Buy and Stop Loss Orders:
Orders to buy or sell that are placed above or below the current market price, which become active orders when the price of a board lot rises or falls to the specified price. These orders may be placed to execute at the market, at a specified limit or within a specified price range. A stop buy order can be used to protect against losses in a short sale, whereas a stop loss order can be used to protect a paper profit or to limit a possible loss when you already own the shares. Not all stock exchanges will accept these orders. Stop buy and stop loss orders are risky because they may not necessarily fill at the specified price but at the best possible price available at that time.

How do you ensure the security and privacy of my account?
Only you know your Login ID and Password, as these are stored in encrypted form with us.
Issue Related Terms & FAQs
A. Price Band:
Price band indicates the different price levels within a given range in which the investor can enter his bid.
B. Floor Price:
It is the lower end of the price band.
C. Cap Price
It is the upper end of the price band.
D.Offer Document:
Offer document means prospectus in case of a public issue, which is filed with Registrar of companies (ROC) and stock exchanges. The offer document contains all relevant details pertaining to the issue upon which the investors can make his/her decision. Draft Offer Document: means the offer document in the draft stage, which is filed with SEBI for its observations. The draft offer documents are filed with SEBI atleast 21 days prior to filing the offer document with ROC and Exchange.
E. SEBI’s Role:
Any company making a public issue or a listed company making a rights issue of value more then Rs.50 Lakhs is required to file a draft offer document with SEBI for its observations. The company can proceed further only after receiving observations from SEBI. The validity of SEBI observation is 3 months only i.e the company has to open its issue within 3 months period.
F. Cut off Price
In case of public issues the actual discovered price/ issue price can be anything between a given price band. The discovered issue price is called the cut off price.
G. Basis of Allotment:
The allotment in case of QIB category is on a discretionary basis while in case of Retail and Non-QIB (HNI) category the allotment is on a proportionate basis.

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Thu, 27 Feb 2020 16:43:17 +0530


Nifty formed a Bearish candle on the daily charts. It slipped below its 200-DMA placed at 11,684 on daily charts.
Wed, 26 Feb 2020 16:20:27 +0530


Market is likely to remain volatile ahead of February FO expiry as well as December quarter GDP data, experts said.
Tue, 25 Feb 2020 16:27:05 +0530


SP BSE Sensex closed 806 points lower at 40,363 while the Nifty50 ended with losses of 251 points to close at 11,829 on Monday.
Mon, 24 Feb 2020 16:50:38 +0530


The BSE Midcap and Smallcap has outperformed the benchmark indices with a gain of 0.40 percent and 0.51 percent, respectively.
Fri, 21 Feb 2020 07:20:13 +0530


Momentum on the upside shall pick up on a strong close above 12150 levels, suggest experts.
Thu, 20 Feb 2020 16:25:24 +0530


Traders can make use of dip to create fresh longs with a stop below 12030 levels on a closing basis and look for an initial target of 12178.
Wed, 19 Feb 2020 16:52:19 +0530


Nifty formed a bearish candle which looked like a ‘Hammer’ kind of pattern.
Tue, 18 Feb 2020 16:28:55 +0530


After witnessing a positive opening, the market benchmarks slipped in the negative soon and traded in the red for the most part of the session, eventually settling with losses.
Mon, 17 Feb 2020 16:35:39 +0530


FPIs sold shares worth Rs 704.92 crore, while DIIs bought shares of worth Rs 219.54 crore in the Indian equity market on February 14, provisional data available on the NSE showed.
Mon, 17 Feb 2020 07:39:31 +0530


The apex court#39;s stance weighed on financial stocks also because of their exposure to the sector.
Fri, 14 Feb 2020 17:03:13 +0530


Intraday traders can consider long position if Nifty sustains above 12232 levels.
Thu, 13 Feb 2020 16:38:09 +0530


If the index closes below 12,144 then a fresh leg of downswing shall unfold with initial targets of 11,990.
Wed, 12 Feb 2020 16:32:04 +0530


Traders are advised to wait for at least a strong close above 12138 levels before initiating fresh longs.
Tue, 11 Feb 2020 16:26:13 +0530


Positional traders are advised to create fresh shorts on a breach of 11950 levels on a closing basis and look for a target of 11770.
Mon, 10 Feb 2020 16:39:28 +0530


Geojit has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:13 +0530


Ajcon Global has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:11 +0530


Arihant Capital has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:05 +0530


Hem Securities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:03 +0530


LKP Research has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:53:01 +0530


SPA Securities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:52:59 +0530


Mehta Equities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:52:57 +0530


Angel Broking has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 27, 2020
Thu, 27 Feb 2020 16:52:55 +0530


YES Securities has come out with its report on SBI Cards. The research firm has recommended to "Subscribe#39;#39; the IPO in its research report as on February 26, 2020
Wed, 26 Feb 2020 11:19:07 +0530


The issue will close on March 6. Company proposed to utilise the net fresh issue proceeds towards reduction of the aggregate outstanding borrowings.
Mon, 24 Feb 2020 12:33:40 +0530


The company plans to issue new shares worth Rs 5 billion and will offer up to 130.5 million shares for sale, the prospectus, dated February 18, showed.
Thu, 20 Feb 2020 11:45:03 +0530


A report noted that SBI is likely to raise Rs 2,780-2,880 crore with this IPO.
Tue, 18 Feb 2020 17:57:19 +0530


The offer for sale includes up to 3,72,93,371 equity shares by SBI and up to 9,32,33,427 equity shares by CA Rover Holdings.
Tue, 11 Feb 2020 16:26:03 +0530


The Rs 1,400-crore public issue was subscribed 62 percent despite extending the subscription period twice since its opening, and reducing the price band to Rs 71-77, down from Rs 72-77 earlier.
Wed, 05 Feb 2020 18:12:49 +0530


After the issue, government shareholding in the company will reduce to 74.96 percent from 90 percent.
Mon, 03 Feb 2020 19:46:22 +0530


SEBI#39;s latest move now allows investors to come to exchanges directly, just as they could go to the MFU entirely on their own.
Wed, 26 Feb 2020 22:02:13 +0530


Thanks to popularity of SIPs, individual investors now hold a higher share of MF assets at around 53 percent of total AUM as of December-end
Tue, 11 Feb 2020 18:32:22 +0530


NULL
Wed, 22 Jan 2020 09:31:05 +0530


However, the pace of growth in folio numbers dropped in 2019 as compared to preceding three years. Industry experts attributed the trend to decline in investors account in debt oriented schemes as they were spooked by credit events in fixed income market.
Tue, 21 Jan 2020 15:14:07 +0530

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