Indian securities market has wide choice of product. You can choose depending upon risk and needs. However, products available can be categorized as Debt and Equity. You can also see different products available in different market.
Equity Market in which shares are issued. And this equity is traded through exchanges or OTC. It also known as equity market. It is one of most important areas of market. Because, it provide companies with access to capital. Hence, based on company performance you can gain returns.
Equity market is first type of market where stocks are trade. Moreover, you can book your order with bid price. And your order will execute through broker. But it will negotiated by sellers asked price at market. You can check feature of Equity shares
In most cases deal is closed. However, stocks are brought at best price. You have pay entire stocks amount. Because, that will multiply stocks number with current price. Once you pay entire amount along with brokerage and taxes. Therefore, stocks are deposited in your DP account.
Products of Equity Markets
Equity Segment of stock exchange allows trading in shares. Probably, equity markets have five products. Such as equity shares, debentures, warrants, MF and exchange traded funds. You can view types of equity shares.
Equity shares makes you part owner of business. However, shares come in various flavors. It provide with different rights on stock holder. You must know how company running in market. Hence, you need to understand various types of shares. It will help you to reach your financial goals.
Equity shares are ordinary shares in company business. In addition they are also called as ordinary shares. You will not enjoy regarding payment of dividend. And also repayment of capital. You will receive dividend out of profits made by company. Check what is equity share capital.
However, if profits are high you will get dividend high. If profits are low you will get dividend low. Therefore maximum risk connected with business venture. Equity shares are one of main sources for any company. Hence, shares holders are member of company and have voting rights.
Debenture is one of capital market instruments. You can used to raise long term funds from public. Therefore, it basically debt instrument. You can grant loan to company. And it effect under seal of company.
Probably, debenture document called debenture deed. Mostly, in India debentures are safe by real asset. Therefore, these loans are normally repayable on fixed date. And rate of interest are also fixed. It contains provisions for interest and repayment of principal amount.
However, there are fully convertible, Non or partly convertible debentures. Fully convertible will be converted into ordinary shares of same company. Under specified terms and conditions. Non convertible are pure debt without feature of conversion. And these NCDs are repayable on maturity.
Partly convertible debentures will be partly converted. And it partly converted into ordinary shares of same company. Under specified terms and conditions. Thus, it has both features of debenture and equity. Therefore, partly convertible have features of convertible. Such as convertible and non convertible debentures. Hence, debentures can be pure debt or quasi equity.
You can buy equity shares after specified time at given price. However, to gain this right of such warrants. You need to make an upfront payment to warrants issuer. On such warrants fresh shares are issued by company.
Therefore, these warrants are also issued by special. But this warrant allot to promoters, institutional and other investor. So it increases their performance of business. Hence, stock gives high growth path. Probably warrant is like an option. Check on how do stocks warrants work.
Mutual funds are trust that pools investor savings amount. Finally it invests in capital market. Such as stocks, bonds, and other securities. And also professionally managed investment fund. It is kind of investment vehicle. Because, every single investors can invest in market. It is simple way to expand an investment.
You can save or make money how you want. It is pool of money collect from many investors to invest money in stock. Similarly mutual fund is growth industry. And these investments depend on objectives of fund. You can start early & systematically. You can invest directly or through Money Manager.
Exchange traded fund
Exchange traded fund was well developed in equity market. To create diversified portfolio based on equity indexes. Because equities are center of asset for investment portfolio. You can buy shares in an ETF directly from any brokerage account. Search on Best ETF to invest.
You have to understand different choices available to trade ETFs. Therefore, you can invest in all securities included in index. You must notice that ETF offer one stop exposure. So that you can diversified basket of securities in time.
Exchange traded funds (ETFs) offer flexibility of stock. And it gives protection to fund. In addition, all financial planners are recommend ETFs. To have long term goals and want to invest in equity. You can invest in equity without taking too much risk.
Finally, you can compare ETFs with mutual fund. It’s like comparing stock with mutual fund. Because, its mirror index property. You can see complete transparency on holdings of ETF. Due to unique structure and creation ETF have much lower expense. If you compared to mutual fund.