1. Equity
Basics
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2. Ways of raising capital
 Equity
– Owned Funds
– Owner receives profit in the form of dividend
 Debt
– Borrowed Funds
– Borrower pays interest
– Secured or unsecured
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3. Debt Equity Ratio
Debt Equity Ratio = Debt
Equity
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4. Preference Capital
Preferential shareholders enjoy a
preferential right
over equity shareholders with regards to:
 Receipt of dividend
 Receipt of residual funds after liquidation
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5. Debentures
 A ‘Debenture’ is a legal contract
where the company will pay the
lender the initial amount
(principal) and interest (rate of
interest predefined at the
beginning) after a pre defined
period of time (maturity date)
 Types of Debentures
– Convertible
– Non Convertible
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6. Venture capital
 Capital typically provided by investors
for financing of new, growing or
struggling businesses. High risk
investments. Potential for above
average returns
 Pooled investment vehicle
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7. Limited company
 Liability limited to capital invested
 Protects personal assets of shareholders
 Types of limited companies
– Private limited
– Public limited
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8. Segments of the capital market
 Primary market
 Secondary market
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9. Primary market
 Primary market provides opportunity to
issuers of securities; Government as well
as corporate, to raise resources to meet
their requirements of investment
 They may issue the securities at face
value, or at a discount/premium and
these securities may take a variety of
forms such as equity, debt or hybrid
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10. Secondary market
 Secondary market refers to a
market where securities are
traded after being initially
offered to the public in the
primary market and/or listed on
the Stock Exchange
 Provides liquidity to investors
 Majority of the trading is done in
the secondary market
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11. Initial Public Offering (IPO)
 Initial Public Offering (IPO) is when an
unlisted company makes either a fresh
issue of securities or an offer for sale of
its existing securities or both for the first
time to the public
 This paves way for listing and trading of
the issuer’s securities
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12. Pricing of an issue
 Fixed Price
 Price discovery through Book Building Process
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13. Book building process
 Book building is basically a process used in
IPOs for efficient price discovery
 Floor price and Cap price
 It is a mechanism where, during the period
for which the IPO is open, bids are collected
from investors at various prices, within the
price band
 The offer price is determined after the bid
closing date
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14. Index
 Number which measures the change in a set of values
over a period of time
 Stock index represents the change in value of a set of
stocks which constitute the index
 A good stock market index is one which captures the
behavior of the overall equity market
 It has to be well diversified yet highly liquid
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15. Importance of a market index
A market index is very important for its use as
 a barometer for market behavior
 as a benchmark portfolio performance
 an underlying for index futures and options
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16. Circuit breakers
 An index based market-wide circuit breaker system
applies at three stages of the index movement either way
at 10%, 15% and 20%
 The breakers are triggered by movement of either S&P
CNX Nifty or Sensex, whichever is breached earlier
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17. Circuit breakers
As an additional measure of safety, individual scrip-wise price bands has
been fixed as below:
 Daily price bands of 2% (either way) on a set of specified securities
 Daily price bands of 5% (either way) on a set of specified securities
 Daily price bands of 10% (either way) on another set of specified securities
 Price bands of 20% (either way) on all remaining securities (including
debentures, warrants, preference shares etc. which are traded on CM
segment of NSE)
 No price bands are applicable on scrips on which derivative products are
available or on scrips included in indices
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18. Market timings
 Trading on the equities segment takes place on all days of
the week (except Saturdays and Sundays and holidays
declared by the exchange in advance)
 The market timings of the equities segment are:
– Normal market open : 09:00 hours
– Normal market close : 15:30 hours
– The closing session is held between 15.50 hours and 16.00 hours in NSE and 15.40
hours and 16.00 hours in BSE
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19. Order management
 Entering Order
 Order Modification
 Order Cancellation
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20. Entering order
 Active Order
 Passive Order
 Order Book
 Symbol
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21. Types of order conditions
 Time Conditions
 Price Conditions
 Quantity Conditions
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22. Time conditions
 DAY
 IOC - An Immediate or Cancel
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23. Price conditions
 Limit Price/Order
 Market Price/Order
 Stop Loss (SL) Price/Order
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24. Quantity conditions
 Disclosed Quantity (DQ)
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25. Clearing and settlement
 Stock Markets follow a system of settling trades on T+2
basis, which means transactions done on Monday, are to
be settled by Wednesday by way of giving securities or
funds.
 Providing of securities or funds to Exchange / Clearing
Corporation is called ‘Pay-In’.
 Receiving securities or funds from Exchange / Clearing
corporation is called ‘Pay-Out’.
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26. Clearing and settlement
 Sometimes trades don’t get settled because of short or bad
delivery or company objection
 In such cases ,trade is settled through auction of securities
 If a trade remains unsettled even after auction, then
Exchange carries ‘Close Out’
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27. Our brokerage rates
Broking Services
Brokerage (Cash)
Intra-day 0.05%
Delivery:(Normal) settlement 0.50%
Trade to Trade and Z group scrip 0.75%
Brokerage(Futures) 0.05%
Brokerage(Options) 1% of Premium
Minimum Rs. 100/- per lot
Minimum per share brokerage Rs.0.05
Minimum Initial Margin Rs.10,000
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28. Regulatory charges
 Trading Cash (NSE & BSE) : 0.0037% on turnover
 Delivery (NSE & BSE) : 0.0037% on turnover
 Futures : 0.0037% on turnover
 Options : 0.0568% on premium
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29. Stamp Duty
 Trading Cash (NSE & BSE) : 0.002% on
turnover
 Delivery (NSE & BSE) : 0.01% on turnover
 Futures : 0.002% on turnover
 Options : 0.002% on premium
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30. Service Tax and STT
 Service Tax is 10.30% on brokerage
 Securities Transaction Tax
– For trading transactions in cash– 0.025% (Charged to seller only)
– For delivery transactions – 0.125% (Charged to buyer and seller)
– For trading transactions in ‘F n O’
 Intra day – 0.017 % (Charged to seller)
 For exercise – 0.125 % (Charged to seller)
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31. Trader Terminal
 Investors get the facility to buy and sell
stocks in NSE and BSE and Futures and
Options through NSE
 Trader Terminal is for the dedicated day
traders, who churn their portfolio on
minor movements in the market,
sometimes several times a day
 The Trader Terminal offers…..
– lightning fast order execution
– Monitoring of marked to market positions on a minute-
to-minute basis
– Intra-day charts, market gossip, price and volume
information and much more
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32. Thank You
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