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Brief view on share

market

Types of market
Primary market
IPO(Initial Public Offer)
Secondary market
Spot
Futures
Options
Call option
Put option

Market intermediacies
Registered Mutual Funds
Recognised Investors Associations
List of Registered Research Analysts
Resource Persons empanelled by SEBI for Financial Education
KYC (Know Your Client) Registration Agency registered with SEBI
List of Registered Alternative Investment Funds
Self Certified Syndicate Banks
Registered Investment Advisors
Credit Rating Agencies
Venture Capital Funds
Foreign Venture Capital Investors
Sub-Brokers in equity segment
Stock Brokers in equity segment
Stock Brokers in Equity Derivative Segment
Stock Brokers in Currency Derivative Segment
Collective Investment Management Company

Registration
Initial Public Offering (IPO)

Initial Public Offer (IPO) is a process through which an


unlisted Company can be listed on the stock exchange by
offering its securities to the public in the primary market.
The object of an IPO may be relating to expansion of
existing activities of the Company or setting up of new
projects or any other object as may be specified by the
Company in its offer document or just to get its existing
equity shares listed by diluting the stake of existing equity
shareholders through offer for sale.

Registration
New Listing
New Listing is a process through which a
company which is already listed on other
stock exchange/s approaches the Exchange
for listing of its equity shares. The companies
fulfilling the eligibility criteria prescribed by
the Exchange; from time to time; are listed on
the Exchange.

Registration
IPO

Eligibility Criteria
Paid up Capital
Conditions Precedent to Listing
Atleast three years track record of either
No disciplinary action by other stock
exchanges and regulatory authorities in past
three years

Redressal Mechanism of Investor grievance


Distribution of shareholding
Details of Litigation
Track Record of Director(s) of the Company

Testing and certification


files
Financial Markets: A Beginner's Module
Mutual Funds: A Beginner's Module
Currency Derivatives: A Beginner's Module
Equity Derivatives: A Beginner's Module
Interest Rate Derivatives: A Beginner's Module
Commercial Banking in India : A Beginner's Module
FIMMDA-NSE Debt Market (Basic) Module
Securities Market (Basic) Module
Clearing Settlement and Risk Management Module
Banking Fundamentals - International
Capital Markets Fundamentals - International

Foreign Institutional Investor


Foreign Institutional Investor (FII) means an institution

established or incorporated outside India which proposes


to make investment in securities in India. They are
registered as FIIs in accordance with Section 2 (f) of the
SEBI (FII) Regulations 1995. FIIs are allowed to
subscribe to new securities or trade in already issued
securities.

Foreign Institutional Investor


International standards

The acquisition of at least ten percent of the ordinary


shares or voting power in a public or private enterprise by
non-resident investors makes it eligible to be categorized
as foreign direct investment (FDI).

Myths
FIIs do not invest in unlisted entities. They participate

only through stock exchanges .


FIIs cannot invest at the time of initial allotment. Foreign
investors investing in initial allotment of shares (say IPOs
or when a group of entities come together to float a
company) are categorized as FDIs

Registered FIIs
Pension Funds
Mutual Funds
Investment Trusts
Banks
Insurance Companies / Reinsurance Company
Foreign Central Banks
Foreign Governmental Agencies
Sovereign Wealth Funds
International/ Multilateral organization/ agency
University Funds (Serving public interests)
Endowments (Serving public interests)
Foundations (Serving public interests)
Charitable Trusts / Charitable Societies (Serving public interests)

Activities by FIIS
Purchase and sale in secondary market
Purchase and sale of mutual fund units in secondary

market
Purchase in primary market Preferential allotment
Purchase through rights issue
Conversion of debentures into equity shares
Receipt of bonus shares Redemption of debenture /units
of mutual funds
Lodging shares in terms of open offer Repurchase of units
by mutual fund
Buyback of shares by company
Payment of allotment/call money

Qualified Institutional Buyer (QIB)


A qualified institutional buyer (QIB or QUIB) is a

company that manages at least $100 million of securities


on a discretionary basis or is a registered broker-dealer
investing at least $10 million in non-affiliate securities.
A QIB can be an insurance company, a bank, a 401(k)
plan, an employee benefit plan, a trust fund, a business
development company (BDC), a charity, or even an entity
owned by qualified investors. QIBs are regarded as highly
sophisticated entities that do not need as much protection
as less sophisticated investors or entities

A non-resident Indian
(NRI)
He is a citizen of India who holds an Indian

passport and has temporarily emigrated to


another country for six months or more for
employment, residence, education or any
other purpose.

Bonus share
A bonus share is a free share of stock given to

current shareholders in a company, based


upon the number of shares that the
shareholder already owns. While the issue of
bonus shares increases the total number of
shares issued and owned, it does not change
the value of the company. Although the total
number of issued shares increases, the ratio
of number of shares held by each shareholder
remains constant.

MERGER AND ACQUISITIONS


A merger is a transaction that result in the transfer of

ownership and control of a corporation.


When one company purchases another company of an

approximately similar size. The two companies come


together to become one.
Two companies usually agree to merge when they feel that

they can do something together that they can not do one


their own.

Examples
Rajasthan bank and ICICI bank
Arcel or Mittal
Renault and Nissan

Horizontal merger
A merger occurring between companies producing similar

products, goods and offerings similar services.


This type of merger occurs frequently as a result of larger

companies attempting to create more effective economies


of scale.

Vertical Merger
A merger between two companies producing

different goods and services for one specific


finished products.
The merger of the firm that have actual or

potential buyer-seller relationship.


Example- Car manufacture purchasing a tire
company.

Demerger
A business strategy in which a single business is broken into components,

either to operate on their own, to be sold or to be dissolved. A de-merger


allows a large company, such as a conglomerate, to split off its various
brands to invite or prevent an acquisition, to raise capital by selling off
components that are no longer part of the business's core product line, or
to create separate legal entities to handle different operations.
Example
Wipro will hive off three units - Wipro Consumer Care & Lighting, Wipro
Infrastructure Engineering and Medical Diagnostic Product & Services
business - into a separate unlisted company called Wipro Enterprises.
Together, the three units contributed 14 per cent to Wipro's revenue.

Face value of share


All companies issue shares with a fixed denomination

called the face value (or par value) of the share. This face
value be indicated on the share certificate. Generally
Indian shares has a face value of Rs. 10/A Face value or par value of the company share always
remains the same, irrespective of the market price of that
share. Companies have to right to split the face value of
the share to Rs. 5, 2 or 1 to bring more volatility to the
share.

Market value of share


Market value is also commonly used to refer to the market

capitalization of a publicly-traded company, and is obtained by


multiplying the number of its outstanding shares by the current
share price. Market value is easiest to determine for exchangetraded instruments such as stocks and futures, since their
market prices are widely disseminated and easily available, but
is a little more challenging to ascertain for over-the-counter
instruments like fixed income securities. However, the greatest
difficulty in determining market value lies in estimating the
value of illiquid assets like real estate and businesses, which
may necessitate the use of real estate appraisers and business
valuation
experts
respectively.

Market Lot
In the financial markets, a lot represents the standardized

quantity of a financial instrument as set out by an


exchange or similar regulatory body. For exchange-traded
securities, a lot may represent the minimum quantity of
that
security
that
may
be
traded.

Capital reduction
The process of decreasing a company's shareholder equity

through share cancellations and share repurchases. The


reduction of capital is done by companies for numerous
reasons including increasing shareholder value and
producing a more efficient capital structure.

DEMAT
In India, shares and securities are held electronically in a

dematerialized (or "Demat") account, instead of the


investor taking physical possession of certificates. A
Dematerialized account is opened by the investor while
registering with an investment broker (or sub-broker). The
Dematerialized account number is quoted for all
transactions to enable electronic settlements of trades to
take place. Every shareholder will have a Dematerialized
account for the purpose of transacting shares.

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