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The National Stock Exchange of India Limited (NSE) is a Mumbai-based stock exchange.

National Stock Exchange

The main objective of NSE is to provide a nation wide transparent market for equity, debt and other variation of securities.

It’s the largest stock exchange in India.

NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial intermediaries but its ownership and management operate as separate entities.

National Stock Exchange

Vibrant features of NSE are:-

2) Securities traded – The NSE has two segments for trading in securities

a) Capital market segment – equity, debentures and hybrids,

b) Money market segment – T-bills, Cps, CDs, PSU bonds etc.

2) Payment and delivery on the NSE are completed within 15 days of the transactions.

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Mexico Stock Exchange

A stock exchange, share market or bourse is a corporation or mutual organization which provides facilities for stock brokers and traders, to trade company stocks and other securities.

The Securities Contract (Regulation) Act, 1956 defines a stock exchange as an association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling of business in buying, selling and dealing in securities.

Every stock exchange has a specific location.

Stock Exchange

Only members who have applied and obtained membership are authorized to trade there.

Brokers serve as intermediaries between the buyers and sellers.
Securities that are traded on the stock exchange are known as listed securities.

Stock exchanges have multiple roles in the economy, this may include the following :-

• Raising capital for businesses

• Mobilizing savings for investment

• Facilitating company growth

• Redistribution of wealth

• Corporate governance

• Creating investment opportunities for small investors

• Government capital-raising for development projects

• Barometer of the economy

Wall Street Stock Exchange

Twenty Major Stock Exchanges in the World are as follows:-

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This is the practice followed by a company to make preferential allotment of securities to selected persons, who are normally the promoters, etc.

At a price unrelated to the prevailing market price.

The advantage is that funds are obtained at a minimal cost as compared to the public issue or the private placements methods.

But preferential allotments have been sometimes misused by companies.

Currency

Each shareholder has the right to subscribe to the new shares in the portion of shares he already holds.
The shareholder may either accept the offer for himself or assign a part or all of his rights to another.

Such rights are valuable to shareholders as they are at price below the current market price.
The right issue is an inexpensive and convenient way of raising additional capital as compared to the amount already issued.

A rights issue to the existing shareholders is a mandatory requirement.

The issue of additional shares to other parties without giving the existing shareholders the opportunity to subscribe would reduce the existing shareholders’ proportion of the total capital; i.e.it would ‘water’ their equity.

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Initial Public Offering

Initial public offering, also referred to simply as a "public offering," is the first sale of stock by a private company to the public.

IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.

In an IPO, the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market.

IPOs

IPOs can be a risky investment.

For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company.

The IPO can be made by 3 methods which are:-

a) Public Issue through Prospectus – raising the capital by issuing a prospectus to inform and attract the investing public.

b) Offer for Sale – offering the new securities to the investing public by the intermediary like underwriters, merchant banking etc.

c) Private Placement – selling of new securities by an intermediary to selected clients at higher price.

When a company lists its shares on a public exchange, it will almost invariably look to issue additional new shares in order to raise extra capital at the same time.
The money paid by investors for the newly-issued shares goes directly to the company (in contrast to a later trade of shares on the exchange, where the money passes between investors).

IPOs

An IPO, therefore, allows a company to tap a wide pool of stock market investors to provide it with large volumes of capital for future growth.
The company is never required to repay the capital, but instead the new shareholders have a right to future profits distributed by the company.

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Dividends are payments made by a company to its shareholders.

Dividends

When a company earns a profit, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders of the company as a dividend.

Paying dividends is not an expense; rather, it is the division of an asset among shareholders.

Dividends Policy

There are various forms in which the dividends can be paid, some of which are :-

• Cash

Cash dividends (most common) are those paid out in form of cheques. This is the most common method of sharing corporate profits with the shareholders of the company.

• Stock

Stock dividends are those paid out in form of additional stock shares of the issuing corporation, or other corporation. They are usually issued in proportion to shares owned.

• Property

Property dividends or dividends in ‘in kind’ are those paid out in form of assets from the issuing corporation or another corporation. They are relatively rare and most frequently are securities of other companies owned by the issuer.

• Other

Dividends can be used in structured finance. Financial assets with a known market value can be distributed as dividends.

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Bond is a debt security, similar to a debenture.
When we purchase a bond, we are lending money to a government, municipality, corporation or other entity known as the issuer.

In return for the loan, the issuer promises to pays a specified rate of interest during the life of the bond and to repay the face value of the bond (the principal) when it “matures,” or comes due.

Bond, like debenture, is an acknowledgement of debt issued under the seal of a company and signed by an authorized signatory.

The expression ‘Bond’ has become synonymous with the debt instruments where the rate of interest is not pre-determined. Examples of bonds are Deep Discount Bond, Zero Coupon Bond etc.

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Shares represent ownership of a company. When an individual buys shares of a company, they become one of the owners of the company.

Shareholders choose who runs a company and are involved in making decisions, such as whether a business should be sold.

Shares

There are two types of shares which are normally issued:-

a. Equity shares and,

b. Preference shares

Equity shares are the most important source of raising long term capital by a company.

Equity shares represent the ownership of a company and capital raised by it is known as owner’s fund.

Equity shareholders do not get a fixed dividend but are paid on the basis of earnings by the company.

The preference shareholders enjoy a preferential position over equity shareholders.

As compared to the equity shareholders, the preferential shareholders have a preferential claim over dividend and repayment of capital.

Sensex

Preference shares are broadly classified as:-

a) Cumulative Preference Shares

b) Non-cumulative Preference shares

c) Participating Preference Shares

d) Non-participating Preference Shares

e) Convertible Preference Shares

f) Non-convertible Preference Shares

g) Redeemable Preference Shares

h) Irredeemable Preference Shares

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