What is an IPO? An IPO is an abbreviation for Initial Public Offer. When a company goes public for the first time or issues a fresh stock of shares, it offers it to the public directly. This happens in the primary market. The primary market is where a company makes its first contact with the [...]
Dematerialisation
What is Demat? Demat is a commonly used abbreviation of Dematerialisation, which is a process whereby securities like shares, debentures are converted from the “material” (paper documents) into electronic data and stored in the computers of an electronic Depository. You surrender material securities registered in your name to a Depository Participant (DP). These are then [...]
Market Operations
What is ALBM? How does it work? ALBM is an acronym for automated lending/borrowing mechanism. It is a stock-lending product introduced by NSCCL (National Securities Clearing Corporation Limited) with the primary objective of providing a window for trading members of NSE to borrow securities/funds to meet their pay-in obligations. ALBM sessions are held every Wednesday [...]
Clearing and Settlement
What is a settlement cycle? Settlement cycle is the accounting period for the securities traded on the Exchange. On the NSE the cycle begins on Wednesday and ends on the following Tuesday, while on the BSE the cycle commences on Monday and ends on Friday. At the end of this period, the obligations of each [...]
Corporate Benefits / Action
What is a book-closure/record date? Book closure refers to the closing of register of the names or investors in the records of a company. Companies announce book closure dates from time to time. The benefits of dividends, bonus issues, rights issue accruing to investors whose name appears on the company’s records as on a given [...]
Equities
What is equity? Funds brought into a business by its shareholders is called equity. It is a measure of a stake of a person or group of persons starting a business. What does investing in equity mean? When you buy a company’s equity, you are in effect financing it, and being compensated with a stake [...]
Basics of Market
What is a Stock Exchange? A common platform where buyers and sellers come together to transact in stocks and shares. It may be a physical entity where brokers trade on a physical trading floor via an “open outcry” system or a virtual environment. What is electronic trading? Electronic trading eliminates the need for physical trading [...]