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Faq

  • What are Cumulative Preference Shares?

    Cumulative Preference Shares are a type of preference shares on which dividend accumulates if remains unpaid. All arrears of preference dividend have to be paid out before paying dividend on equity shares.

  • How do I place my orders with the broker or sub broker?

    You can either go to the broker’s / sub broker’s office or place an order over the phone / internet or as defined in the Model Agreement given above.

  • Is it possible to enter bids less than floor price?

    No. The system automatically rejects the bids if price is less than floor price.

  • What is minimum number of days for which bid should remain open in book building?

    Book should remain open for minimum of 3 working days.

  • What is dividend yield?

    Dividend yield is dividend to price ratio. It is the percentage calculated by dividing dividend per share by price per share. Dividend yield is used to calculate the earning on investment (shares) considering only the returns in the form of total dividends declared by the company during the year.

    Dividend Yield = Interim + Final Dividend X 100

    Market Price of the share

    E.g.: For a company for FY10,

    Interim dividend = Rs. 2 per share

    Final dividend = Rs. 3 per share

    Share price = Rs. 50

    Dividend yield = 2 + 3

    50

    Dividend yield =10%

    Source: sptulsian.com

  • What is Hard underwriting?

    Hard underwriting is when an underwriter agrees to buy his commitment at its earliest stage. The underwriter guarantees a fixed amount to the issuer from the issue. Thus, in case the shares are not subscribed by investors, the issue is devolved on underwriters and they have to bring in the amount by subscribing to the shares. The underwriter bears a risk which is much higher in soft underwriting.

  • What is the difference between cash EPS and EPS?

    Cash EPS takes into account the cash flow generated by a company on a per share basis, while EPS looks at the net income generated on a per share basis, for a given period. Like EPS, higher the cash EPS, better it is considered.

    Cash EPS = Operating cash flow for the period

    Weighted average number of equity shares outstanding

    Cash EPS can be computed from EPS by adjusting for depreciation, amortization of goodwill and other non-cash items such as deferred tax and intangibles.

    Source: sptulsian.com

  • Who is a Syndicate Member?

    The Book Runner(s) may appoint those intermediaries who are registered with the Board and who are permitted to carry on activity as an ‘Underwriter’ as syndicate members. The syndicate members are mainly appointed to collect and entire the bid forms in a book built issue.

  • What documents should be obtained from broker on execution of trade?

    You have to ensure receipt of the following documents for any trade executed on the Exchange:

    a. Contract note in Form A to be given within stipulated time.

    b. In the case of electronic issuance of contract notes by the brokers, the clients shall ensure that the same is digitally signed and in case of inability to view the same, shall communicate the same to the broker, upon which the broker shall ensure that the physical contract note reaches the client within the stipulated time.

    It is the contract note that gives rise to contractual rights and obligations of parties of the trade. Hence, you should insist on contract note from stock broker.

  • Does SEBI approve the contents of the issue?

    It is to be distinctly understood that submission of offer document to SEBI should not in any way be deemed or construed that the same has been cleared or approved by SEBI. The Lead manager certifies that the disclosures made in the offer document are generally adequate and are in conformity with SEBI guidelines for disclosures and investor protection in force for the time being. This requirement is to facilitate investors to take an informed decision for making investment in the proposed issue.
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stocks glossary

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

  • Acid Test Ratio

    It is the ratio indicated by dividing a company\'s current assets by current liabilities. It reflects the financial strength of a company and hence called Acid test ratio.

  • Alpha

    Alpha measures the difference between a fund\'s actual returns and its expected performance, given its level of risk (as measured by beta). A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund\'s beta. Some investors see alpha as a measurement of the value added or subtracted by a fund\'s manager. There are limitations to alpha\'s ability to accurately depict a manager\'s added or subtracted value. In some cases, a negative alpha can result from the expenses that are present in the fund figures but are not present in the figures of the comparison index. Alpha is dependent on the accuracy of beta: If the investor accepts beta as a conclusive definition of risk, a positive alpha would be a conclusive indicator of good fund performance. Of course, the value of beta is dependent on another statistic, known as R-squared.

  • Annual Fund Operating Expenses

    The expenses incurred, during a particular year, by Asset Management Company for managing the funds.

  • Asset Allocation

    The process of diversifying the investments in different kinds of assets such as stocks, bonds, real estate, cash in order to optimize risk.

  • Asset Allocation Fund

    A fund that spreads its portfolio among a wide variety of investments, including domestic and foreign stocks and bonds, government securities, gold bullion and real estate stocks. Some of these funds keep the proportions allocated between different sectors relatively constant, while others alter the mix as market conditions change.

  • Asset Management Company (AMC)

    A Company registered with SEBI, which takes investment/divestment decisions for the mutual fund, and manages the assets of the mutual fund.

  • Automatic Investment Plan

    A plan offered by most mutual funds where a small fixed amount is automatically deducted monthly from an investor\'s bank account and invested in the mutual fund of their choice.

  • Automatic Reinvestment

    An investment option for mutual fund unit holders in which the proceeds from either the fund\'s dividends or capital gains, or both, are automatically used to buy more units of the funds.
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