Every day we saw TV NEWS.In that After Political News the news reader said the business news.
In that the persons said some shares are raising or some shares are falling and also sensex or nifty is raising or falling.
Here we know what is shares?what is sensex? and what is nifty?
First we learn about the shares first.
A Share is Part of ownership in a company.The person who owns the shares is called share holder.
Shares a brief description:
Suppose a person starts a garment shop with his own investment or loan taken from friends,Relatives, well wishers or bank.
After that the shop runs successfully he thought that he want to expand one more shop.At that time he Invited the partners for investment or take loan from bank.
some point of time he want to expand the busines,or modernise the business or diversifing into some other business he need so much of investment.At that time banks or financial institutions have certain limit for giving the loan.
In this point shares are coming into the picture.This time the person goes for public issue.This is called intial public offer(IPO).In this the person provides his business information in offer document and submitting that offer document to SEBI(SECURITIES AND EXCHANGE BOARD OF INDIA) for approval.After getting the approval he go for the initial public offer.
After reading the offer Document the person apply for the shares.suppose the company want 1 crore investment then the company issue the shares at 10/- face value of 10,00,000 shares are issued.Now the issuing of the shares in book building process only.
After collecting the investment from the share market through IPO,the company allots the share on prorata basis.In this based on the guidelines of the sebi and stock market the company allots the shares through percentage wise like banks and financial institutions this percentage,general people this percentage.Based on that percentages the company allots the shares.
Listing:
The shares are listing in the stock exchanges like BSE(bombay stock exchange) and Nse(National Stock exchange).After listing the persons who own the shares are selling or buying the shares through these stock exchanges is their choice.
Types of Shares:
There are two types of shares.They are
1.Equity Shares
2.Preferance Shares
Equity shares:
In this equity holders get ownership in the company.they are the real owners of the company.
they attend the AGM AND EGM of the company.they are participating the voting also.
They get Dividends when company earns profits and anounces the dividends.The dividend is not fixed it may vary year to year.
Preference share holders:
they are not the real owners of the company.In this the preference share holder get the dividend the company earns profit or not.the dividend is fixed.these holders not have the voting rights.Now a days most of the companies are not issueing preference shares.
Benefits of investing in shares:
suppose we invest in a good company we get the benefits like
1.investment appreciation
2.price rise in share
3.get dividends
4.get bonus shares
5.provide capital to the company they are improve their business that our economy also improve.
The information is quite helpful and the beginners should be aware with the basic of market and what is a share because if they don't know in what they are investing then how will they earn profit. stock tips
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