Most companies that go public have been around for at least a little while. Going public gives the company an opportunity for a potentially huge capital infusion, since millions of investors can now easily purchase shares. It also exposes the corporation to stricter regulatory control by government regulators. When a corporation decides to go public, after filing the necessary paperwork with the government and with the exchange it has chosen, it makes an initial public offering (IPO). The company will decide how many shares to issue on the public market and the price it wants to sell them for. When all the shares in the IPO are sold, the company can use the proceeds to invest in the business.
Stocks are a unique kind of investment because they allow you to take partial ownership in a company. Because of this, the returns are potentially bigger and they have a history of being a wise way to invest your Money. A company's stock price reflects what investors think about the stock, not necessarily what the company is 'worth'. For example, companies that are growing quickly often trade at a higher price than the company might currently be 'worth'. Stock prices are also affected by all forms of company and market news. Publicly traded companies are required to report quarterly on their financial status and earnings. Market forces and general investor opinions can also affect share price.
Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer no guarantee of any returns and can lose value, even in the long run Investments in stocks can generate returns through dividends, even if the price . How does one trade in shares? Every transaction in the stock exchange is carried out through licensed members called brokers. To trade in shares, you have to approach a broker or a sub-broker.
Demat refers to a dematerialized account. Nowadays, you need to open a demat account if you want to buy or sell stocks.
To open a demat account, you need to get in touch with a registered depository participant (DP)/Brokers. It is just like opening a Bank account. It usually takes a week or two to open your account. It is important to add nominee while applying for demat account. Mostly it is Free now a day. Other types of fee charged are annual maintenance fee, custodian fee and transaction fee.
A depository is an organization which holds securities like shares, debentures, bonds, government securities, mutual fund units etc. of investors in an electronic form. The securities are held at the request of the investors through a registered Depository Participant. The depository also provides services related to transactions in securities.
Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in an electronic form and are credited into the beneficiary's account with his DP.
Yes, you can open more than one account at the same name either with same or different Depository Participants (DP). An investor has to fill the KYC form every time he opens a new account. The KYC norms include Proof of Identity, Proof of Address requirements as stipulated by SEBI and PAN number. The investor has to show the original PAN card at the time of opening of demat account.
The process to convert shares back to the physical holding is called as rematerialisation. He needs to fill remat request form (RRF) and request his DP to rematerialize the shares in his account.
No, an investor cannot operate a joint account on 'either or survivor' basis like a normal bank account. But if the beneficial owner authorizes any person to operate his account by executing a power of attorney and submitting it to the DP, that person can operate the account on behalf of the beneficial owner.
No, there is no such rule to keep any minimum balance in demat account
Depository registered with SEBI are called as registered depository and currently there are two registered depositories - National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL).
There are various benefits of dematerializing securities such as a) It is a convenient and safe to hold securities in demat form b) Smooth and immediate transfer of securities c) You don't need to pay any stamp duty on transfer of securities d) Minimizes your paper work e) Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc. f) There is no odd lot problem (you can even trade single share) g) Reduction in transaction cost
KYC (Know Your Customer) is a customer identification process, which is done to prevent any criminal activity. SEBI has made it mandatory to fulfill the KYC norms in order to open a demat account. These norms include a) Proof of identity: PAN card with photograph, voter id card, passport, Aadhar card b) Proof of address: This includes your ration card/ passport/bank account statement, driving license, utility bills like electricity bill, telephone bill. (PAN card is compulsory) c) You need to give your bank account number to open a DP account.