What is the Price to Earnings (P/E) ratio?
The P/E ratio shows how much investors are willing to pay per ₹1 of earnings. A low P/E may indicate undervaluation.
What is Price to Book (P/B) ratio?
P/B ratio compares a company's market price to its book value. It helps assess whether a stock is undervalued.
What is PEG ratio?
PEG ratio = P/E divided by growth rate. It helps identify undervalued growth stocks. PEG under 1 is often considered good.
What is meant by market capitalization?
Market cap = stock price × total outstanding shares. It classifies companies into small-cap, mid-cap, and large-cap.
What is SME IPO?
SME IPOs are for small and medium enterprises. They are listed on NSE Emerge or BSE SME platforms with relaxed listing norms.
Who can invest in SME IPOs?
Retail investors, HNIs, and institutions can invest. Some SME IPOs are restricted to qualified investors only.
What is an Anchor Investor?
An Anchor Investor is a large institutional investor who invests before the IPO opens to build confidence and momentum.
What is a Book Building Issue?
Book building is a price discovery method where investors bid within a price band. Final price is decided after bidding ends.
What is the Grey Market Premium (GMP)?
GMP is the premium at which an IPO share is traded unofficially before listing. It shows demand but is unofficial and risky.
What is oversubscription in IPOs?
Oversubscription means demand for shares is more than the number offered. Allotment becomes proportionate or via lottery.
What is IPO lot size?
Lot size is the minimum number of shares that retail investors must apply for in an IPO.
What is meant by lock-in period in IPOs?
Promoters or anchor investors may have a lock-in period (e.g., 6 months) during which they cannot sell shares post-IPO.
What is Face Value in stocks?
Face value is the nominal value of a share (usually ₹1 or ₹10). It affects corporate actions like bonus or split.
What is stock split?
A stock split divides each share into multiple shares to increase affordability. E.g., 1:2 split makes 1 share into 2.
What is bonus issue?
Bonus shares are free shares issued from company profits. E.g., 1:1 bonus gives 1 free share for each share held.
What is dividend yield?
Dividend yield = (Dividend ÷ Stock price) × 100. It shows how much income you get for every ₹1 invested.
What is the role of SEBI?
SEBI regulates Indian stock markets, protects investor interests, and ensures transparency in trading.
What is an AIF?
Alternative Investment Fund includes private equity, venture capital, hedge funds etc. Open to high net-worth investors.
What is the difference between NFO and IPO?
NFO is New Fund Offer (mutual fund), while IPO is Initial Public Offering (stocks). NFOs don’t offer listing gains.
What is Small Finance Bank?
Small finance banks serve the underserved. They offer savings, loans, and fixed deposits like regular banks.
What is RBI Retail Direct?
RBI Retail Direct allows individuals to invest in government bonds and treasury bills online via RBI platform.
What is Bharat Bond ETF?
Bharat Bond is an exchange-traded fund that invests in PSU bonds. Offers stable returns and lower tax than FDs.
What is Sovereign Wealth Fund?
It's a government-owned investment fund funded by surplus reserves, invested in assets to support future development.
What is a rights issue?
Rights issue gives existing shareholders the right to buy additional shares at a discount before the general public.
What is promoter holding?
It refers to the percentage of company shares held by promoters. High, stable promoter holding is a positive sign.
What is a preferential allotment?
It’s an issue of shares to select investors (like promoters or institutions) at a fixed price, often at a premium.
What is open offer in stocks?
Open offer is when an acquirer offers to buy shares from existing shareholders, usually during a takeover.
What is an escrow account?
Escrow account is a third-party account used in IPOs or acquisitions to hold funds securely until the deal closes.
What is UPI mandate in IPO?
UPI mandate blocks the IPO amount in your bank account. It ensures you have sufficient funds during allotment.
What is the cut-off price in IPO?
Retail investors can select 'cut-off price' to bid at the final price decided by the book-building process.
What is IFSC code?
Indian Financial System Code (IFSC) uniquely identifies bank branches used for NEFT/IMPS/RTGS transactions.
What is NEFT?
National Electronic Funds Transfer (NEFT) is a one-to-one fund transfer system available 24x7 in India.
What is RTGS?
Real Time Gross Settlement is used for large-value transfers (min ₹2 lakh) in real time between banks.
What is IMPS?
Immediate Payment Service allows instant transfer of funds 24/7 using mobile number, account number, or UPI.
What is UPI?
Unified Payments Interface allows fast, instant money transfers between bank accounts using a mobile app.
What is the role of NSDL and CDSL?
They are India’s two depositories that hold your stocks in demat form and help in clearing & settlement.
What is investor grievance redressal?
SEBI and exchanges provide platforms like SCORES to resolve complaints related to brokers, IPOs, or listed companies.
What is net asset value (NAV)?
NAV is the per-unit price of a mutual fund. It is calculated by dividing total assets minus liabilities by total units.
What is AMC in mutual funds?
Asset Management Company manages the pooled money in mutual funds and makes investment decisions.
What is an expense ratio?
It is the annual fee charged by a mutual fund expressed as a percentage of AUM. Lower ratios are better for returns.
What is exit load in mutual funds?
Exit load is a fee charged when you redeem mutual fund units before a certain period. It discourages premature exits.
What is CAGR vs Absolute Return?
Absolute return shows total growth, while CAGR tells you annualized return over time. CAGR is better for comparing long-term investments.
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