Convertible Debenture

Such type of debenture can be converted into shares, but only in equity shares.

Debenture: Debenture holder is the creditor of company, when company borrows money from public.

Equity Shares

 Equity share holder is the real owner of the company.

 Equity share holder has voting rights.

Future Market

 Commodity market

 In this market dealing is for future.

 Commodities & metals are traded in this market

 This market is regulated by Forward Market Commission under the Forward Contract Regulation Act (FCRA).

Gilt Edge market

 This is the government security market where government securities are traded.

 This is low profit market but low risk market.

 This market is not open for public but on the recommendation of government or RBI opened for public for some time.

For example:

Before some time, the RBI issued the Inflation Index Board (IIB) in this market. This bond had a maturity period of 3 years.

IPO (Initial Public Offer)

 When a company issues its share for the first time, it is known as IPO.

 This is a part of primary market.

 IPO can be the cheapest share of the company.

 IPO can be more beneficial than any other shares.

 IPO can be issued by unlisted company.

FPO (Follow on Public Offer)

When a company launch the share after IPO, it is known as FPO.

MSF – (Marginal Standing Facility) : The facility in which RBI provide loan to the bank only for one day

 MSF interest Rate is always equal to Bank Rate

 By using MSF facility bank can borrow:

 Maximum 2% of their total deposit in RBI and 1 crore

NFO (New Fund Offer)

 When a group of companies launch the share or when a company launch the share for a different scheme than its original one, it is known as NFO.

 For example, Closed ended funds: these are traded for a specific period of time.

P- Note (Participatory Note):

 P-note is issued by FII (Foreign Institutional Investor) on the recommendation of SEBI in India.

 Without P- Notes, any foreign cannot investor cannot invest.

PLR – (Prime Lending Rate) : On this rate bank provide loan to his prime customers

 Another name of PLR is BPLR i.e. (Benchmark Prime lending rate)

 PLR is replaced by Base Rate

 Sub PLR : On this rate bank provide loan to unsecured persons

 Most PLR : On this rate bank provide loan to his employees

Preferential Shares:

In this type of shares company gives preference in distributing their dividend i.e. part of profit.