The present book is intended to give ordinary investors a basic understanding about the Indian stock market. It covers a wide range of aspects including, for example, choosing the right companies; understanding the market’s behaviour over both the short-term and the long-term; the relationship of the secondary market for shares to the market for new issues of shares, etc.
The book also explains the market’s terminology, such as the P/E ratio, dividend yield, as well as important accounting terms.
Shares cannot now be traded in the form of paper certificates but only in demat form. India has two competing depositors, viz. the National Securities Depository Limited and the Central Depository Services Limited. Investors need to understand how the depository system operates.
Listed companies are required to follow a prescribed system of corporate governance. An important requirement relates to appointment of “Independent Directors”. The idea is to protect the interest the shareholders and the general public. A separate chapter examines the prevailing corporate governance system.
There is also a chapter on the share buyback system which is a relatively new practice in India.
An investors may invest in shares directly or through mutual funds. There is a great variety of mutual fund schemes. These are briefly explained so that the investor can choose the best ones from his/her point of view.
At the end, the book provides a comprehensive Glossary of relevant terms.
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