Glossary

A considerable rise in the value of a commodity market after a decline.

Every security in the financial market is subject to risk or infact a plethora of risks. It is very difficult for an investor to evaluate risk. There are certain agencies engaged in providing credit rating to the securities issued by the various issuers. The rating is done specific to the security. Crisil, Icra, Care are some of the credit rating agencies.  

Real rate of interest is the excess of interest rate over the rate of inflation.

The Real return from any investment is the return earned on an investment after adjusting for the rate of inflation.

Date, set by the issuing in order to be eligible to receive a declared dividend or capital gains distribution. Record date is the date on which the company provides the benefits to the security holders. Those who are having the securities in their name in their account are eligible to receive the benefit.

It is the date announced by the mutual fund, which is a cut-off date for receiving corporate benefits like dividends, rights, bonus etc. Only investors whose names appear in the AMC registers on that date are eligible for the said benefits.

Red Herring Prospectus is a prospectus which does not have details of either price or number of shares being offered or the amount of issue. This means that in case price is not disclosed, the number of shares and the upper and lower price bands are disclosed. On the other hand, an issuer can state the issue size and the number of shares are determined later. An RHP for an FPO can be filed with the RoC without the price band and the issuer, in such a case will notify the floor price or a price band by way of an advertisement one day prior to the opening of the issue. In the case of book-built issues, it is a process of price discovery and the price cannot be determined until the bidding process is completed. Hence, such details are not shown in the Red Herring prospectus filed with ROC in terms of the provisions of the Companies Act. Only on completion of the bidding process, the details of the final price are included in the offer document. The offer document filed thereafter with ROC is called a prospectus.  

Shares that may be redeemed at the option of the issuer and/or the shareholder on or after the pre specified time.

The return of an investor's principal in a security, such as a bond, preferred stock or mutual fund shares, at maturity.

The price, specified at issuance, at which a bond or preferred stock can be redeemed by the issuer.