General Studies Manual

for
UPSC and State Public Services
Examinations
2014

Indian Economy
Module-11: Capital Markets & Investment Markets


www.gktoday.in

First Published in 2010

Last Updated: November 2013

© 2010-2013 Suresh Soni | All Rights Reserved

0Q RCTV QH VJKU RWDNKECVKQP OC[ DG TGRTQFWEGF QT EQRKGF KP CP[ OCVGTKCN HQTO
KPENWFKPI RJQVQ EQR[KPI QT
UVQTKPI KV KP CP[ OGFKWO KP HQTO QH ITCRJKEU GNGEVTQPKE QT OGEJCPKECN OGCPU CPF YJGVJGT QT PQV VTCPUKGPV QT
KPEKFGPVCN VQ UQOG QVJGT WUG QH VJKU RWDNKECVKQP YKVJQWV YTKVVGP RGTOKUUKQP QH VJG EQR[TKIJV QYPGT

Disclaimer
9JKNG CNN ECTG JCU DGGP VCMGP KP VJG RTGRCTCVKQP QH VJKU OCVGTKCN PQ TGURQPUKDKNKV[ KU CEEGRVGF D[ VJG CWVJQT HQT CP[
GTTQTU QOKUUKQPU QT KPCEEWTCEKGU 6JG OCVGTKCN RTQXKFGF KP VJKU TGUQWTEG JCU DGGP RTGRCTGF VQ RTQXKFG IGPGTCN
KPHQTOCVKQP QPN[ +V KU Member
PQV KPVGPFGF
Name: sunil VQ DGMember's
kumar TGNKGFEmail
WRQP QT DG
address: C UWDUVKVWVG HQT NGICN QT
tripathisunilkumar21@gmail.com QVJGT RTQHGUUKQPCN CFXKEG 0Q
120.56.225.142

TGURQPUKDKNKV[ ECP DG CEEGRVGF D[ VJG CWVJQT HQT CP[ MPQYP QT WPMPQYP EQPUGSWGPEGU VJCV OC[ TGUWNV HTQO TGNKCPEG QP
CP[ KPHQTOCVKQP RTQXKFGF KP VJKU RWDNKECVKQP
  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Contents
Chapter 1. Capital Markets......................................................................................................................3
Understanding the Share Capital.................................................................................................3
Share Capital ...............................................................................................................................4
Share versus Share Capital ....................................................................................................................5
Types of Share Capital .................................................................................................................6
Capital Reserves versus Reserve Capital .....................................................................................7
Understanding Shares ..................................................................................................................7
Preference Shares.........................................................................................................................7
Types of Preference Shares ..........................................................................................................8
Difference between Preference Shares and Equity shares .....................................................................9
Preference Shares: Some more observations .........................................................................................9
Procedure of issuing the shares ................................................................................................ 10
Issuing a prospectus ............................................................................................................................ 10
Application of Shares .......................................................................................................................... 10
Allotment of Shares ............................................................................................................................ 10
Calls on Shares .................................................................................................................................... 10
Terms of Issue of Shares...................................................................................................................... 11
IPO ....................................................................................................................................................... 12
Pricing of IPO ....................................................................................................................................... 12
Book Building....................................................................................................................................... 12
Prospectus ........................................................................................................................................... 12
Draft Offer Document .......................................................................................................................... 13
Draft Red Herring Prospectus .............................................................................................................. 13
Follow on Public Offer ......................................................................................................................... 14
Issue Price & Market Price.................................................................................................................... 14
Market Capitalization .......................................................................................................................... 14
‘Listing & Delisting of Securities".......................................................................................................... 14
Voting Rights & Differential Voting Rights (DVR)................................................................................. 14
Denomination ...................................................................................................................................... 15
Face Value ........................................................................................................................................... 15
Premium and Discount ........................................................................................................................ 15
Some Other Concepts................................................................................................................ 15
Forfeiture of shares ............................................................................................................................. 15
Bonus Shares ....................................................................................................................................... 16
Rights Shares ....................................................................................................................................... 16
Primary Market & Secondary Market .................................................................................................. 16
Stock Exchanges & Stock Markets............................................................................................. 16
Who owns the Stock Markets?............................................................................................................. 16
Factors that influence the price of a stock.......................................................................................... 17
Bid and Ask price ................................................................................................................................. 17
Index .................................................................................................................................................... 17
Depository............................................................................................................................................ 17
Depository Participant ......................................................................................................................... 18
Custodian............................................................................................................................................. 18
Securities and Security Market ............................................................................................................ 18
Regulation of Security Market ............................................................................................................. 19
Chapter 2. Debt Capital and Debt Instruments.................................................................................... 19
Debentures: ............................................................................................................................... 20
Types of Debentures ............................................................................................................................ 20
Comparison of shares and debentures................................................................................................ 21
Issue of Debentures ............................................................................................................................. 21
Issue of Debentures for Cash ............................................................................................................... 22
Redemption of Debentures .................................................................................................................. 22
Bonds ................................................................................................................................................... 23
Government Debts: .............................................................................................................................. 23
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142
Hybrid Instruments .............................................................................................................................. 23
Derivative Instruments & Derivative Markets...................................................................................... 23
Types of Derivatives............................................................................................................................. 24
Basic Terms.......................................................................................................................................... 24
Role of Future Markets in Economy..................................................................................................... 25
Option Premium’.................................................................................................................................. 25
Chapter 3. Commodity Futures............................................................................................................. 25

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

2|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

History of Commodity Forward Contracts........................................................................................... 26

Commodity Exchange .......................................................................................................................... 26
Difference between Commodity and Financial derivatives ................................................................. 26
Badla System....................................................................................................................................... 26
Chapter 4. Legislations that control the securities market.................................................................. 27
Capital Issues (Control) Act, 1947: ...................................................................................................... 27
SEBI Act, 1992:..................................................................................................................................... 27
Securities Contracts (Regulation) Act, 1956 ........................................................................................ 27
Depositories Act, 1996......................................................................................................................... 28
Companies Act, 1956:.......................................................................................................................... 28
Prevention of Money Laundering Act, 2002 ........................................................................................ 28
Chapter 5. Basics of Investments.......................................................................................................... 28
Real Assets and Financial Assets ........................................................................................................ 29
Interest Rates....................................................................................................................................... 29
Short Term Investment Options ................................................................................................ 29
Long Term Investment Options ................................................................................................. 30
Post Office Investments: ...................................................................................................................... 30
Public Provident Fund:......................................................................................................................... 30
Corporate FDs:..................................................................................................................................... 30
Bonds: .................................................................................................................................................. 31
Mutual Funds:...................................................................................................................................... 31

Chapter 1. Capital Markets
Understanding the Share Capital
‘—ƒŽŽ—•–‘™–Šƒ––Š‡…‘’ƒ‹‡•”‡‰‹•–‡”‡†—†‡”–Š‡‘’ƒ‹‡•…–ͳͻͷ͸ƒ”‡‘ˆ–Š”‡‡–›’‡•
ƒ•ˆ‘ŽŽ‘™•ǣ
o Ž‹‹–‡†‘’ƒ›
o ‘’ƒ›‹‹–‡†„›
—ƒ”ƒ–‡‡
o ‘’ƒ›‹‹–‡†„›Šƒ”‡•ǣŠ‡•‡ƒ”‡‘ˆ–™‘–›’‡•-
1. Privat‡…‘’ƒ›
2. —„Ž‹…‘’ƒ›
Unlimited Company:Š‡—Ž‹‹–‡†…‘’ƒ›‹•ƒ…‘’ƒ›™Š‡”‡–Š‡”‡‹•‘Ž‹‹–‘–Š‡Ž‹ƒ„‹Ž‹–›‘ˆ‹–•

‡„‡”•ǤŠ‹•‡ƒ•–Šƒ–‹ˆ–Š‡…‘’ƒ›•—ˆˆ‡”•ƒŽ‘••ƒ†–Š‡…‘’ƒ›ǯ•’”‘’‡”–›‹•‘–‡‘—‰Š
–‘’ƒ›‘ˆˆ‹–•†‡„–•ǡ–Š‡’”‹˜ƒ–‡’”‘’‡”–›‘ˆ‹–•‡„‡”•‹•—•‡†–‘‡‡––Š‡…Žƒ‹•‘ˆ–Š‡…”‡†‹–‘”•Ǥ
Š‹•‡ƒ•–Šƒ––Š‡”‡‹•ƒŠ—‰‡”‹•‹•—…Š…‘’ƒ‹‡•ǤŽ‹‹–‡†…‘’ƒ‹‡•ƒ”‡‘–ˆ‘—†‹†‹ƒǢ
‹•–‡ƒ†ǡ–Š‡‹”•’ƒ…‡‹•‘……—’‹‡†„›–Š‡’”‘’”‹‡–ƒ”›‹†‘ˆ„—•‹‡••‡•Ǥ
Company Limited by Guarantee:•—…Šƒ…‘’ƒ›ǡ–Š‡Ž‹ƒ„‹Ž‹–›‘ˆ–Š‡‡„‡”•‹•Ž‹‹–‡†–‘–Š‡‡š–‡–

‘ˆ‰—ƒ”ƒ–‡‡‰‹˜‡„›–Š‡‹–Š‡‡˜‡–‘ˆ™‹†‹‰—’‘ˆ–Š‡…‘’ƒ›Ǥ
Company Limited by Shares:–Š‹•‹†‘ˆ–Š‡…‘’ƒ›ǡ–Š‡Ž‹ƒ„‹Ž‹–›‘ˆ–Š‡‡„‡”•‹••–”‹…–Ž›Ž‹‹–‡†

–‘–Š‡‡š–‡–‘ˆ‘‹ƒŽ˜ƒŽ—‡‘ˆ•Šƒ”‡•Š‡Ž†„›‡ƒ…Š‘ˆ–Š‡Ǥˆƒ‡„‡”Šƒ•ƒŽ”‡ƒ†›’ƒ‹†–Š‡ˆ—ŽŽ
ƒ‘—– ‘ˆ –Š‡ •Šƒ”‡•ǡ Š‡ •ŠƒŽŽ ‘– „‡ Ž‹ƒ„Ž‡ –‘ ’ƒ› ƒ› ƒ‘—–Ǥ ˆ ƒ ‡„‡” Šƒ• ’ƒ”–Ž› ’ƒ‹† –Š‡
•Šƒ”‡•ǡŠ‡…ƒ„‡ˆ‘”…‡†–‘’ƒ›–Š‡”‡ƒ‹‹‰ƒ‘—–†—”‹‰–Š‡‡š‹•–‡…‡‘ˆ–Š‡…‘’ƒ›ƒ•™‡ŽŽ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

ƒ•†—”‹‰–Š‡™‹†‹‰—’Ǥ—…Š…‘’ƒ‹‡•ƒ”‡‘ˆ–™‘‹†•ǡ’”‹˜ƒ–‡ƒ†’—„Ž‹…Ǥ
Private Company:  ’”‹˜ƒ–‡ …‘’ƒ› ‹• –Š‡ ‘‡ ™Š‹…Š Šƒ• ƒ ‹‹— ’ƒ‹† —’ •Šƒ”‡ …ƒ’‹–ƒŽ ‘ˆ `

ͳͲͲͲͲͲ ‘” •—…Š Š‹‰Š‡” …ƒ’‹–ƒŽ ƒ• ’”‡•…”‹„‡† „› –Š‡ ‘’ƒ‹‡• …–Ǥ –• ”–‹…Ž‡ ‘ˆ ƒ••‘…‹ƒ–‹‘
‡–‹‘•–Šƒ––Š‡…‘’ƒ›

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

3|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

o ‡•–”‹…–•–Š‡”‹‰Š––‘–”ƒ•ˆ‡”‹–••Šƒ”‡•
o ‹‹–•–Š‡—„‡”‘ˆ‹–•‡„‡”•ˆ”‘ʹ–‘ͷͲ
o ƒ‘–‰‘ˆ‘”‹˜‹–ƒ–‹‘ˆ”‘’—„Ž‹…–‘•—„•…”‹’–‹‘–‘ƒ›‘ˆ‹–••Šƒ”‡•
o ƒ‘–ƒ……‡’–†‡’‘•‹–•ˆ”‘’‡”•‘•‘–Š‡”–Šƒ‹–•‡„‡”•ǡ†‹”‡…–‘”•ƒ†”‡Žƒ–‹˜‡•Ǥ
Public Company:  ’—„Ž‹… …‘’ƒ› ‡ƒ• ƒ …‘’ƒ› ™Š‹…Š ‹• ‘– ƒ ’”‹˜ƒ–‡ …‘’ƒ› ƒ† Šƒ•
‹‹— ‘ˆ ͹ •Šƒ”‡Š‘Ž†‡”•Ȁ•—„•…”‹„‡”•Ǥ – Šƒ• –‘ Šƒ˜‡ ƒ ‹‹— ’ƒ‹†-—’ •Šƒ”‡ …ƒ’‹–ƒŽ ‘ˆ ` ͷ
ƒŠǤ
Comparison of a Private Limited Company and Public Limited Company
Distinction Private Company Public Company
Minimum Paid-up Capital 1 Lakh 5 Lakh
Minimum Number of 2 7
Members
Maximum Number of 50 No restriction
Members
Transerferability of Complete Restriction No Restriction
shares
Issue of Prospectus Prohibited Free
Number of Director At least 2 At least 3
Commencement of Immediately after Only after commencement of business certificate
Business incorporation is obtained
Statutory meeting No Obligation Obligatory
Quorum 2 members 5 members
Managerial remuneration No restriction Can not exceed more than 11% of Net Profits
Share Capital
E˜‡”›„—•‹‡••‡‡†••‘‡…ƒ’‹–ƒŽ–‘•–ƒ”–—’ǤŠ‡ƒ‡™„—•‹‡••‹••–ƒ”–‡†ǡ–Š‡’‡”•‘ƒŽ•ƒ˜‹‰•
‘ˆƒ‡–”‡’”‡‡—”ƒŽ‘‰™‹–Š…‘–”‹„—–‹‘•ˆ”‘ˆ”‹‡†•ƒ†”‡Žƒ–‹˜‡•ƒ”‡–Š‡•‘—”…‡‘ˆˆ—†ǤŠ‡
‡–”‡’”‡‡—”‹–Š‹•…ƒ•‡…ƒƒŽ•‘„‡…ƒŽŽ‡†ƒ ’”‘‘–‡”ǤŠ‹•ƒ›‘–„‡ˆ‡ƒ•‹„Ž‡‹…ƒ•‡‘ˆ Žƒ”‰‡
’”‘Œ‡…–•ƒ•–Š‡”‡“—‹”‡†…‘–”‹„—–‹‘ˆ”‘–Š‡‡–”‡’”‡‡—”ȋ’”‘‘–‡”Ȍ™‘—Ž†„‡˜‡”›Žƒ”‰‡‡˜‡
ƒˆ–‡”ƒ˜ƒ‹Ž‹‰–‡”Ž‘ƒǢ–Š‡’”‘‘–‡”ƒ›‘–„‡ƒ„Ž‡–‘„”‹‰Š‹•ȀŠ‡”•Šƒ”‡ȋ‡“—‹–›…ƒ’‹–ƒŽȌǤŠ—•
ƒ˜ƒ‹Žƒ„‹Ž‹–›‘ˆ…ƒ’‹–ƒŽ…ƒ„‡ƒƒŒ‘”…‘•–”ƒ‹–‹•‡––‹‰—’‘”‡š’ƒ†‹‰„—•‹‡••‘ƒŽƒ”‰‡•…ƒŽ‡ǡ
„‡…ƒ—•‡‘ˆ–Š‹•Ž‹‹–‡†’‘‘Ž‘ˆ•ƒ˜‹‰•‘ˆ•ƒŽŽ…‹”…Ž‡‘ˆˆ”‹‡†•ƒ†”‡Žƒ–‹˜‡•Ǥ
‘™‡˜‡”ǡ‹•–‡ƒ†‘ˆ†‡’‡†‹‰—’‘–Š‹••ƒŽŽ’‘‘Žǡ–Š‡’”‘‘–‡”Šƒ•–Š‡‘’–‹‘‘ˆ”ƒ‹•‹‰‘‡›
ˆ”‘–Š‡’—„Ž‹…ƒ…”‘••–Š‡…‘—–”›„›•‡ŽŽ‹‰ȋ‹••—‹‰Ȍ•Šƒ”‡•‘ˆ–Š‡…‘mpan›Ǥ ‘”–Š‹•’—”’‘•‡ǡ–Š‡
’”‘‘–‡” …ƒ ‹˜‹–‡ ‹˜‡•–‡– –‘ Š‹• ‘” Š‡” ˜‡–—”‡ „› ‹••—‹‰ ‘ˆˆ‡” †‘…—‡– ™Š‹…Š ‰‹˜‡• ˆ—ŽŽ
†‡–ƒ‹Ž•ƒ„‘—––”ƒ…”‡…‘”†ǡ–Š‡…‘’ƒ›ǡ–Š‡ƒ–—”‡‘ˆ–Š‡’”‘Œ‡…–ǡ–Š‡„—•‹‡••‘†‡Žǡ–Š‡‡š’‡…–‡†
’”‘ˆ‹–ƒ„‹Ž‹–›‡–…Ǥˆƒ‹˜‡•–‘”‹•…‘ˆ‘”–ƒ„Ž‡™‹–Š–Š‹•’”‘’‘•‡†˜‡–—”‡ǡŠ‡Ȁ•Š‡ƒ›‹˜‡•–ƒ†
–Š—• „‡…‘‡ ƒ •Šƒ”‡Š‘Ž†‡” ‘ˆ –Š‡ …‘’ƒ›Ǥ Š‹• ‡ƒ• –Šƒ– ƒ •Šƒ”‡Š‘Ž†‡” ‹• ƒ ‘™‡” ‘ˆ –Š‡
…‘’ƒ›–‘–Š‡‡š–‡–‘ˆŠ‹•ȀŠ‡”•Šƒ”‡Š‘Ž†‹‰Ǥ Š‡˜ƒŽ—‡•‘ˆ–Š‡•‡•Šƒ”‡•ƒ”‡˜‡”›•ƒŽŽǡ„—–™Š‡
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142
–Š‡ Žƒ”‰‡ —„‡” ‘ˆ •Šƒ”‡• ƒ‰‰”‡‰ƒ–‡ǡ ‹– ƒ‡• •—„•–ƒ–‹ƒŽ ƒ‘—– ™Š‹…Š ‹• —•ƒ„Ž‡ ˆ‘” Žƒ”‰‡
…‘”’‘”ƒ–‡•Ǥ
Š‡–‘–ƒŽ…ƒ’‹–ƒŽ‘ˆ–Š‡…‘’ƒ›‹•†‹˜‹†‡†‹–‘—‹–•‘ˆ•ƒŽŽ†‡‘‹ƒ–‹‘•ƒ•‡–‹‘‡†ƒ„‘˜‡Ǥ
ƒ…Š—‹–‹•…ƒŽŽ‡†ƒ•Šƒ”‡Ǥ ‘”‡šƒ’Ž‡‹ˆ–Š‡–‘–ƒŽ…ƒ’‹–ƒŽˆ–Š‡…‘’ƒ›‹•`ͳͲƒŠ†‹˜‹†‡†‹–‘ͳ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

4|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

ƒŠ—‹–•‘ˆ`ͳͲ‡ƒ…Šǡ‡ƒ…Š`ͳͲ—‹–™‹ŽŽ„‡…ƒŽŽ‡†ƒ•Šƒ”‡ǤŠƒ”‡•ƒ”‡—„‡”‡†•‘–Šƒ––Š‡›…ƒ
„‡‹†‡–‹ˆ‹‡†Ǥ
Ž‡ƒ•‡‘–‡–Šƒ–ˆ‘ŽŽ‘™‹‰ƒ”‡–Š‡’”‘’‡”–‹‡•‘ˆƒŽŽ‹†•‘ˆ•Šƒ”‡•‘ˆƒ’—„Ž‹……‘’ƒ›ǣ
o Š‡›ƒ”‡‘˜ƒ„Ž‡’”‘’‡”–›
o Š‡›ƒ”‡–”ƒ•ˆ‡”ƒ„Ž‡‹–Š‡ƒ‡”’”‡•…”‹„‡†‹–Š‡”–‹…Ž‡•‘ˆ••‘…‹ƒ–‹‘
o Š‡›ƒ”‡–”‡ƒ–‡†ƒ•
‘‘†•—†‡”–Š‡ƒŽ‡‘ˆ
‘‘†•…–ǡͳͻ͵ͲǤ
o ‡„‡”™Š‘Š‘Ž†•–Š‡•Šƒ”‡•‘ˆƒ…‘’ƒ›†‘‡•‘–‹’Ž›–Šƒ––Š‡‡„‡”‘™•ƒ›‘ˆ–Š‡
…‘’ƒ›ǯ• ƒ••‡–•Ǥ Š‹• ‹• „‡…ƒ—•‡ ƒ••‡–• ™‘—Ž† „‡ •–‹ŽŽ ’‘••‡••‡† „› –Š‡ …‘’ƒ› ™Š‹…Š ‹• ƒ
Ž‡‰ƒŽ ’‡”•‘ ‹ ‹–•‡ŽˆǤ ‘™‡˜‡”ǡ ‹ˆ –Š‡ …‘’ƒ› ‹• ™‘—† —’ǡ ƒˆ–‡” •‡ŽŽ‹‰ ‹–• ƒ••‡–•ǡ –Š‡
•Šƒ”‡Š‘Ž†‡”Šƒ•–Š‡”‹‰Š––‘’ƒ”–‹…‹’ƒ–‡‹–Š‡ƒ••‡–•ƒˆ–‡”–Š‡†‡„–•Šƒ˜‡„‡‡’ƒ‹†ǤŠ‹•‡ƒ•
–Šƒ– ‹– ‹• –Š‡ ”‹‰Š– –‘ ™Šƒ– ƒ••‡–• ”‡ƒ‹ ƒˆ–‡” Ž‹“—‹†ƒ–‹‘Ǥ – –Š‡ •ƒ‡ –‹‡ǡ –Š‡
•Šƒ”‡Š‘Ž†‡”‹•ƒŽ•‘Ž‹ƒ„Ž‡ˆ‘”–Š‡ƒ‘—–ǡ‹ˆƒ›—’ƒ‹†‘–Š‡•Šƒ”‡•Š‡Ž†„›Š‹Ǥ
Share versus Share Capital
PŽ‡ƒ•‡‘–‡–Šƒ–‹…‘–‡š–‘ˆƒ…‘’ƒ›ǡƒ’‹–ƒŽ‡ƒ•–Š‡•Šƒ”‡…ƒ’‹–ƒŽ‘Ž›ǤŠ‡”‡ƒ•‘‹•–Šƒ–
ƒ› ‹˜‡•–‘”• ƒ† ’”‘‘–‡”• …‘–”‹„—–‡ ˜ƒ”›‹‰ •—• –‘ –Š‡ ‘’ƒ›ǯ• …ƒ’‹–ƒŽ ›‡–ǡ –Š‡”‡ ‹• ‘
•‡’ƒ”ƒ–‡ƒ’‹–ƒŽƒ……‘—–ˆ‘”‡ƒ…Š‹˜‡•–‘”‘”’”‘‘–‡”Ǥ‡…‡ǡ–Š‡”‡‹•ƒ•‹‰Ž‡…‘•‘Ž‹†ƒ–‡†ƒ’‹–ƒŽ
……‘—–™Š‹…Š‹•…ƒŽŽ‡†–Š‡Šƒ”‡ƒ’‹–ƒŽ……‘—–Ǥ
‡”‡ƒ”‡•‘‡‹’‘”–ƒ–‘„•‡”˜ƒ–‹‘•ǣ
o Equi–› ‹• ƒ ‹•–”—‡– ˆ‘” ‹–• ‘™‡” ˆ‘” •Šƒ”‡ ‹ ’”‘ˆ‹–• ȋƒ† Ž‘••‡•ȌǤ “—‹–› •Šƒ”‡• ƒ”‡
‹•–”—‡–•‹••—‡†„›…‘’ƒ‹‡•–‘”ƒ‹•‡…ƒ’‹–ƒŽƒ†‹–”‡’”‡•‡–•–Š‡–‹–Ž‡–‘–Š‡‘™‡”•Š‹’
‘ˆ ƒ …‘’ƒ›Ǥ  ‹˜‡•–‘” „‡…‘‡• ƒ ‘™‡” ‘ˆ ƒ …‘’ƒ› „› •—„•…”‹„‹‰ –‘ ‹–• ‡“—‹–›
…ƒ’‹–ƒŽ ȋ™Š‡”‡„› ‹˜‡•–‘” ™‹ŽŽ „‡ ƒŽŽ‘––‡† •Šƒ”‡•Ȍ ‘” „› „—›‹‰ ‹–• •Šƒ”‡• ˆ”‘ ‹–• ‡š‹•–‹‰
ownersǤ • ƒ •Šƒ”‡Š‘Ž†‡”ǡ ‹˜‡•–‘”• „‡ƒ” –Š‡ ‡–”‡’”‡‡—”‹ƒŽ ”‹• ‘ˆ –Š‡ „—•‹‡•• ˜‡–—”‡
ƒ†ƒ”‡‡–‹–Ž‡†–‘„‡‡ˆ‹–•‘ˆ‘™‡”•Š‹’Ž‹‡•Šƒ”‡‹–Š‡†‹•–”‹„—–‡†’”‘ˆ‹–ȋ†‹˜‹†‡†Ȍ‡–…Ǥ
Š‡ ”‡–—”• ‡ƒ”‡† ‹ ‡“—‹–› †‡’‡† —’‘ –Š‡ ’”‘ˆ‹–• ƒ†‡ „› –Š‡ …‘’ƒ›ǡ …‘’ƒ›ǯ•
future‰”‘™–Š‡–…Ǥ
o “—‹–› •Šƒ”‡ ‹• ‹‹–‹ƒŽŽ› ‹••—‡† –‘ –Š‘•‡ ™Š‘ Šƒ˜‡ …‘–”‹„—–‡† …ƒ’‹–ƒŽ ‹ •‡––‹‰ —’ ƒ
‡–‡”’”‹•‡Ǥ Š‹• ™‘—Ž† „‡ …ƒŽŽ‡† –Š‡ —„Ž‹… ••—‡Ǥ ’ƒ”– ˆ”‘ ƒ —„Ž‹… ••—‡ǡ ‡“—‹–› •Šƒ”‡•
ƒ› ‘”‹‰‹ƒ–‡ –Š”‘—‰Š ƒ ‹••—‡ ‘ˆ ‘—• Šƒ”‡•ǡ ‘˜‡”–‹„Ž‡ •‡…—”‹–‹‡• ‡–…Ǥ ŽŽ ‘ˆ –Š‡ ƒ”‡
…‘ŽŽ‡…–‹˜‡Ž›…ƒŽŽ‡†‘‘–‘…‘”‹’Ž›–‘…Ǥ
o Ž‡ƒ•‡ ‘–‡ –Šƒ– ‹ˆ –Š‡ …‘’ƒ› ˆƒ‹Ž• ‘” ‰‡–• Ž‹“—‹†ƒ–‡† ‘–Š‡”™‹•‡ǡ –Š‡ …Žƒ‹ ‘ˆ ‡“—‹–›
•Šƒ”‡Š‘Ž†‡”•‘‡ƒ”‹‰•ƒ†‘ƒ••‡–•‹–Š‡‡˜‡–‘ˆŽ‹“—‹†ƒ–‹‘ǡˆ‘ŽŽ‘™•ƒŽŽ‘–Š‡”•.‹‹Žƒ”Ž›ǡ
–Š‡ †‹˜‹†‡† ‘ ‡“—‹–›
Member •Šƒ”‡•
Name: sunil ‹• ’ƒ‹†
kumar Member's ƒˆ–‡”
Email address: ‡‡–‹‰ ‹–‡”‡•–120.56.225.142
tripathisunilkumar21@gmail.com ‘„Ž‹‰ƒ–‹‘• ƒ† †‹˜‹†‡†• –‘
”‡ˆ‡”‡…‡ •Šƒ”‡Š‘Ž†‡”•Ǥ Šƒ– ‹• ™Š› –Š‡ Š‘Ž†‡”• ‘ˆ –Š‡ “—‹–› •Šƒ”‡• ƒ”‡ ƒŽ•‘ ‘™ ƒ•
Ǯ”‡•‹†—ƒŽ ‘™‡”•ǯǤ ‹…‡ –Š‡ ‡“—‹–› •Šƒ”‡Š‘Ž†‡”• „‡ƒ” •—…Š ”‹••ǡ –Š‡› ‡š’‡…– Šƒ†•‘‡
”‡–—”• „› ™ƒ› ‘ˆ  ƒ† ’”‹…‡ ƒ’’”‡…‹ƒ–‹‘ ‘ˆ –Š‡ •Šƒ”‡ǡ ™Š‡ –Š‡‹” ‡–‡”’”‹•‡
’‡”ˆ‘”•™‡ŽŽǤ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

5|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

o Š‡ –‘–ƒŽ ‡“—‹–› …ƒ’‹–ƒŽ ‘ˆ ƒ …‘’ƒ› ‹• †‹˜‹†‡† ‹–‘ ‡“—ƒŽ —‹–• ‘ˆ •ƒŽŽ †‡‘‹ƒ–‹‘•ǡ
‡ƒ…Š…ƒŽŽ‡†ƒ•Šƒ”‡Ǥ ‘”‡šƒ’Ž‡ǡ‹ƒ…‘’ƒ›–Š‡–‘–ƒŽ‡“—‹–›…ƒ’‹–ƒŽ‘ˆ•ʹǡͲͲǡͲͲǡͲͲͲ‹•
†‹˜‹†‡†‹–‘ʹͲǡͲͲǡͲͲͲ—‹–•‘ˆ•ͳͲ‡ƒ…ŠǤƒ…Š•—…Š—‹–‘ˆ•ͳͲ‹•…ƒŽŽ‡†ƒŠƒ”‡ǤŠ—•ǡ–Š‡
…‘’ƒ› –Š‡ ‹• •ƒ‹† –‘ Šƒ˜‡ ʹͲǡͲͲǡͲͲͲ ‡“—‹–› •Šƒ”‡• ‘ˆ • ͳͲ ‡ƒ…ŠǤ Š‡ Š‘Ž†‡”• ‘ˆ •—…Š
•Šƒ”‡•ƒ”‡‡„‡”•‘ˆ–Š‡…‘’ƒ›ƒ†Šƒ˜‡˜‘–‹‰”‹‰Š–•Ǥ
Types of Share Capital
Š‡”‡ ƒ”‡ ˜ƒ”‹‘—• –‡”• —•‡† ‹ …‘‡…–‹‘ ™‹–Š –Š‡ •Šƒ”‡ …ƒ’‹–ƒŽ ‘ˆ –Š‡ …‘’ƒ›Ǥ Š‡› ƒ”‡ ƒ•
ˆ‘ŽŽ‘™•ǣ
Authorized / Registered / Nominal Capital:Š‹•‹•–Š‡ƒš‹—ƒ’‹–ƒŽ™Š‹…Š–Š‡…‘’ƒ›…ƒ”ƒ‹•‡‹‹–•

Ž‹ˆ‡ –‹‡Ǥ Š‹• ‹• ‡–‹‘‡† ‹ –Š‡ ‡‘”ƒ†— ‘ˆ –Š‡ ••‘…‹ƒ–‹‘ ‘ˆ –Š‡ ‘’ƒ›Ǥ Š‹• ‹• ƒŽ•‘
…ƒŽŽ‡†ƒ•‡‰‹•–‡”‡†ƒ’‹–ƒŽ‘”‘‹ƒŽƒ’‹–ƒŽǤ
Issued Capital:Š‹•‹•–Š‡’ƒ”–‘ˆ–Š‡—–Š‘”‹•‡†ƒ’‹–ƒŽ™Š‹…Š‹•‹••—‡†–‘–Š‡’—„Ž‹…ˆ‘”—„•…”‹’–‹‘Ǥ

Š‡ƒ…–‘ˆ…”‡ƒ–‹‰‡™‹••—‡†•Šƒ”‡•‹•…ƒŽŽ‡†‹••—ƒ…‡ǡƒŽŽ‘…ƒ–‹‘‘”ƒŽŽ‘–‡–Ǥˆ–‡”ƒŽŽ‘–‡–ǡƒ
•—„•…”‹„‡”„‡…‘‡•ƒ•Šƒ”‡Š‘Ž†‡”ǤŠ‡—„‡”‘ˆ‹••—‡†•Šƒ”‡•‹•ƒ•—„•‡–‘ˆ–Š‡–‘–ƒŽƒ—–Š‘”‹œ‡†
sharesƒ†
Šƒ”‡•ƒ—–Š‘”‹œ‡†αŠƒ”‡•‹••—‡†ΪŠƒ”‡•—‹••—‡†
Subscribed Capital:Š‡‹••—‡†ƒ’‹–ƒŽƒ›‘–„‡ˆ—ŽŽ›•—„•…”‹„‡†„›–Š‡’—„Ž‹…Ǥ—„•…”‹„‡†ƒ’‹–ƒŽ‹•

–Šƒ– ’ƒ”– ‘ˆ ‹••—‡† ƒ’‹–ƒŽ ™Š‹…Š Šƒ• „‡‡ –ƒ‡ ‘ˆˆ „› –Š‡ ’—„Ž‹… ‹Ǥ‡Ǥ –Š‡ …ƒ’‹–ƒŽ ˆ‘” ™Š‹…Š
ƒ’’Ž‹…ƒ–‹‘•ƒ”‡”‡…‡‹˜‡†ˆ”‘–Š‡’—„lic.‘ǡ‹–‹•ƒ’ƒ”–‘ˆ–Š‡••—‡†ƒ’‹–ƒŽƒ•ˆ‘ŽŽ‘™•ǣ
••—‡†ƒ’‹–ƒŽα—„•…”‹„‡†ƒ’‹–ƒŽΪ•—„•…”‹„‡†ƒ’‹–ƒŽ
Š‹•…ƒ„‡—†‡”•–‘‘†„›ƒ‡šƒ’Ž‡Ǥˆ™‡•ƒ›–Šƒ–ͳͷͲͲͲ•Šƒ”‡•‘ˆ`ͳͲͲ‡ƒ…Šƒ”‡‘ˆˆ‡”‡†–‘–Š‡
’—„Ž‹… ƒ† ’—„Ž‹… ƒ’’Ž‹‡• ‘Ž› ˆ‘” ͳʹͲͲͲ •Šƒ”‡•ǡ –Š‡ –Š‡ ••—‡† ƒ’‹–ƒŽ ™‘—Ž† „‡ ` ͳͷ ƒŠ ƒ†
—„•…”‹„‡†ƒ’‹–ƒŽ™‘—Ž†„‡`ͳʹƒŠǤ
Ž‡ƒ•‡ ‘–‡ –Šƒ– ‘…‡ –Š‡ •Šƒ”‡• Šƒ˜‡ „‡‡ ‹••—‡† ƒ† ’—”…Šƒ•‡† „› ‹˜‡•–‘”• ƒ† ƒ”‡ Š‡Ž† „›
–Š‡ǡ –Š‡› ƒ”‡ …ƒŽŽ‡† Šƒ”‡• —–•–ƒ†‹‰Ǥ  Š‡•‡ ‘—–•–ƒ†‹‰ •Šƒ”‡• Šƒ˜‡ ”‹‰Š–• ƒ† ”‡’”‡•‡–
‘™‡”•Š‹’‹–Š‡…‘”’‘”ƒ–‹‘„›–Š‡’‡”•‘–Šƒ–Š‘Ž†•–Š‡•Šƒ”‡•ǤŠ‡—•—„•…”‹„‡†…ƒ’‹–ƒŽ‹•ƒŽ•‘
‘™ƒ•”‡ƒ•—”›•Šƒ”‡•ǡ™Š‹…Šƒ”‡•Šƒ”‡•Š‡Ž†„›–Š‡…‘”’‘”ƒ–‹‘‹–•‡Žˆƒ†Šƒ˜‡‘‡š‡”…‹•ƒ„Ž‡
”‹‰Š–•ǤŠƒ”‡•‘—–•–ƒ†‹‰’Ž—•–”‡ƒ•—”›•Šƒ”‡•–‘‰‡–Š‡”ƒ‘—––‘–Š‡—„‡”‘ˆ‹••—‡†•Šƒ”‡•Ǥ
Called – up Capital: Š‡ ‘’ƒ› ƒ› ‘– ‡‡†–‘ ”‡…‡‹˜‡ –Š‡ ‡–‹”‡ ƒ‘—– ‘ˆ …ƒ’‹–ƒŽ ‘ˆ …ƒ’‹–ƒŽ ƒ–

‘…‡Ǥ–ƒ›…ƒŽŽ—’‘Ž›’ƒ”–‘ˆ–Š‡•—„•…”‹„‡†…ƒ’‹–ƒŽƒ•ƒ†™Š‡‡‡†‡†‹‹•–ƒŽ‡–•ǤTŠ—•ǡ–Š‡
cƒŽŽ‡†–—’ƒ’‹–ƒŽ‹•–Š‡’ƒ”–‘ˆǷ•—„•…”‹„‡†…ƒ’‹–ƒŽ™Š‹…Š–Š‡…‘’ƒ›Šƒ•ƒ…–—ƒŽŽ›…ƒŽŽ‡†—’‘–Š‡
•Šƒ”‡Š‘Ž†‡”•–‘’ƒ›ǤƒŽŽ‡†–—’ƒ’‹–ƒŽ‹…Ž—†‡•–Š‡ƒ‘—–’ƒ‹†„›–Š‡•Šƒ”‡Š‘Ž†‡”ˆ”‘–‹‡–‘
–‹‡‘ƒ’’Ž‹…ƒ–‹‘ǡ‘ƒŽŽ‘–‡–ǡ‘˜ƒ”‹‘—•…ƒŽŽ••—…Šƒ• ‹”•–ƒŽŽǡ‡…‘†ƒŽŽǡ ‹ƒŽƒŽŽ‡–…ǤŠ‡
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

”‡ƒ‹‹‰ ’ƒ”– ‘ˆ •—„•…”‹„‡ …ƒ’‹–ƒŽ ‘– ›‡– …ƒŽŽ‡† —’ ‹• ‘™ ƒ• …ƒŽŽ‡† ƒ’‹–ƒŽǤ Š‡ …ƒŽŽ‡†
ƒ’‹–ƒŽƒ›„‡…‘˜‡”–‡†ǡ„›’ƒ••‹‰ƒ•’‡…‹ƒŽ”‡•‘Ž—–‹‘ǡ‹–‘‡•‡”˜‡ƒ’‹–ƒŽǢ‡•‡”˜‡ƒ’‹–ƒŽ…ƒ„‡
…ƒŽŽ‡†—’‘Ž›‹…ƒ•‡‘ˆ™‹†‹‰—’‘ˆ–Š‡…‘’ƒ›ǡ–‘‡‡––Š‡Ž‹ƒ„‹Ž‹–‹‡•ƒ”‹•‹‰–Š‡Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

6|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Paid-up Capital:Š‡ƒŽŽ‡†-—’ƒ’‹–ƒŽƒ›‘–„‡ˆ—ŽŽ›’ƒ‹†Ǥ‘‡Šƒ”‡Š‘Ž†‡”•ƒ›’ƒ›‘Ž›’ƒ”–‘ˆ

–Š‡ƒ‘—–”‡“—‹”‡†–‘„‡’ƒ‹†‘”ƒ›‘–’ƒ›ƒ–ƒŽŽǤPaid-upƒ’‹–ƒŽ‹•–Š‡’ƒ”–‘ˆ…ƒŽŽ‡†-—’…ƒ’‹–ƒŽ
™Š‹…Š‹•ƒ…–—ƒŽŽ›’ƒ‹†„›–Š‡•Šƒ”‡Š‘Ž†‡”•Ǥ Š‡”‡ƒ‹‹‰’ƒ”–‹†‹…ƒ–‡•–Š‡†‡ˆƒ—Ž–‹’ƒ›‡–‘ˆ
…ƒŽŽ•„›•‘‡•Šƒ”‡Š‘Ž†‡”•ǡ‘™ƒ•ƒŽŽ•‹””‡ƒ”•ǤŠ—•ǡ
Paid-—’ƒ’‹–ƒŽαCalled-—’ƒ’‹–ƒŽ–ƒŽŽ•‹””‡ƒ”•.
‡•‡”˜‡ ƒ’‹–ƒŽǣ • ‡–‹‘‡† ƒ„‘˜‡ǡ –Š‡ …‘’ƒ› „› •’‡…‹ƒŽ ”‡•‘Ž—–‹‘ ƒ› †‡–‡”‹‡ –Šƒ– ƒ
’‘”–‹‘‘ˆ–Š‡—…ƒŽŽ‡†…ƒ’‹–ƒŽ•ŠƒŽŽ‘–„‡…ƒŽŽ‡†—’ǡ‡š…‡’–‹–Š‡‡˜‡–‘ˆ–Š‡™‹†‹‰—’‘ˆ–Š‡
…‘’ƒ›Ǥ Š‹• ’ƒ”– ‹• …ƒŽŽ‡† ‡•‡”˜‡† ƒ’‹–ƒŽǤ – ‹• ‡’– ”‡•‡”˜‡† ˆ‘” –Š‡ ”‡†‹–‘”• ‹ …ƒ•‡ ‘ˆ –Š‡
™‹†‹‰—’‘ˆ–Š‡…‘’ƒ›Ǥ
Capital Reserves versus Reserve Capital
‡”‡ ’Ž‡ƒ•‡ ‘–‡ –Šƒ– ƒ’‹–ƒŽ ‡•‡”˜‡ ƒ† ‡•‡”˜‡ ƒ’‹–ƒŽ ƒ”‡ –™‘ †‹ˆˆ‡”‡– ƒ‹ƒŽ•Ǥ ƒ’‹–ƒŽ
Reservesƒ”‡–Š‘•‡”‡•‡”˜‡•™Š‹…Šƒ”‡…”‡ƒ–‡†‘—–‘ˆ–Š‡ƒ’‹–ƒŽ”‘ˆ‹–•Ǥƒ’‹–ƒŽ”‘ˆ‹–•ƒ”‡–Š‘•‡
’”‘ˆ‹–•™Š‹…Šƒ”‡‘–‡ƒ”‡†‹–Š‡‘”ƒŽ…‘—”•‡‘ˆ–Š‡„—•‹‡••Ǥ‘‡‡šƒ’Ž‡•ƒ”‡ƒ•ˆ‘ŽŽ‘™•ǣ
o ”‘ˆ‹–‘•ƒŽ‡‘ˆˆ‹š‡†ƒ••‡–•
o ”‘ˆ‹–‘”‡˜ƒŽ—ƒ–‹‘‘ˆˆ‹š‡†assets
o ”‡‹—‘‹••—‡‘ˆ•Šƒ”‡•ƒ††‡„‡–—”‡•
o ”‘ˆ‹–‘”‡†‡’–‹‘‘ˆ†‡„‡–—”‡•
o ”‘ˆ‹–‡ƒ”‡†„›–Š‡…‘’ƒ›’”‹‘”–‘‹–•‹…‘”’‘”ƒ–‹‘
Ž‡ƒ•‡‘–‡–Šƒ–ƒ’‹–ƒŽ‡•‡”˜‡•…ƒ‘–„‡—–‹Ž‹œ‡†ˆ‘”–Š‡†‹•–”‹„—–‹‘‘ˆ†‹˜‹†‡†•ƒ•†‹˜‹†‡†•
ƒ”‡•‘‡–Š‹‰™Š‹…Š…ƒ„‡‰‹˜‡ˆ”‘ƒ’”‘ˆ‹––Šƒ–‹•‡ƒ”‡†„›‘”ƒŽ„—•‹‡••‘ˆƒ…‘’ƒ›Ǥ
Understanding Shares
Dz•Šƒ”‡‹•–Š‡•Šƒ”‡‹–Š‡ƒ’‹–ƒŽ‘ˆ–Š‡‘’ƒ›dz•‘†‡ˆ‹‡•–Š‡‘’ƒ‹‡•…–ͳͻͷ͸Ǥ‘’ƒ›
…ƒ‹••—‡–™‘–›’‡•‘ˆ•Šƒ”‡•˜‹œǤEquitySharesƒ†”eferenceShares.
o Equity Shares: “—‹–› •Šƒ”‡• ‘” –Š‡ ”†‹ƒ”› Šƒ”‡• ‡ƒ• –Šƒ– ’ƒ”– ‘ˆ –Š‡ •Šƒ”‡ …ƒ’‹–ƒŽ

™Š‹…Š ‹• ‘– ƒ”‡ˆ‡”‡…‡ •Šƒ”‡ …ƒ’‹–ƒŽǤ – ‡ƒ• ƒŽŽ •—…Š •Šƒ”‡• ™Š‹…Š ƒ”‡ ‘– ”‡ˆ‡”‡…‡
•Šƒ”‡•Ǥ
o Preference Shares: ”‡ˆ‡”‡…‡ •Šƒ”‡• ƒ”‡ –Š‘•‡ •Šƒ”‡• ™Š‹…Š ˆ—Žˆ‹Ž „‘–Š –Š‡ ˆ‘ŽŽ‘™‹‰ –™‘
…‘†‹–‹‘•ǣ
o Š‡›…ƒ””›’”‡ˆ‡”‡–‹ƒŽ•Šƒ”‡”‹‰Š–‹”‡•’‡…–‘ˆ†‹˜‹†‡†ƒ–ƒˆ‹š‡†”ƒ–‡ǡ
o Š‡›ƒŽ•‘…ƒ””›’”‡ˆ‡”‡–‹ƒŽ”‹‰Š–‹”‡‰ƒ”†–‘’ƒ›‡–‘ˆ…ƒ’‹–ƒŽ‘™‹†‹‰—’‘ˆ–Š‡
company.
Preference Shares
’ƒ”– ˆ”‘ –Š‡ ‘–Š‡” †‹ˆˆ‡”‡…‡•ǡ –Š‡ ƒŒ‘” †‹ˆˆ‡”‡…‡ „‡–™‡‡ ”†‹ƒ”› •Šƒ”‡• ƒ† ’”‡ˆ‡”‡…‡
•Šƒ”‡•‹•‘ˆDz†‹˜‹†‡†dzǤ”‡ˆ‡”‡…‡•Šƒ”‡•ƒ”‡–Š‘•‡•Šƒ”‡•™Š‹…Š…ƒ””›–Š‡ˆ‘ŽŽ‘™‹‰–™‘”‹‰Š–•ǣ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

o Š‡› Šƒ˜‡ –Š‡ ”‹‰Š– –‘ ”‡…‡‹˜‡ †‹˜‹†‡† ƒ– ƒ ˆ‹š‡† ”ƒ–‡ „‡ˆ‘”‡ ƒ› †‹˜‹†‡† ‹• ’ƒ‹† ‘ –Š‡
‡“—‹–›•Šƒ”‡•

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

7|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

o Š‡ –Š‡ …‘’ƒ› ‹• ™‘—† —’ǡ –Š‡› Šƒ˜‡ ƒ ”‹‰Š– –‘ ”‡–—” ‘ˆ –Š‡ …ƒ’‹–ƒŽ „‡ˆ‘”‡ –Šƒ– ‘ˆ
‡“—‹–›•Šƒ”‡•Ǥ
o ’ƒ”–ˆ”‘–Š‡ƒ„‘˜‡ǡ–Š‡’”‡ˆ‡”‡…‡•Šƒ”‡•ƒ›…ƒ””›•‘‡‘”‡”‹‰Š–••—…Šƒ•–Š‡”‹‰Š––‘
’ƒ”–‹…‹’ƒ–‡‹‡š…‡••’”‘ˆ‹–•™Š‹…Šƒ•’‡…‹ˆ‹‡††‹˜‹†‡†Šƒ•„‡‡’ƒ‹†‘–Š‡‡“—‹–›•Šƒ”‡•‘”
–Š‡”‹‰Š––‘”‡…‡‹˜‡ƒ’”‡‹—ƒ––Š‡–‹‡‘ˆ”‡†‡’–‹‘Ǥ
Types of Preference Shares
Š‡ ™‡ „—› •Šƒ”‡•ǡ ™‡ †‘ ‘– ‹˜‡•– ‹ –Š‡ •–‘… ƒ”‡– ‹–•‡Žˆ „—– ‹ –Š‡ ‡“—‹–› •Šƒ”‡• ‘ˆ ƒ
…‘’ƒ›ǤŠƒ–ƒ‡•—•ƒ•Šƒ”‡Š‘Ž†‡”‘”’ƒ”–-‘™‡”‹–Š‡…‘’ƒ›ǤŠ‹•‡ƒ•–Šƒ–™‡‘™’ƒ”–
‘ˆ–Š‡ƒ••‡–•‘ˆ–Š‡…‘’ƒ›ǡƒ†™‡ƒ”‡‡–‹–Ž‡†–‘ƒ•Šƒ”‡‹–Š‡’”‘ˆ‹–•–Š‡•‡ƒ••‡–•‰‡‡”ƒ–‡Ǥ
…‘’ƒ› ƒ› ‡‡’ ƒ ˆ”ƒ…–‹‘ ‘ˆ ’”‘ˆ‹– ‰‡‡”ƒ–‡† ™‹–Š‹ ‹–Ǥ Š‹• ™‹ŽŽ „‡ —–‹Ž‹•‡† –‘ „—› ‡™
ƒ…Š‹‡”›‘”‘”‡”ƒ™ƒ–‡”‹ƒŽ‘”–‘”‡†—…‡‹–•Ž‘ƒ™‹–Š–Š‡„ƒǤ–†‹•–”‹„—–‡•–Š‡‘–Š‡”fraction
ƒ•†‹˜‹†‡†Ǥ
Cumulative Preference Shares:
Ž‡ƒ•‡‘–‡–Šƒ–™Š‡™‡„—›‡“—‹–›•Šƒ”‡•‘”‘”†‹ƒ”›•Šƒ”‡•ǡ™‡ƒ”‡‘–ƒ—–‘ƒ–‹…ƒŽŽ›‡–‹–Ž‡†–‘
ƒ†‹˜‹†‡†‡˜‡”››‡ƒ”ǤŠ‡†‹˜‹†‡†™‹ŽŽ„‡’ƒ‹†‘Ž›‹ˆ–Š‡…‘’ƒ›ƒ‡•ƒ’”‘ˆ‹–ƒ††‡…Žƒ”‡•ƒ
dividend.—––Šƒ–‹•‘––Š‡…ƒ•‡™‹–Š–Š‡’”‡ˆ‡”‡…‡•Šƒ”‡•Ǥ’”‡ˆ‡”‡…‡•Šƒ”‡Š‘Ž†‡”‹•‡–‹–Ž‡†
–‘ ƒ †‹˜‹†‡† ‡˜‡”› ›‡ƒ”Ǥ Ž‡ƒ•‡ ‘–‡ –Šƒ– ‹– ƒ› „‡ ’‘••‹„Ž‡ –Šƒ– ƒ …‘’ƒ› †‘‡•̵– Šƒ˜‡ –Š‡
‘‡›–‘’ƒ›†‹˜‹†‡†•‘’”‡ˆ‡”‡…‡•Šƒ”‡•‹ƒ’ƒ”–‹…—Žƒ”›‡ƒ”ǤŠ‡†‹˜‹†‡†‹•–Š‡ƒ††‡†–‘–Š‡
‡š–›‡ƒ”̵•†‹˜‹†‡†Ǥˆ–Š‡…‘’ƒ›…ƒ̵–’ƒ›‹––Š‡‡š–›‡ƒ”ƒ•™‡ŽŽǡ–Š‡†‹˜‹†‡†‡‡’•‰‡––‹‰
added —–‹Ž –Š‡ …‘’ƒ› …ƒ ’ƒ›Ǥ Š‡•‡ ƒ”‡ ‘™ ƒ• …——Žƒ–‹˜‡ ’”‡ˆ‡”‡…‡ •Šƒ”‡•Ǥ Š—•ǡ
…——Žƒ–‹˜‡ ’”‡ˆ‡”‡…‡ •Šƒ”‡• ƒ”‡ –Š‘•‡ ’”‡ˆ‡”‡…‡ •Šƒ”‡•ǡ –Š‡ Š‘Ž†‡”• ‘ˆ ™Š‹…Š ƒ”‡ ‡–‹–Ž‡† –‘
”‡…‘˜‡”–Š‡ƒ””‡ƒ”•‘ˆ’”‡ˆ‡”‡…‡†‹˜‹†‡†ǡ„‡ˆ‘”‡ƒ›†‹˜‹†‡†‹•’ƒ‹†‘‡“—‹–›•Šƒ”‡•Ǥ
Non-cumulative Preference Shares:
‘‡ ’”‡ˆ‡”‡…‡ •Šƒ”‡• ƒ”‡ ‘-…——Žƒ–‹˜‡ -- ‹ˆ –Š‡ …‘’ƒ› …ƒ̵– ’ƒ› –Š‡ †‹˜‹†‡† ˆ‘” ‘‡
’ƒ”–‹…—Žƒ”›‡ƒ”ǡ–Š‡†‹˜‹†‡†ˆ‘”–Šƒ–›‡ƒ”Žƒ’•‡•Ǥˆ–Š‡…‘’ƒ›†‘‡•‘–†‡…Žƒ”‡ƒ†‹˜‹†‡†‹ƒ›
›‡ƒ”†—‡–‘ƒ›”‡ƒ•‘ǡ•—…Š•Šƒ”‡Š‘Ž†‡”•‰‡–‘–Š‹‰‘”–Š‡›…ƒ…Žƒ‹—’ƒ‹††‹˜‹†‡†‘ˆƒ›
›‡ƒ”‹ƒ›•—„•‡“—‡–›‡ƒ”Ǥ
Participating Preference Shares
Š‡› Šƒ˜‡ ˆ‹š‡† ’”‡ˆ‡”‡…‡ †‹˜‹†‡† ƒ† ƒŽ•‘ ƒ ”‹‰Š– –‘ ’ƒ”–‹…‹’ƒ–‡ ‹ •—”’Ž—• ’”‘ˆ‹–• ƒˆ–‡” ƒ
†‹˜‹†‡†‹•’ƒ‹†Ǥ
Non-Participating Preference Shares:
—…Š•Šƒ”‡•‰‡–‘Ž›ƒˆ‹š‡†”ƒ–‡‘ˆ†‹˜‹†‡†‡˜‡”››‡ƒ”ƒ†–Š‡”‡‹•‘”‹‰Š––‘’ƒ”–‹…‹’ƒ–‡‹–Š‡
•—”’Ž—•’”‘ˆ‹–•Ǥ
Convertible Preference Shares:
‘Ž†‡”•‘ˆ–Š‡•‡•Šƒ”‡•Šƒ˜‡”‹‰Š––‘‰‡––Š‡‹”’”‡ˆ‡”‡…‡•Šƒ”‡•–‘„‡…‘˜‡”–‡†‹–‘‡“—‹–›•Šƒ”‡•
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

ȋ„—–‘–†‡„‡–—”‡•‘”‘–Š‡”†‡„–•‡…—”‹–‹‡•Ȍ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

8|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Non-Convertible Preference Shares

‘Ž†‡”• ‘ˆ –Š‡•‡ •Šƒ”‡• Šƒ˜‡ ‘ ”‹‰Š– ‘ˆ ‰‡––‹‰ –Š‡‹” ’”‡ˆ‡”‡…‡ •Šƒ”‡• …‘˜‡”–‡† ‹–‘ ‡“—‹–›
shares
Difference between Preference Shares and Equity shares
Š‡†‹ˆˆ‡”‡…‡•„‡–™‡‡–Š‡ƒ”‡Ž‹•–‡†‹–Š‡ˆ‘ŽŽ‘™‹‰–ƒ„Ž‡ǣ
Basis of Distinction Preference Shares Equity Shares
Rate of Dividend Paid at fixed rate May vary , depending upon the
profits
Arrears of Dividend Get accumulated for cumulative preference No accumulation
shares
Preferential Rights Before Equity shares After
Winding up Have a right to return of capital before equity Only paid when preference share
shares . This means they are safer. capital is paid fully
Voting Rights No voting rights Voting rights
Right to participate in Have NO right Have right
Management
Preference Shares: Some more observations
o Š‡ ’”‡ˆ‡”‡…‡ •Šƒ”‡• ƒ”‡ •ƒˆ‡” ‹˜‡•–‡–• –Šƒ –Š‡ ‡“—‹–› •Šƒ”‡•Ǥ  …ƒ•‡ –Š‡ …‘’ƒ› ‹•
™‘—† —’ ƒ† ‹–• ƒ••‡–• ȋŽƒ†ǡ „—‹Ž†‹‰•ǡ ‘ˆˆ‹…‡•ǡ ƒ…Š‹‡”›ǡ ˆ—”‹–—”‡ǡ ‡–…Ȍ ƒ”‡ „‡‹‰ •‘Ž†ǡ
–Š‡ ‘‡› –Šƒ– …‘‡• ˆ”‘ –Š‹• •ƒŽ‡ ‹• ‰‹˜‡ –‘ –Š‡ •Šƒ”‡Š‘Ž†‡”•Ǥ ˆ–‡” ƒŽŽǡ •Šƒ”‡Š‘Ž†‡”•
‹˜‡•–‹ƒ„—•‹‡••ƒ†‘™ƒ’‘”–‹‘‘ˆ‹–Ǥ
o Ž‡ƒ•‡ ‘–‡ –Šƒ– —•—ƒŽŽ›ǡ –Š‡ ’”‡ˆ‡”‡…‡ •Šƒ”‡• ƒ”‡ ‘•– …‘‘Ž› ‹••—‡† „› …‘’ƒ‹‡• –‘
‹•–‹–—–‹‘•ǤŠƒ–‡ƒ•ǡ‹–‹•‘—–‘ˆ–Š‡”‡ƒ…Š‘ˆ–Š‡”‡–ƒ‹Ž ‹˜‡•–‘”Ǥ ‘”‡šƒ’Ž‡ǡ„ƒ•ƒ†
ˆ‹ƒ…‹ƒŽ‹•–‹–—–‹‘•ƒ›™ƒ––‘‹˜‡•–‹ƒ…‘’ƒ›„—–†‘‘–™ƒ––‘„‘–Š‡”™‹–Š–Š‡
Šƒ••Ž‡•‘ˆˆŽ—…–—ƒ–‹‰•Šƒ”‡’”‹…‡•Ǥ–Šƒ–…ƒ•‡ǡ–Š‡›™‘—Ž†’”‡ˆ‡”–‘‹˜‡•–‹ƒ…‘’ƒ›̵•
’”‡ˆ‡”‡…‡•Šƒ”‡•Ǥ‘’ƒ‹‡•ǡ‘–Š‡‘–Š‡”Šƒ†ǡƒ›‡‡†‘‡›„—–ƒ”‡—™‹ŽŽ‹‰–‘–ƒ‡
ƒŽ‘ƒǤ‘–Š‡›™‹ŽŽ‹••—‡’”‡ˆ‡”‡…‡•Šƒ”‡•ǤŠ‡„ƒ•ƒ†ˆ‹ƒ…‹ƒŽ‹•–‹–—–‹‘•™‹ŽŽ„—›–Š‡
•Šƒ”‡•ƒ†–Š‡…‘’ƒ›‰‡–•–Š‡‘‡›‹–‡‡†•ǤŠ‹•™‹ŽŽƒ’’‡ƒ”‹–Š‡…‘’ƒ›̵•„ƒŽƒ…‡
•Š‡‡–ƒ•̵…ƒ’‹–ƒŽ̵ƒ†‘–ƒ•†‡„–ȋ™Š‹…Š‹•™Šƒ–™‘—Ž†Šƒ˜‡Šƒ’’‡‡†‹ˆ–Š‡›Šƒ†–ƒ‡ƒ
loan).
o ”‡ˆ‡”‡…‡ Šƒ”‡• ƒ”‡  –”ƒ†‡† ‹ •–‘… ‡š…Šƒ‰‡Ǥ Š‹• ƒŽ•‘ ‡ƒ• –Š‡› ƒ”‡ ‘– ̹Ž‹“—‹†̹
ƒ••‡–•Ǣ–Š‡”‡̹•Ž‹––Ž‡•…‘’‡ˆ‘”–Š‡’”‹…‡‘ˆ–Š‡•‡•Šƒ”‡•–‘‘˜‡—’‘”†‘™Ǥ–Š‡‘–Š‡”Šƒ†ǡ
‘”†‹ƒ”› ‘” ‡“—‹–› •Šƒ”‡• ƒ”‡ –”ƒ†‡† ‹ –Š‡ ƒ”‡–• ƒ† –Š‡‹” ’”‹…‡• ‰‘ —’ ƒ† †‘™
†‡’‡†‹‰‘•—’’Ž›ƒ††‡ƒ†ˆ‘”–Š‡•–‘…Ǥ—–ǡ–Šƒ–†‘‡•‘–‡ƒ–Š‡‹˜‡•–‘”‹••–—…
™‹–ŠŠ‹••Šƒ”‡•Ǥˆ–‡”ƒˆ‹š‡†’‡”‹‘†ǡƒ’”‡ˆ‡”‡…‡•Šƒ”‡Š‘Ž†‡”…ƒ•‡ŽŽŠ‹•ȀŠ‡”’”‡ˆ‡”‡…‡
•Šƒ”‡•„ƒ…–‘–Š‡…‘’ƒ›ǤŠ‹•…ƒ‘–„‡†‘‡™‹–Š–Š‡‘”†‹ƒ”›•Šƒ”‡•Ǥ”†‹ƒ”›•Šƒ”‡•
…ƒ„‡‘Ž›•‘Ž†–‘ƒ‘–Š‡”„—›‡”‹•–‘…ƒ”‡–Ǥ‡…ƒ•‡ŽŽ–Š‡‘”†‹ƒ”›•Šƒ”‡•„ƒ…–‘
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

–Š‡…‘’ƒ›‘Ž›‹ˆ–Š‡…‘’ƒ›ƒ‘—…‡•ƒ„—›„ƒ…‘ˆˆ‡”Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

9|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Procedure of issuing the shares

Issuing a prospectus
Š‡‡˜‡”•Šƒ”‡•ƒ”‡–‘„‡‹••—‡†–‘–Š‡’—„Ž‹…–Š‡…‘’ƒ›—•–‹••—‡ƒprospectus.”‘•’‡…–—•
‡ƒ•ƒ‘’‡‹˜‹–ƒ–‹‘–‘–Š‡’—„Ž‹…–‘–ƒ‡—’–Š‡•Šƒ”‡•‘ˆ–Š‡…‘’ƒ›–Š—•ƒ’”‹˜ƒ–‡…‘’ƒ›
‡‡† ‘– ‹••—‡ ’”‘•’‡…–—•Ǥ ˜‡ ƒ —„Ž‹… ‘’ƒ› ‹••—‹‰ ‹–• •Šƒ”‡• ’”‹˜ƒ–‡Ž› ‡‡† ‘– ‹••—‡ ƒ
prospectusǤ ‘™‡˜‡”ǡ ‹– ‹• ”‡“—‹”‡† –‘ ˆ‹Ž‡ ƒ Dz–ƒ–‡‡– ‹ Ž‹‡— ‘ˆ ”‘•’‡…–—•dz ™‹–Š –Š‡ ”‡‰‹•–‡” ‘ˆ
…‘’ƒ‹‡•Ǥ
Š‡ ”‘•’‡…–—• …‘–ƒ‹• ”‡Ž‡˜ƒ– ‹ˆ‘”ƒ–‹‘ Ž‹‡ ƒ‡• ‘ˆ ‹”‡…–‘”•ǡ –‡”• ‘ˆ ‹••—‡ǡ ‡–…Ǥ – ƒŽ•‘
sta–‡• –Š‡ ‘’‡‹‰ †ƒ–‡ ‘ˆ •—„•…”‹’–‹‘ Ž‹•–ǡ ƒ‘—– ’ƒ›ƒ„Ž‡ ‘ ƒ’’Ž‹…ƒ–‹‘ǡ ‘ ƒŽŽ‘–‡– Ƭ –Š‡
‡ƒ”Ž‹‡•–…Ž‘•‹‰†ƒ–‡‘ˆ–Š‡•—„•…”‹’–‹‘Ž‹•–Ǥ
Application of Shares
’‡”•‘‹–‡†‹‰–‘•—„•…”‹„‡–‘–Š‡•Šƒ”‡…ƒ’‹–ƒŽ‘ˆƒ…‘’ƒ›Šƒ•–‘•—„‹–ƒƒ’’Ž‹…ƒ–‹‘ˆ‘”
•Šƒ”‡•‹–Š‡’”‡•…”‹„‡†ˆ‘”ǡ–‘–Š‡…‘’ƒ›ƒŽ‘‰™‹–Š–Š‡ƒ’’Ž‹…ƒ–‹‘‘‡›„‡ˆ‘”‡–Š‡Žƒ•–†ƒ–‡
‘ˆ–Š‡•—„•…”‹’–‹‘‡–‹‘‡†‹–Š‡’”‘•’‡…–—•Ǥ
Over Subscription:ˆ–Š‡‘Ǥ‘ˆ•Šƒ”‡•ƒ’’Ž‹‡†ˆ‘”‹•‘”‡–Šƒ–Š‡‘Ǥ‘ˆ•Šƒ”‡•‘ˆˆ‡”‡†–‘–Š‡’—„Ž‹…

–Š‡–Šƒ–‹•…ƒŽŽ‡†ƒ•‘˜‡”—„•…”‹’–‹‘Ǥ
Under Subscription:ˆ–Š‡‘Ǥ‘ˆ•Šƒ”‡•ƒ’’Ž‹‡†ˆ‘”‹•Ž‡••–Š‡–Š‡‘Ǥ‘ˆ•Šƒ”‡•‘ˆˆ‡”‡†–‘–Š‡’—„Ž‹…

–Š‡‹–‹•…ƒŽŽ‡†ƒ•†‡”—„•…”‹’–‹‘Ǥ
Allotment of Shares
ˆ–‡”–Š‡Žƒ•–†ƒ–‡‘ˆ–Š‡”‡…‡‹’–‘ˆƒ’’Ž‹…ƒ–‹‘•‹•‘˜‡”ǡ–Š‡‹”‡…–‘”•ǡ”‘˜‹†‡™‹–Š–Š‡ƒŽŽ‘–‡–
™‘”Ǥ ‘™‡˜‡”ǡ ƒ …‘’ƒ› …ƒ‘– ƒŽŽ‘– –Š‡ •Šƒ”‡• —Ž‡•• –Š‡ ‹‹— •—„•…”‹’–‹‘ ƒ‘—–
‡–‹‘‡†‹–Š‡’”‘•’‡…–—•‹•…‘ŽŽ‡…–‡†™‹–Š‹ƒ•–‹’—Žƒ–‡†’‡”‹‘†ǤŠ‡‹”‡…–‘”•’ƒ••”‡•‘Ž—–‹‘
‹–Š‡„‘ƒ”†‡‡–‹‰ˆ‘”ƒŽŽ‘–‡–‘ˆ•Šƒ”‡•‹†‹…ƒ–‹‰…Ž‡ƒ”Ž›–Š‡…Žƒ••Ƭ‘Ǥ‘ˆ•Šƒ”‡•ƒŽŽ‘––‡†™‹–Š
–Š‡†‹•–‹…–‹˜‡—„‡”•ǤŠ‡‡––‡”•‘ˆŽŽ‘–‡–ƒ”‡•‡––‘–Š‡…‘…‡”‡†ƒ’’Ž‹…ƒ–•Ǥ‡––‡”•‘ˆ
‡‰”‡–ƒ”‡•‡––‘–Š‘•‡™Š‘ƒ”‡‘–ƒŽŽ‘––‡†ƒ›•Šƒ”‡•Ƭƒ’’Ž‹…ƒ–‹‘‘‡›‹•”‡ˆ—†‡†–‘–Š‡Ǥ
ƒ”–‹ƒŽŽŽ‘–‡–ǣ’ƒ”–‹ƒŽƒŽŽ‘–‡––Š‡…‘’ƒ›”‡Œ‡…–••‘‡ƒ’’Ž‹…ƒ–‹‘–‘–ƒŽŽ›ǡ”‡ˆ—†•–Š‡‹”
ƒ’’Ž‹…ƒ–‹‘‘‡›ƬƒŽŽ‘–•–Š‡•Šƒ”‡•–‘–Š‡”‡ƒ‹‹‰ƒ’’Ž‹…ƒ–•Ǥ
Pro-rata Allotment: Š‡ ƒ …‘’ƒ› ƒ‡• ƒ ’”‘-ratƒ ƒŽŽ‘–‡–ǡ ‹– ƒŽŽ‘–• •Šƒ”‡• –‘ ƒŽŽ ƒ’’Ž‹…ƒ–• „—–

ƒŽŽ‘–•Ž‡••‡”•Šƒ”‡•–Š‡ƒ’’Ž‹‡†ˆ‘”Ǥ‰Ǥˆƒ’‡”•‘Šƒ•ƒ’’Ž‹‡†ˆ‘”–Š”‡‡Š—†”‡†•Šƒ”‡•Š‡ƒ›‰‡–
–™‘Š—†”‡†•Šƒ”‡•Ǥ
Calls on Shares
Š‡ ”‡ƒ‹‹‰ ƒ‘—– ‘ˆ •Šƒ”‡• ƒ› „‡ …‘ŽŽ‡…–‡† ‹ ‹•–ƒŽ‡–• ƒ• Žƒ‹† †‘™ ‹ –Š‡ ’”‘•’‡…–—•Ǥ
—…Š‹•–ƒŽ‡–•ƒ”‡…ƒŽŽ‡†…ƒŽŽ•‘Šƒ”‡•ǤŠ‡›ƒ›„‡–‡”‡†ƒ•DzŽŽ‘–‡–ƒ‘—–ǡ ‹”•–ƒŽŽǡ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

‡…‘†ƒŽŽǡ‡–…Ǥdz
Calls–in–Arrears:•‘‡•Šƒ”‡Š‘Ž†‡”•ƒ›‘–’ƒ›–Š‡‘‡›†—‡ˆ”‘–Š‡ǤŠ‡‘—–•–ƒ†‹‰ƒ‘—–•

ƒ”‡–”ƒ•ˆ‡””‡†–‘ƒƒ……‘—–…ƒŽŽ‡†—’ƒ•DzƒŽŽ•-in-””‡ƒ”•dzƒ……‘—–ǤŠ‡ƒŽƒ…‡‘ˆ…ƒŽŽ•-in-ƒ””‡ƒ”•
ƒ……‘—–‹•†‡†—…–‡†ˆ”‘–Š‡ƒŽŽ‡†-—’…ƒ’‹–ƒŽ‹–Š‡ƒŽƒ…‡Š‡‡–Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

10|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Calls–in–Advance:……‘”†‹‰–‘•‡…Ǥͻʹ‘ˆ–Š‡‘’ƒ‹‡•…–ǡƒ‘’ƒ›ƒ›‹ˆ•‘ƒ—–Š‘”‹œ‡†„›‹t᪃•

ƒ”–‹…Ž‡•ǡƒ……‡’–ˆ”‘ƒ•Šƒ”‡Š‘Ž†‡”‡‹–Š‡”–Š‡™Š‘Ž‡‘”’ƒ”–‘ˆ–Š‡ƒ‘—–”‡ƒ‹‹‰—’ƒ‹†‘ƒ›
•Šƒ”‡• Š‡Ž† „› –Š‡ǡ ƒ• ƒŽŽ• ‹ ƒ†˜ƒ…‡Ǥ ‘ †‹˜‹†‡† ‹• ’ƒ‹† ‘ •—…Š …ƒŽŽ• ‹ ƒ†˜ƒ…‡Ǥ ‘™‡˜‡”ǡ
‹–‡”‡•–Šƒ•–‘„‡’ƒ‹†‘•—…Š…ƒŽŽ•‹ƒ†˜ƒ…‡Ǥ
Terms of Issue of Shares
Ž‹‹–‡†…‘’ƒ›ƒ›‹••—‡–Š‡•Šƒ”‡•‘ˆ‘ŽŽ‘™‹‰†‹ˆˆ‡”‡––‡”•Ǥ
A. ••—‡‘ˆŠƒ”‡•ˆ‘”‘•‹†‡”ƒ–‹‘‘–Š‡”–Šƒ…ƒ•Š‘”ˆ‘”…ƒ•Š‘”‘…ƒ’‹–ƒŽ‹œƒ–‹‘‘ˆ”‡•‡”˜‡•Ǥ
B. ••—‡‘ˆŠƒ”‡•ƒ–’ƒ”‹Ǥ‡Ǥƒ–ˆƒ…‡˜ƒŽ—‡‘”ƒ–‘‹ƒŽ˜ƒŽ—‡Ǥ
C. ••—‡‘ˆŠƒ”‡•ƒ–ƒ”‡‹—‹Ǥ‡Ǥƒ–‘”‡–Šƒˆƒ…‡˜ƒŽ—‡Ǥ
D. ••—‡‘ˆŠƒ”‡•ƒ–ƒ‹•…‘—–‹Ǥ‡Ǥƒ–Ž‡••–Šƒ–Š‡ˆƒ…‡˜ƒŽ—‡Ǥ
Issue of shares at a premium
Š‡–Š‡•Šƒ”‡•ƒ”‡‹••—‡†ƒ–ƒ’”‹…‡Š‹‰Š‡”–Šƒ–Š‡‘‹ƒŽ˜ƒŽ—‡‘ˆ–Š‡•Šƒ”‡•–Š‡‹–‹•…ƒŽŽ‡†ƒ•
•Šƒ”‡•‹••—‡†ƒ–ƒ’”‡‹—ǤŠ‡ƒ‘—–‘ˆ’”‡‹—‹•†‡…‹†‡†„›–Š‡„‘ƒ”†‘ˆ‹”‡…–‘”•ƒ•’‡”–Š‡
g—‹†‡Ž‹‡•‹••—‡†„›ǤŽ‡ƒ•‡‘–‡–Šƒ––Š‡‡…—”‹–‹‡•”‡‹—‹•ƒ’”‘ˆ‹––‘–Š‡…‘’ƒ›ǡ„—–‹–
‹•‘–ƒ”‡˜‡—‡’”‘ˆ‹–ǡ‹–‹•–”‡ƒ–‡†ƒ•ƒ’‹–ƒŽ”‘ˆ‹–ǡ™Š‹…Š…ƒ„‡—–‹Ž‹œ‡†‘Ž›ˆ‘”–Š‡ˆ‘ŽŽ‘™‹‰
’—”’‘•‡•ǣ
o ••—‡‘ˆˆ—ŽŽ›’ƒ‹†„‘—••Šƒ”‡•–‘–Š‡‡š‹•–‹‰•Šƒ”‡Š‘Ž†‡”•Ǥ
o ”‹–‹‰‘ˆˆ–Š‡’”‡Ž‹‹ƒ”›‡š’‡•‡•‘ˆ–Š‡…‘’ƒ›Ǥ
o ”‹–‹‰‘ˆˆ–Š‡‡š’‡•‡•‘ˆ‹••—‡‘”–Š‡…‘‹••‹‘’ƒ‹†‘”†‹•…‘—–ƒŽŽ‘™‡†‘ƒ›‹••—‡‘ˆ
•Šƒ”‡•Ȁ†‡„‡–—”‡•Ǥ
o ”‘˜‹†‹‰ –Š‡ ’”‡‹— ’ƒ›ƒ„Ž‡ ‘ ”‡†‡’–‹‘ ‘ˆ ’”‡ˆ‡”‡…‡ •Šƒ”‡• ‘” †‡„‡–—”‡•Ǥ Š‡
…‘’ƒ› …ƒ —–‹Ž‹œ‡ –Š‡ •‡…—”‹–› ”‡‹— ˆ‘” ƒ› ‘–Š‡” ’—”’‘•‡ ‘Ž› ‘ ‘„–ƒ‹‹‰ –Š‡
•ƒ…–‹‘‘ˆ–Š‡…‘—”–Ǥ
Issue of shares at a discount
Š‡…‘’ƒ‹‡•…ƒ‹••—‡–Š‡•Šƒ”‡•ƒ–ƒ†‹•…‘—–•—„Œ‡…––‘–Š‡ˆ‘ŽŽ‘™‹‰…‘†‹–‹‘•ǣ
A. Š‡‹••—‡—•–„‡‘ˆƒ…Žƒ••‘ˆ•Šƒ”‡•ƒŽ”‡ƒ†›‹••—‡†Ǥ
B. ‘–Ž‡••–Šƒͳ›‡ƒ”Šƒ•ƒ––Š‡†ƒ–‡‘ˆ‹••—‡‡Žƒ’•‡†•‹…‡–Š‡†ƒ–‡‘™Š‹…Š–Š‡…‘’ƒ›
„‡…ƒ‡‡–‹–Ž‡†–‘…‘‡…‡„—•‹ness.
C. Š‡‹••—‡ƒ–ƒ†‹•…‘—–‹•ƒ—–Š‘”‹œ‡†„›ƒ”‡•‘Ž—–‹‘’ƒ••‡†„›–Š‡…‘’ƒ›‹–Š‡‰‡‡”ƒŽ
‡‡–‹‰Ƭ•ƒ…–‹‘‡†„›–Š‡…‘’ƒ›Žƒ™„‘ƒ”†Ǥ
D. Š‡ƒš‹—”ƒ–‡‘ˆ†‹•…‘—–—•–‘–‡š…‡‡†ͳͲΨ‘”•—…Š”ƒ–‡ƒ•–Š‡…‘’ƒ›Žƒ™„‘ƒ”†
ƒ›’‡”‹–Ǥ
E. Š‡•Šƒ”‡•–‘„‡‹••—‡†ƒ–ƒ†‹•…‘—–—•–„‡‹••—‡†™‹–Š‹–™‘‘–Š•‘ˆ–Š‡•ƒ…–‹‘„›
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142
–Š‡…‘’ƒ›Žƒ™„‘ƒ”†‘”™‹–Š‹•—…Š‡š–‡†‡†–‹‡ƒ•–Š‡…‘’ƒ›Žƒ™„‘ƒ”†ƒ›ƒŽŽ‘™

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

11|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

IPO
Š‡ƒ—Ž‹•–‡†…‘’ƒ›ƒ‡•‡‹–Š‡”ƒˆ”‡•Š‹••—‡‘ˆ•‡…—”‹–‹‡•‘”ƒ‘ˆˆ‡”ˆ‘”•ƒŽ‡‘ˆ‹–•‡š‹•–‹‰
•‡…—”‹–‹‡•‘”„‘–Šˆ‘”–Š‡ˆ‹”•––‹‡–‘–Š‡’—„Ž‹…ǡ‹–‹•…ƒŽŽ‡†‹–‹ƒŽ—„Ž‹…ˆˆ‡”‹‰‘”Ǥ
’ƒ˜‡•™ƒ›ˆ‘”Ž‹•–‹‰ƒ†–”ƒ†‹‰‘ˆ–Š‡‹••—‡”ǯ••‡…—”‹–‹‡•Ǥ
Pricing of IPO
Š‡ ƒ …‘’ƒ› ƒ‡• ƒ ǡ –Š‡ ’”‹‘” ”‡“—‹”‡‡– ™‘—Ž† „‡ –‘ †‡…‹†‡ ƒ ’”‹…‡ ‘ˆ –Š‡ ••—‡ Ȁ
•Šƒ”‡ǤŠ‡“—‡•–‹‘‹•-™Š‘™‹ŽŽ†‡…‹†‡™Šƒ–•Š‘—Ž†„‡–Š‡’”‹…‡ǫ†‹ƒǡ–Š‡”‡‹•ƒ•›•–‡‘ˆˆ”‡‡
pricing•‹…‡ͳͻͻʹǤ‘™‡˜‡”ǡ–Š‡”‡ƒ”‡‰—‹†‡Ž‹‡•–Šƒ––Š‡…‘’ƒ›ȋ••—‡”Ȍ™‹ŽŽ†‡…‹†‡–Š‡’”‹…‡
‹ …‘•—Ž–ƒ–‹‘ ™‹–Š ‡”…Šƒ– ƒ‡”Ǥ –‹ŽŽ –Š‡”‡ ‹• ‘ ˆ‘”—Žƒ ˆ‘” †‡…‹†‹‰ –Š‡ ’”‹…‡ ‘ˆ ƒ Ǥ
Ž‡ƒ•‡ ‘–‡ –Šƒ–  †‘‡• ‘– ’Žƒ› ƒ› ”‘Ž‡ ‘ ’”‹…‹‰ ‘ˆ •Šƒ”‡•ǡ „—– –Š‡ …‘’ƒ› ƒ† ‡”…Šƒ–
„ƒ‡” ƒ”‡ ”‡“—‹”‡† –‘ ‰‹˜‡ ˆ—ŽŽ †‹•…Ž‘•—”‡• ‘ˆ –Š‡ ’ƒ”ƒ‡–‡”• ™Š‹…Š –Š‡› Šƒ† …‘•‹†‡”‡† ™Š‹Ž‡
†‡…‹†‹‰–Š‡‹••—‡’”‹…‡ǤŠ‹Ž‡†‡…‹†‹‰–Š‡’”‹…‡•ǡ–Š‡”‡ƒ”‡–™‘’‘••‹„‹Ž‹–‹‡•ǡ
o Š‡”‡…‘’ƒ›ƒ†‡ƒ†‡”…Šƒ–ƒ‡”ˆ‹šƒ’”‹…‡ǤŠ‹•‹•…ƒŽŽ‡† ‹š‡†”‹…‡Ǥ
o Š‡”‡–Š‡…‘’ƒ›ƒ†–Š‡‡ƒ†ƒƒ‰‡”ȋȌ•–‹’—Žƒ–‡ƒˆŽ‘‘”’”‹…‡‘”ƒ’”‹…‡„ƒ†ƒ†
Ž‡ƒ˜‡ ‹– –‘ ƒ”‡– ˆ‘”…‡• –‘ †‡–‡”‹‡ –Š‡ ˆ‹ƒŽ ’”‹…‡Ǥ Š‹• ‹• …ƒŽŽ‡† –Š‡ ”‹…‡ †‹•…‘˜‡”›
–Š”‘—‰Š„‘‘„—‹Ž†‹‰’”‘…‡••Ǥ
Book Building
‘‘ —‹Ž†‹‰ ‹• „ƒ•‹…ƒŽŽ› ƒ ’”‘…‡•• —•‡† ‹ • ˆ‘” ‡ˆˆ‹…‹‡– ’”‹…‡ †‹•…‘˜‡”›Ǥ – ‹• ƒ ‡…Šƒ‹•
™Š‡”‡ǡ †—”‹‰ –Š‡ ’‡”‹‘† ˆ‘” ™Š‹…Š –Š‡  ‹• ‘’‡ǡ „‹†• ƒ”‡ …‘ŽŽ‡…–‡† ˆ”‘ ‹˜‡•–‘”• ƒ– ˜ƒ”‹‘—•
’”‹…‡•ǡ ™Š‹…Š ƒ”‡ ƒ„‘˜‡ ‘” ‡“—ƒŽ –‘ –Š‡ ˆŽ‘‘” ’”‹…‡Ǥ Š‡ ‘ˆˆ‡” ’”‹…‡ ‹• †‡–‡”‹‡† ƒˆ–‡” –Š‡ „‹†
…Ž‘•‹‰†ƒ–‡Ǥ
Ž‡ƒ•‡‘–‡–Šƒ–‹‘—”…‘—–”›ǡ–Š‡”‹…‡†‹•…‘˜‡”›–Š”‘—‰Š„‘‘„—‹Ž†‹‰’”‘…‡••‹•‘”‡’‘’—Žƒ”
–Šƒƒ‘”ƒŽ‹••—‡Ǥ–Š‡…ƒ•‡‘ˆ”‹…‡†‹•…‘˜‡”›–Š”‘—‰Š„‘‘„—‹Ž†‹‰’”‘…‡••ǡ–Š‡’”‹…‡ƒ–™Š‹…Š
•‡…—”‹–‹‡•™‹ŽŽ„‡ƒŽŽ‘––‡†‹•‘–‘™ǡ™Š‹Ž‡‹…ƒ•‡‘ˆ‘ˆˆ‡”‘ˆ•Šƒ”‡•–Š”‘—‰Š‘”ƒŽ’—„Ž‹…‹••—‡ǡ
’”‹…‡ ‹• ‘™ ‹ ƒ†˜ƒ…‡ –‘ ‹˜‡•–‘”Ǥ †‡” ‘‘ —‹Ž†‹‰ǡ ‹˜‡•–‘”• „‹† ˆ‘” •Šƒ”‡• ƒ– –Š‡ ˆŽ‘‘”
’”‹…‡ ‘” ƒ„‘˜‡ ƒ† ƒˆ–‡” –Š‡ …Ž‘•—”‡ ‘ˆ –Š‡ „‘‘ „—‹Ž†‹‰ ’”‘…‡•• –Š‡ ’”‹…‡ ‹• †‡–‡”‹‡† ˆ‘”
ƒŽŽ‘–‡–‘ˆ•Šƒ”‡•Ǥ
Prospectus
Mƒ›…‘’ƒ‹‡•ˆŽ‘ƒ–’—„Ž‹…‹••—‡•‹ƒ”‡–‡˜‡”›†ƒ›ǤŠ‡›ƒŽ•‘ƒ†˜‡”–‹•‡–Š‡ƒ†‘ˆ–‡™Š‡
™‡”‡ƒ†•—…Šƒ†˜‡”–‹•‡‡–•™‡…‘‡ƒ…”‘•••—…ŠŽ‹‡•’”‹–‡†‹•ƒŽŽˆ‘–Ǥ
Ž‡ƒ•‡”‡ƒ†–Š‡’”‘•’‡…–—•…ƒ”‡ˆ—ŽŽ›’”‹‘”–‘‹˜‡•–‹‰Ǥ

Š‹Ž‡‘•–‘ˆ–Š‡…‘’ƒ‹‡•ƒ”‡‰‡—‹‡ǡ–Š‡”‡ƒ”‡ƒŽ•‘ˆ‡™™Š‘ƒ›™ƒ––‘‡š’Ž‘‹––Š‡‹˜‡•–‘”•Ǥ
Š‡”‡ˆ‘”‡ǡ‹–‹•˜‡”›‹’‘”–ƒ––Šƒ–ƒ‹˜‡•–‘”„‡ˆ‘”‡ƒ’’Ž›‹‰ˆ‘”ƒ›‹••—‡–‘Œ—†‰‡ƒ†‹†‡–‹ˆ›
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

–Š‡ ˆ—–—”‡ ’‘–‡–‹ƒŽ ‘ˆ ƒ …‘’ƒ›Ǥ  ‰—‹†‡Ž‹‡• •–‹’—Žƒ–‡ –Šƒ– –Š‡ …‘’ƒ› —•– ’”‘˜‹†‡
"†‹•…Ž‘•—”‡‘ˆ‹ˆ‘”ƒ–‹‘–‘–Š‡’—„Ž‹…̶ǤŠ‹•†‹•…Ž‘•—”‡™‘—Ž†‹…Ž—†‡–Š‡‹ˆ‘”ƒ–‹‘•—…Šƒ•
™Šƒ–‹•–Š‡”‡ƒ•‘ˆ‘””ƒ‹•‹‰‘‡›ǡŠ‘™–Š‹•‘‡›™‹ŽŽ„‡•’‡–ǡ™Šƒ–ƒ”‡’‘••‹„Ž‡”‡–—”•‘
‡š’‡…–‡†‘‡›ǤŽŽ–Š‹•…‘–ƒ‹‡†‹ƒ†‘…—‡–™Š‹…Š‹•…ƒŽŽ‡†̶”‘•’‡…–—•̶Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

12|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

’ƒ”–ˆ”‘–Š‡ƒ„‘˜‡ǡ–Š‡”‘•’‡…–—•™‘—Ž†ƒŽ•‘…‘˜‡”‹ˆ‘”ƒ–‹‘”‡‰ƒ”†‹‰–Š‡•‹œ‡‘ˆ–Š‡‹••—‡ǡ
–Š‡ …—””‡– •–ƒ–—• ‘ˆ –Š‡ …‘’ƒ›ǡ ‹–• ‡“—‹–› …ƒ’‹–ƒŽǡ ‹–• …—””‡– ƒ† ’ƒ•– ’‡”ˆ‘”ƒ…‡ǡ –Š‡
’”‘‘–‡”•ǡ –Š‡ ’”‘Œ‡…–ǡ …‘•– ‘ˆ –Š‡ ’”‘Œ‡…–ǡ ‡ƒ• ‘ˆ ˆ‹ƒ…‹‰ǡ ’”‘†—…– ƒ† …ƒ’ƒ…‹–› ‡–…Ǥ – ƒŽ•‘
…‘–ƒ‹•Ž‘–‘ˆƒ†ƒ–‘”›‹ˆ‘”ƒ–‹‘”‡‰ƒ”†‹‰—†‡”™”‹–‹‰ƒ†•–ƒ–—–‘”›…‘’Ž‹ƒ…‡•ǤŠ‡•‘Ž‡
‘„Œ‡…–‹˜‡‘ˆ–Š‡”‘•’‡…–—•‹•–‘’”‘˜‹†‡‹˜‡•–‘”•ƒ‘’’‘”–—‹–›–‘‡˜ƒŽ—ƒ–‡•Š‘”––‡”ƒ†Ž‘‰
–‡”’”‘•’‡…–•‘ˆ–Š‡…‘’ƒ›Ǥ
Draft Offer Document
‘™ǡ™‡—†‡”•–ƒ†–Šƒ–”‘•’‡…–—•‰‹˜‡•‹ˆ‘”ƒ–‹‘–‘–Š‡’—„Ž‹…ƒ„‘—––Š‡’‘–‡–‹ƒŽ‘ˆƒ
ƒ†‹–•‹••—‡”…‘’ƒ›Ǥ—–™Šƒ–‹ˆ–Š‡…‘’ƒ›•Š‘™•–Š‡’‡‘’Ž‡ƒ”‘•›’‹…–—”‡‹‹–•’”‘•’‡…–—•ǫ
–‹•‘–’‘••‹„Ž‡ǡ„‡…ƒ—•‡„‡ˆ‘”‡ƒ’”‘•’‡…–—•‹•ƒ˜ƒ‹Žƒ„Ž‡–‘–Š‡‰‡‡”ƒŽ’—„Ž‹…ǡ–Š‡…‘’ƒ›Šƒ•–‘
ƒ‡ ƒ ̶ˆˆ‡” †‘…—‡–ǯ ǡ ™Š‹…Š ‹• ƒ ̶”‘•’‡…–—•̶ ‹ …ƒ•‡ ‘ˆ ƒ ’—„Ž‹… ‹••—‡ ‘” ‘ˆˆ‡” ˆ‘” •ƒŽ‡ ƒ†
̶‡––‡”‘ˆˆˆ‡”̶‹…ƒ•‡‘ˆƒ”‹‰Š–•‹••—‡™Š‹…Š‹•ˆ‹Ž‡†™‹–Š–Š‡‡‰‹•–”ƒ”‘ˆ‘’ƒ‹‡•ȋȌƒ†
–‘…š…Šƒ‰‡•ȋ•ȌǤ‘ˆˆ‡”†‘…—‡–‹•–Š—•ƒ̶”ƒˆ–”‘•’‡…–—•̶ǡ™Š‹…Š…‘˜‡”•ƒŽŽ–Š‡”‡Ž‡˜ƒ–
‹ˆ‘”ƒ–‹‘–‘Š‡Ž’ƒ‹˜‡•–‘”–‘ƒ‡Š‹•ȀŠ‡”‹˜‡•–‡–†‡…‹•‹‘ǤŠ‡†”ƒˆ–‘ˆˆ‡”†‘…—‡–•ƒ”‡
ˆ‹Ž‡†™‹–Šǡƒ–Ž‡ƒ•–͵Ͳ †ƒ›•’”‹‘”–‘–Š‡”‡‰‹•–”ƒ–‹‘‘ˆ ‡†‡””‹‰ ”‘•’‡…–—•Ǥ‹…‡‹–ǯ•ƒ
†”ƒˆ–ǡ  ƒ› •’‡…‹ˆ› …Šƒ‰‡•ǡ ‹ˆ ƒ›ǡ ‹ –Š‡ †”ƒˆ– ˆˆ‡” ‘…—‡– ƒ† –Š‡ ‹••—‡” ‘” –Š‡ Ž‡ƒ†
‡”…Šƒ– „ƒ‡” •ŠƒŽŽ …ƒ””› ‘—– •—…Š …Šƒ‰‡• ‹ –Š‡ †”ƒˆ– ‘ˆˆ‡” †‘…—‡– „‡ˆ‘”‡ ˆ‹Ž‹‰ –Š‡ ˆˆ‡”
‘…—‡– ™‹–Š Ǥ Š‡ ”ƒˆ– ˆˆ‡” ‘…—‡– ‹• ƒ†‡ ƒ˜ƒ‹Žƒ„Ž‡ ‘ –Š‡  ™‡„•‹–‡ ˆ‘” ’—„Ž‹…
…‘‡–•ˆ‘”ƒ’‡”‹‘†‘ˆʹͳ†ƒ›•ˆ”‘–Š‡ˆ‹Ž‹‰‘ˆ–Š‡”ƒˆ–ˆˆ‡”‘…—‡–™‹–ŠǤ
Draft Red Herring Prospectus
…‘’ƒ›ƒ‹‰ƒ’—„Ž‹…‹••—‡‘ˆ•‡…—”‹–‹‡•Šƒ•–‘ˆ‹Ž‡ƒ”ƒˆ–‡†‡””‹‰”‘•’‡…–—•ȋȌ
™‹–Š…ƒ’‹–ƒŽƒ”‡–”‡‰—Žƒ–‘”‡…—”‹–‹‡•ƒ†š…Šƒ‰‡‘ƒ”†‘ˆ†‹ƒǡ‘”ǡ–Š”‘—‰Šƒ‡Ž‹‰‹„Ž‡
‡”…Šƒ– „ƒ‡” ’”‹‘” –‘ –Š‡ ˆ‹Ž‹‰ ‘ˆ ’”‘•’‡…–—• ™‹–Š –Š‡ ‡‰‹•–”ƒ” ‘ˆ ‘’ƒ‹‡• ȋ‘•ȌǤ Š‡
‹••—‡”…‘’ƒ›‡‰ƒ‰‡•ƒ‡„‹”‡‰‹•–‡”‡†‡”…Šƒ–„ƒ‡”–‘’”‡’ƒ”‡–Š‡‘ˆˆ‡”†‘…—‡–Ǥ‡•‹†‡•
†—‡†‹Ž‹‰‡…‡‹’”‡’ƒ”‹‰–Š‡‘ˆˆ‡”†‘…—‡–ǡ–Š‡‡”…Šƒ–„ƒ‡”‹•ƒŽ•‘”‡•’‘•‹„Ž‡ˆ‘”‡•—”‹‰
Ž‡‰ƒŽ…‘’Ž‹ƒ…‡ǤŠ‡‡”…Šƒ–„ƒ‡”ˆƒ…‹Ž‹–ƒ–‡•–Š‡‹••—‡‹”‡ƒ…Š‹‰–Š‡’”‘•’‡…–‹˜‡‹˜‡•–‘”•„›
ƒ”‡–‹‰–Š‡•ƒ‡Ǥ
Š‡‘ˆˆ‡”†‘…—‡–•‘ˆ’—„Ž‹…‹••—‡•ƒ”‡ƒ˜ƒ‹Žƒ„Ž‡‘–Š‡™‡„•‹–‡•‘ˆ‡”…Šƒ–„ƒ‡”•ƒ†•–‘…
‡š…Šƒ‰‡•Ǥ–‹•ƒŽ•‘ƒ˜ƒ‹Žƒ„Ž‡‘–Š‡™‡„•‹–‡—†‡”ǯˆˆ‡”‘…—‡–•ǯ•‡…–‹‘ƒŽ‘‰™‹–Š‹–•
•–ƒ–—•‘ˆ’”‘…‡••‹‰ǤŠ‡…‘’ƒ›‹•ƒŽ•‘”‡“—‹”‡†–‘ƒ‡ƒ’—„Ž‹…ƒ‘—…‡‡–ƒ„‘—––Š‡ˆ‹Ž‹‰
‹‰Ž‹•Šǡ‹†‹ƒ†‹”‡‰‹‘ƒŽŽƒ‰—ƒ‰‡‡™•’ƒ’‡”•Ǥ…ƒ•‡ǡ‹˜‡•–‘”•‘–‹…‡ƒ›‹ƒ……—”ƒ–‡‘”
incomplet‡ ‹ˆ‘”ƒ–‹‘ ‹ –Š‡ ‘ˆˆ‡” †‘…—‡–ǡ –Š‡› ƒ› •‡† –Š‡‹” …‘’Žƒ‹– –‘ –Š‡ ‡”…Šƒ–
„ƒ‡”ƒ†Ȁ‘”–‘Ǥ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

What SEBI does with DRHP?

Š‡ †‹ƒ ”‡‰—Žƒ–‘”› ˆ”ƒ‡™‘” ‹• „ƒ•‡† ‘ ƒ †‹•…Ž‘•—”‡ ”‡‰‹‡Ǥ  ”‡˜‹‡™• –Š‡ †”ƒˆ– ‘ˆˆ‡”
†‘…—‡–ƒ†ƒ›‹••—‡‘„•‡”˜ƒ–‹‘•™‹–Šƒ˜‹‡™–‘‡•—”‡–Šƒ–ƒ†‡“—ƒ–‡†‹•…Ž‘•—”‡•ƒ”‡ƒ†‡„›
–Š‡ ‹••—‡” …‘’ƒ›Ȁ‡”…Šƒ– „ƒ‡”• ‹ –Š‡ ‘ˆˆ‡” †‘…—‡– –‘ ‡ƒ„Ž‡ ‹˜‡•–‘”• –‘ ƒ‡ ƒ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

13|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

‹ˆ‘”‡† ‹˜‡•–‡– †‡…‹•‹‘ ‹ –Š‡ ‹••—‡Ǥ – —•– „‡ …Ž‡ƒ”Ž› —†‡”•–‘‘† –Šƒ–  †‘‡• ‘– Ǯ˜‡–ǯ
ƒ† Ǯƒ’’”‘˜‡ǯ –Š‡ ‘ˆˆ‡” †‘…—‡–Ǥ Ž•‘ǡ  †‘‡• ‘– ”‡…‘‡† –Š‡ •Šƒ”‡• ‘” ‰—ƒ”ƒ–‡‡ –Š‡
ƒ……—”ƒ…›‘”ƒ†‡“—ƒ…›‘ˆǤǯ‘„•‡”˜ƒ–‹‘•‘–Š‡†”ƒˆ–‘ˆˆ‡”†‘…—‡–ƒ”‡ˆ‘”™ƒ”†‡†–‘
–Š‡ ‡”…Šƒ– „ƒ‡”ǡ ™Š‘ ‹…‘”’‘”ƒ–‡• –Š‡ ‡…‡••ƒ”› …Šƒ‰‡• ƒ† ˆ‹Ž‡• –Š‡ ˆ‹ƒŽ ‘ˆˆ‡” †‘…—‡–
™‹–Š ‡„‹ǡ ‡‰‹•–”ƒ” ‘ˆ ‘’ƒ‹‡• ȋȌ ƒ† •–‘… ‡š…Šƒ‰‡•Ǥ ˆ–‡” ”‡˜‹‡™‹‰ –Š‡ ǡ –Š‡
ƒ”‡–”‡‰—Žƒ–‘”‰‹˜‡•‹–•‘„•‡”˜ƒ–‹‘•™Š‹…Š‡‡†–‘„‡‹’Ž‡‡–‡†„›–Š‡…‘’ƒ›Ǥ…‡–Š‡
‘„•‡”˜ƒ–‹‘• ƒ”‡ ‹’Ž‡‡–‡†ǡ ‹– ‰‡–• ˆ‹ƒŽ ƒ’’”‘˜ƒŽ Ƭ –Š‡ †‘…—‡– –Š‡ „‡…‘‡•  ȋ‡†
‡””‹‰”‘•’‡…–—•ȌǤ
Follow on Public Offer
”‡ˆ‡”•–‘ˆ‘ŽŽ‘™‘’—„Ž‹…‘ˆˆ‡”‹‰Ǥ–‹•ƒŽ•‘‘™ƒ• —”–Š‡”••—‡Ǥ —”–Š‡”••—‡‹••™Š‡
ƒƒŽ”‡ƒ†›Ž‹•–‡†…‘’ƒ›ƒ‡•‡‹–Š‡”ƒˆ”‡•Š‹••—‡‘ˆ•‡…—”‹–‹‡•–‘–Š‡’—„Ž‹…‘”ƒ‘ˆˆ‡”ˆ‘”•ƒŽ‡
–‘–Š‡’—„Ž‹…ǡ–Š”‘—‰Šƒ‘ˆˆ‡”†‘…—‡–Ǥ
Issue Price & Market Price
Š‡’”‹…‡ƒ–™Š‹…Šƒ…‘’ƒ›̵••Šƒ”‡•ƒ”‡‘ˆˆ‡”‡†‹‹–‹ƒŽŽ›‹–Š‡’”‹ƒ”›ƒ”‡–‹•…ƒŽŽ‡†ƒ•–Š‡
••—‡’”‹…‡ǤŠ‡–Š‡›„‡‰‹–‘„‡–”ƒ†‡†ǡ–Š‡ƒ”‡–’”‹…‡ƒ›„‡ƒ„‘˜‡‘”„‡Ž‘™–Š‡‹••—‡’”‹…‡Ǥ
Market Capitalization
Š‡ƒ”‡–˜ƒŽ—‡‘ˆƒ“—‘–‡†…‘’ƒ›ǡ™Š‹…Š‹•…ƒŽ…—Žƒ–‡†„›—Ž–‹’Ž›‹‰‹–•…—””‡–•Šƒ”‡’”‹…‡
ȋƒ”‡–’”‹…‡Ȍ„›–Š‡—„‡”‘ˆ•Šƒ”‡•‹‹••—‡ǡ‹•…ƒŽŽ‡†ƒ•ƒ”‡–…ƒ’‹–ƒŽ‹œƒ–‹‘Ǥ ‘”‡šƒ’Ž‡ǡ‹ˆƒ
…‘’ƒ›  Šƒ• ͳͷͲ ‹ŽŽ‹‘ •Šƒ”‡• ‹ ‹••—‡ ƒ† …—””‡– ƒ”‡– ’”‹…‡ ‹• •Ǥ ͳͲͲǤ Š‡ ƒ”‡–
…ƒ’‹–ƒŽ‹•ƒ–‹‘‘ˆ…‘’ƒ›‹••ǤͳͷͲͲͲ‹ŽŽ‹‘Ǥ
‘Listing & Delisting of Securities"
‹•–‹‰ ‡ƒ• ƒ†‹••‹‘ ‘ˆ •‡…—”‹–‹‡• ‘ˆ ƒ ‹••—‡” –‘ –”ƒ†‹‰ ’”‹˜‹Ž‡‰‡• ȋ†‡ƒŽ‹‰•Ȍ ‘ ƒ •–‘…
‡š…Šƒ‰‡ –Š”‘—‰Š ƒ ˆ‘”ƒŽ ƒ‰”‡‡‡–Ǥ Š‡ ’”‹‡ ‘„Œ‡…–‹˜‡ ‘ˆ ƒ†‹••‹‘ –‘ †‡ƒŽ‹‰• ‘ –Š‡
‡š…Šƒ‰‡‹•–‘’”‘˜‹†‡Ž‹“—‹†‹–›ƒ†ƒ”‡–ƒ„‹Ž‹–›–‘•‡…—”‹–‹‡•ǡƒ•ƒŽ•‘–‘’”‘˜‹†‡ƒ‡…Šƒ‹•ˆ‘”
‡ˆˆ‡…–‹˜‡ …‘–”‘Ž ƒ† •—’‡”˜‹•‹‘ ‘ˆ –”ƒ†‹‰Ǥ Š‡ –‡” Ǯ‡Ž‹•–‹‰ ‘ˆ •‡…—”‹–‹‡•ǯ ‡ƒ• ’‡”ƒ‡–
”‡‘˜ƒŽ‘ˆ•‡…—”‹–‹‡•‘ˆƒŽ‹•–‡†…‘’ƒ›ˆ”‘ƒ•–‘…‡š…Šƒ‰‡Ǥ•ƒ…‘•‡“—‡…‡‘ˆ†‡Ž‹•–‹‰ǡ–Š‡
•‡…—”‹–‹‡•‘ˆ–Šƒ–…‘’ƒ›™‘—Ž†‘Ž‘‰‡”„‡–”ƒ†‡†ƒ––Šƒ–•–‘…‡š…Šƒ‰‡Ǥ
Voting Rights & Differential Voting Rights (DVR)
Ž‡ƒ•‡‘–‡–Šƒ––Š‡‘™‡”•‘ˆ‡“—‹–›•Šƒ”‡•Šƒ˜‡–Š‡˜‘–‹‰”‹‰Š–•‹–Š‡ƒ—ƒŽ‰‡‡”ƒŽ‡‡–‹‰•
‘ˆ –Š‡ …‘’ƒ›Ǥ ”ƒ†‹–‹‘ƒŽŽ›ǡ ˜‘–‹‰ ”‹‰Š– ™ƒ• Ž‹‡ —‹˜‡”•ƒŽ •—ˆˆ”ƒ‰‡ •—…Š ƒ• ‘™‡”•Š‹’ ‘ˆ ‘‡
•Šƒ”‡ …‘ˆ‡””‡† ‘‡ ˜‘–‡Ǥ  ‘–‹‰ ”‹‰Š–• ‘ˆ ƒ ’‡”•‘ ‹ ƒ …‘’ƒ› ™‡”‡ ‡“—ƒŽ –‘ •Šƒ”‡• ‘™‡†Ǥ
‘™‡˜‡”ǡ…‘…‡’–‘ˆ•Šƒ”‡•™‹–Š†‹ˆˆ‡”‡–‹ƒŽ”‹‰Š–•™ƒ•‹–”‘†—…‡†„›–Š‡‘’ƒ‹‡•ȋ‡†‡–Ȍ
…–ʹͲͲͲǤ Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

‡…–‹‘ ͺ͸ ‘ˆ –Š‡ …– ™ƒ• ƒ‡†‡† –‘ ƒ‡ ƒ ’”‘˜‹•‹‘ –‘ ‹••—‡ †‹ˆˆ‡”‡–‹ƒŽ •Šƒ”‡• „› †‹ƒ
…‘’ƒ‹‡•ǤŠ‡•‡•Šƒ”‡•ƒ”‡‡š’‡…–‡†–‘„‡‡ˆ‹––Š‡‹˜‡•–‘”•ƒ•™‡ŽŽƒ•…‘”’‘”ƒ–‡•Ǥ•’‡”•‡…–‹‘
ͺ͸ǡ‡“—‹–›•Šƒ”‡•™‹–Š†‹ˆˆ‡”‡–‹ƒŽ”‹‰Š–•ƒ•–‘†‹˜‹†‡†ǡ˜‘–‹‰‘”‘–Š‡”™‹•‡…ƒ„‡‹••—‡†Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

14|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

•Šƒ”‡‹•Ž‹‡ƒ‘”†‹ƒ”›‡“—‹–›•Šƒ”‡ǡ„—–‹–’”‘˜‹†‡•ˆ‡™‡”˜‘–‹‰”‹‰Š–•–‘–Š‡•Šƒ”‡Š‘Ž†‡”Ǥ
Š‡‘„Œ‡…–‹˜‡‘ˆ‹••—‹‰•Šƒ”‡•‹•ˆ‘”’”‡˜‡–‹‘‘ˆƒŠ‘•–‹Ž‡–ƒ‡‘˜‡”ƒ††‹Ž—–‹‘‘ˆ˜‘–‹‰”‹‰Š–•Ǥ
– ƒŽ•‘ Š‡Ž’• •–”ƒ–‡‰‹… ‹˜‡•–‘”• ™Š‘ †‘ ‘– ™ƒ– …‘–”‘Žǡ „—– ƒ”‡ Ž‘‘‹‰ ƒ– ƒ ”‡ƒ•‘ƒ„Ž› „‹‰
i˜‡•–‡–‹ƒ…‘’ƒ›Ǥ––‹‡•ǡ…‘’ƒ‹‡•‹••—‡•Šƒ”‡•–‘ˆ—†‡™Žƒ”‰‡’”‘Œ‡…–•ǡ†—‡–‘
ˆ‡™‡”˜‘–‹‰”‹‰Š–•ǡ‡˜‡ƒ„‹‰‹••—‡†‘‡•‘––”‹‰‰‡”ƒ‘’‡‘ˆˆ‡”Ǥ
Š‡ ‘’ƒ‹‡• …– ’‡”‹–• ƒ …‘’ƒ› –‘ ‹••—‡  •Šƒ”‡• ™Š‡ǡ ƒ‘‰ ‘–Š‡” …‘†‹–‹‘•ǡ –Š‡
…‘’ƒ›Šƒ•†‹•–”‹„—–ƒ„Ž‡’”‘ˆ‹–•ƒ†Šƒ•‘–†‡ˆƒ—Ž–‡†‹ˆ‹Ž‹‰ƒ—ƒŽƒ……‘—–•ƒ†”‡–—”•ˆ‘”ƒ–
Ž‡ƒ•––Š”‡‡ˆ‹ƒ…‹ƒŽ›‡ƒ”•Ǥ ‘™‡˜‡”ǡ–Š‡‹••—‡‘ˆ•—…Š•Šƒ”‡•…ƒ‘–‡š…‡‡†ʹͷ’‡”…‡–‘ˆ–Š‡–‘–ƒŽ
‹••—‡†•Šƒ”‡…ƒ’‹–ƒŽǤ
Denomination
’—„Ž‹…Ž‹‹–‡†…‘’ƒ›‹•ˆ”‡‡–‘ƒ‡”‹‰Š–‘”’—„Ž‹…‹••—‡‘ˆ‡“—‹–›•Šƒ”‡•‹ƒ›†‡‘‹ƒ–‹‘
†‡–‡”‹‡† „› ‹–Ǥ  – Šƒ• Š‘™‡˜‡” –‘ …‘’Ž› ™‹–Š  ”‡‰—Žƒ–‹‘• –Šƒ– •Šƒ”‡• •Š‘—Ž† ‘– „‡ ‘ˆ
†‡…‹ƒŽ‘ˆ”—’‡‡ƒ†ƒ–ƒ›’‘‹–‘ˆ–‹‡–Š‡”‡•ŠƒŽŽ„‡‘Ž›‘‡†‡‘‹ƒ–‹‘nǤ
Face Value
ƒ…‡ƒŽ—‡‹•–Š‡‘‹ƒŽ‘”•–ƒ–‡†ƒ‘—–ȋ‹•ǤȌƒ••‹‰‡†–‘ƒ•‡…—”‹–›„›–Š‡‹••—‡”Ǥ ‘”•Šƒ”‡•ǡ
‹–‹•–Š‡‘”‹‰‹ƒŽ…‘•–‘ˆ–Š‡•–‘…•Š‘™‘–Š‡…‡”–‹ˆ‹…ƒ–‡Ǣˆ‘”„‘†•ǡ‹–‹•–Š‡ƒ‘—–’ƒ‹†–‘–Š‡
Š‘Ž†‡”ƒ–ƒ–—”‹–›Ǥ ƒ…‡ƒŽ—‡‹•ƒŽ•‘‘™ƒ•–Š‡’ƒ”˜ƒŽ—‡‘”•‹’Ž›’ƒ”Ǥ ‘”ƒ‡“—‹–›•Šƒ”‡ǡ–Š‡
ˆƒ…‡ ˜ƒŽ—‡ ‹• —•—ƒŽŽ› ƒ ˜‡”› •ƒŽŽ ƒ‘—– ȋ•Ǥ ͷǡ •Ǥ ͳͲȌ ƒ† †‘‡• ‘– Šƒ˜‡ —…Š „‡ƒ”‹‰ ‘ –Š‡
’”‹…‡‘ˆ–Š‡•Šƒ”‡ǡ™Š‹…Šƒ›“—‘–‡Š‹‰Š‡”‹–Š‡ƒ”‡–ǡƒ–•ǤͳͲͲ‘”•ǤͳͲͲͲ‘”ƒ›‘–Š‡”’”‹…‡Ǥ
‘”ƒ†‡„–•‡…—”‹–›ǡˆƒ…‡˜ƒŽ—‡‹•–Š‡ƒ‘—–”‡’ƒ‹†–‘–Š‡‹˜‡•–‘”™Š‡–Š‡„‘†ƒ–—”‡•ȋ—•—ƒŽŽ›ǡ

‘˜‡”‡–•‡…—”‹–‹‡•ƒ†…‘”’‘”ƒ–‡„‘†•Šƒ˜‡ƒˆƒ…‡˜ƒŽ—‡‘ˆ•Ǥ ͳͲͲȌǤŠ‡’”‹…‡ƒ–™Š‹…Š–Š‡
•‡…—”‹–›–”ƒ†‡•†‡’‡†•‘–Š‡ˆŽ—…–—ƒ–‹‘•‹–Š‡‹–‡”‡•–”ƒ–‡•‹–Š‡‡…‘‘›Ǥ
Premium and Discount
‡…—”‹–‹‡•ƒ”‡‰‡‡”ƒŽŽ›‹••—‡†‹†‡‘‹ƒ–‹‘•‘ˆͷǡͳͲ‘”ͳͲͲǤŠ‹•‹•‘™ƒ•–Š‡ ƒ…‡ƒŽ—‡‘”
ƒ”ƒŽ—‡‘ˆ–Š‡•‡…—”‹–›ƒ•†‹•…—••‡†‡ƒ”Ž‹‡”ǤŠ‡ƒ•‡…—”‹–›‹••‘Ž†ƒ„‘˜‡‹–•ˆƒ…‡˜ƒŽ—‡ǡ‹–‹••ƒ‹†
–‘„‡‹••—‡†ƒ–ƒ”‡‹—ƒ†‹ˆ‹–‹••‘Ž†ƒ–Ž‡••–Šƒ‹–•ˆƒ…‡˜ƒŽ—‡ǡ–Š‡‹–‹••ƒ‹†–‘„‡‹••—‡†ƒ–ƒ
Discount.
Some Other Concepts
Forfeiture of shares
Š‡ •Šƒ”‡• ƒ”‡ ƒŽŽ‘––‡† –‘ ƒ ƒ’’Ž‹…ƒ–ǡ ‹– „‡…‘‡• ƒ …‘–”ƒ…– „‡–™‡‡ –Š‡ •Šƒ”‡Š‘Ž†‡” Ƭ –Š‡
…‘’ƒ›Ǥ Š‡ •Šƒ”‡Š‘Ž†‡” ‹• „‘—† –‘ …‘–”‹„—–‡ –‘ –Š‡ …ƒ’‹–ƒŽ ƒ† –Š‡ ’”‡‹— ‹ˆ ƒ› ‘ˆ –Š‡
…‘’ƒ›–‘–Š‡‡š–‡–‘ˆ–Š‡•Šƒ”‡•Š‡Šƒ•ƒ‰”‡‡†–‘–ƒ‡ƒ•Ƭ™Š‡–Š‡‹”‡…–‘”•ƒ‡–Š‡…ƒŽŽ•Ǥˆ
–Š‡ ˆƒ‹Ž• –‘ ’ƒ› –Š‡ …ƒŽŽ•
Member–Š‡ Š‹•
Name: sunil •Šƒ”‡•
kumar ƒ›
Member's Email „‡tripathisunilkumar21@gmail.com
address: ˆ‘”ˆ‡‹–—”‡ „› –Š‡ 120.56.225.142
†‹”‡…–‘”• ‹ˆ ƒ—–Š‘”‹•‡† „› –Š‡
”–‹…Ž‡• ‘ˆ ••‘…‹ƒ–‹‘ ‘ˆ –Š‡ …‘’ƒ›Ǥ Š‡ ‘”ˆ‡‹–—”‡ …ƒ „‡ ‘Ž› ˆ‘” ‘-’ƒ›‡– ‘ˆ …ƒŽŽ• ‘
•Šƒ”‡•ƒ†‘–ˆ‘”ƒ›‘–Š‡””‡ƒ•‘•Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

15|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Bonus Shares
”‘ˆ‹–ƒ‹‰…‘’ƒ‹‡•ƒ›†‡•‹”‡–‘…‘˜‡”––Š‡‹”’”‘ˆ‹–‹–‘•Šƒ”‡…ƒ’‹–ƒŽǤŠ‹•…ƒ„‡†‘‡„›
‹••—‡‘ˆ„‘—••Šƒ”‡•Ǥ••—‡‘ˆ‘—••Šƒ”‡•‹•ƒŽ•‘…ƒŽŽ‡†ƒ•…‘˜‡”•‹‘‘ˆ’”‘ˆ‹–‹–‘•Šƒ”‡…ƒ’‹–ƒŽ
‘”…ƒ’‹–ƒŽ‹•ƒ–‹‘‘ˆ’”‘ˆ‹–•Ǥ‘—•…ƒ„‡‘ˆ–™‘–›’‡•ǣ
o ƒ‹‰’ƒ”–Ž›’ƒ‹†•Šƒ”‡•‹–‘ˆ—ŽŽ›’ƒ‹†„›†‡…Žƒ”‹‰„‘—•™‹–Š‘—–”‡“—‹”‹‰•Šƒ”‡Š‘Ž†‡”•
–‘’ƒ›ˆ‘”–Š‡•ƒ‡Ǥ
o ••—‡‘ˆˆ—ŽŽ›’ƒ‹†‡“—‹–›•Šƒ”‡•ƒ•„‘—••Šƒ”‡•–‘–Š‡‡š‹•–‹‰‡“—‹–›•Šƒ”‡Š‘Ž†‡”•
Rights Shares
…‘’ƒ›…ƒ‹••—‡ƒ††‹–‹‘ƒŽ•Šƒ”‡•ƒ–ƒ›–‹‡„›’ƒ••‹‰ƒ‘”†‹ƒ”›”‡•‘Ž—–‹‘ƒ–‹–•
‡‡”ƒŽ
MeetingǤ‘™‡˜‡”•—…Šƒ††‹–‹‘ƒŽ•Šƒ”‡•—•–„‡ˆ‹”•–‘ˆˆ‡”‡†–‘–Š‡‡š‹•–‹‰‡“—‹–›•Šƒ”‡Š‘Ž†‡”•
‹ –Š‡ ’”‘’‘”–‹‘ ‘ˆ –Š‡ •Šƒ”‡• ƒŽ”‡ƒ†› Š‡Ž† „› –Š‡Ǥ —…Š ƒ††‹–‹‘ƒŽ •Šƒ”‡• ƒ”‡ …ƒŽŽ‡† Dz‹‰Š–•
Šƒ”‡•dzǤ ‹‰Š–• •Šƒ”‡• •Š‘—Ž† „‡ ™‹–Š‹ –Š‡ Ž‹‹–• ‘ˆ –Š‡ ƒ—–Š‘”‹œ‡† …ƒ’‹–ƒŽǤ ˆ ‘– •‘ǡ –Š‡ –Š‡
ƒ—–Š‘”‹œ‡†…ƒ’‹–ƒŽ—•–„‡‹…”‡ƒ•‡†ˆ‹”•–•—‹–ƒ„Ž›ǤŠ‡‹••—‡ ‘ˆ‹‰Š–•Šƒ”‡•‹•–‘„‡ƒ†‡ƒˆ–‡”
–™‘›‡ƒ”•ˆ”‘–Š‡ˆ‘”ƒ–‹‘‘ˆ–Š‡…‘’ƒ›‘”ƒˆ–‡”‘‡›‡ƒ”ˆ”‘–Š‡ˆ‹”•–ƒŽŽ‘–‡–‘ˆ•Šƒ”‡•Ǥ
Primary Market & Secondary Market
Š‡ ‡…Šƒ‹• „› ™Š‹…Š –Š‡ …‘’ƒ‹‡• ”ƒ‹•‡ …ƒ’‹–ƒŽ ˆ”‘ –Š‡ ‹••—‹‰ ‹ˆ –Š‡ •Šƒ”‡• ‹• …ƒŽŽ‡†
”‹ƒ”›ƒ”‡–ǤŠ—•ǡ”‹ƒ”›ƒ”‡–‹•ˆ‘””ƒ‹•‹‰–Š‡“—‹–›…ƒ’‹–ƒŽ‘”•Šƒ”‡…ƒ’‹–ƒŽǡ™Š‹…Š‹•–Š‡
‘™‡”•̹ ‹–‡”‡•– ‘ –Š‡ ƒ••‡–• ‘ˆ –Š‡ ‡–‡”’”‹•‡ ƒˆ–‡” †‡†—…–‹‰ ƒŽŽ ‹–• Ž‹ƒ„‹Ž‹–‹‡•Ǥ  – ƒ’’‡ƒ”• ‘ –Š‡
„ƒŽƒ…‡•Š‡‡–Ȁ•–ƒ–‡‡–‘ˆˆ‹ƒ…‹ƒŽ’‘•‹–‹‘‘ˆ–Š‡…‘’ƒ›Ǥ
Š‡–Š‡•Šƒ”‡Š‘Ž†‡”‡‡†•–Š‡‘‡›„ƒ…ǡŠ‡Ȁ•Š‡™‘—Ž†‘–•‡ŽŽ‹–„ƒ…–‘–Š‡…‘’ƒ›‡š…‡’–
‹ •‘‡ …ƒ•‡•ǡ ȋ•—…Š ƒ• „—›„ƒ… ‘ˆˆ‡”Ȍ „—– ™‘—Ž† •‡ŽŽ –Š‡ –‘ ‘–Š‡” ‡™ ‹˜‡•–‘”•Ǥ Š‡ –”ƒ†‡ ‘ˆ
•Šƒ”‡• †‘‡• ‘– ”‡†—…‡ ‘” ƒŽ–‡” –Š‡ …‘’ƒ›̹• …ƒ’‹–ƒŽǤ  Š‹• –”ƒ†‹‰ ‘ˆ •Šƒ”‡• ‹• ˆƒ…‹Ž‹–ƒ–‡† „› –Š‡
–‘… š…Šƒ‰‡•ǡ ™Š‹…Š „”‹‰ •—…Š •‡ŽŽ‡”• ƒ† „—›‡”• –‘‰‡–Š‡” ƒ† ˆƒ…‹Ž‹–ƒ–‡ –”ƒ†‹‰Ǥ Š‡”‡ˆ‘”‡ǡ
compani‡•”ƒ‹•‹‰‘‡›ˆ”‘’—„Ž‹…ƒ”‡”‡“—‹”‡†–‘Ž‹•––Š‡‹”•Šƒ”‡•‘–Š‡•–‘…‡š…Šƒ‰‡ǤŠ‹•
‡…Šƒ‹•‘ˆ„—›‹‰ƒ†•‡ŽŽ‹‰•Šƒ”‡•–Š”‘—‰Š•–‘…‡š…Šƒ‰‡‹•‘™ƒ•–Š‡•‡…‘†ƒ”›ƒ”‡–•Ǥ
Stock Exchanges & Stock Markets
–‘…‡š…Šƒ‰‡•ƒ”‡†‡ˆ‹‡†„›–Š‡‡…—”‹–‹‡•‘–”ƒ…–ȋ‡‰—Žƒ–‹‘Ȍ…–ǡͳͻͷ͸ȏȐǤ•’‡”–Š‹•
ƒ…–ǡƒ›„‘†›‘ˆ‹†‹˜‹†—ƒŽ•ǡ™Š‡–Š‡”‹…‘”’‘”ƒ–‡†‘”‘–ǡ…‘•–‹–—–‡†ˆ‘”–Š‡’—”’‘•‡‘ˆƒ••‹•–‹‰ǡ
”‡‰—Žƒ–‹‰ ‘” …‘–”‘ŽŽ‹‰ –Š‡ „—•‹‡•• ‘ˆ „—›‹‰ǡ •‡ŽŽ‹‰ ‘” †‡ƒŽ‹‰ ‹ •‡…—”‹–‹‡•ǡ ‹• …ƒŽŽ‡† –‘…
š…Šƒ‰‡Ǥ–‘…‡š…Šƒ‰‡ƒ›„‡ƒ”‡‰‹‘ƒŽ•–‘…‡š…Šƒ‰‡™Š‘•‡ƒ”‡ƒ‘ˆ‘’‡”ƒ–‹‘ȀŒ—”‹•†‹…–‹‘‹•
•’‡…‹ˆ‹‡† ƒ– –Š‡ –‹‡ ‘ˆ ‹–• ”‡…‘‰‹–‹‘ ‘” ƒ–‹‘ƒŽ ‡š…Šƒ‰‡•ǡ ™Š‹…Š ƒ”‡ ’‡”‹––‡† –‘ Šƒ˜‡
ƒ–‹‘™‹†‡ –”ƒ†‹‰ •‹…‡ ‹…‡’–‹‘Ǥ šƒ’Ž‡• ƒ”‡ ‡ŽŠ‹ –‘… š…Šƒ‰‡ ƒ† ƒ–‹‘ƒŽ –‘…
š…Šƒ‰‡”‡•’‡…–‹˜‡Ž›Ǥ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

Who owns the Stock Markets?

Ž‡ƒ•‡ ‘–‡ –Šƒ– „”‘‡” ‡„‡”• ‘ˆ –Š‡ ‡š…Šƒ‰‡ ƒ”‡ „‘–Š –Š‡ ‘™‡”• ƒ† –Š‡ –”ƒ†‡”• ‘ –Š‡
‡š…Šƒ‰‡ ƒ† –Š‡› ˆ—”–Š‡” ƒƒ‰‡ –Š‡ ‡š…Šƒ‰‡ ƒ• ™‡ŽŽǤ ‘™‡˜‡”ǡ –Š‡”‡ …ƒ „‡ –™‘ …ƒ•‡• ˜‹œǡ
—–—ƒŽ‹œ‡†ƒ††‡—–—ƒŽ‹œ‡†‡š…Šƒ‰‡•Ǥƒ—–—ƒŽ‡š…Šƒ‰‡ǡ–Š‡–Š”‡‡ˆ—…–‹‘•‘ˆ‘™‡”•Š‹’ǡ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

16|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

ƒƒ‰‡‡–ƒ†–”ƒ†‹‰ƒ”‡…‘…‡–”ƒ–‡†‹–‘ƒ•‹‰Ž‡
”‘—’ǤŠ‹•ƒ––‹‡•…ƒŽ‡ƒ†–‘…‘ˆŽ‹…–•‘ˆ
‹–‡”‡•– ‹ †‡…‹•‹‘ ƒ‹‰Ǥ  †‡—–—ƒŽ‹•‡† ‡š…Šƒ‰‡ǡ ‘ –Š‡ ‘–Š‡” Šƒ†ǡ Šƒ• ƒŽŽ –Š‡•‡ –Š”‡‡
ˆ—…–‹‘•…Ž‡ƒ”Ž›•‡‰”‡‰ƒ–‡†ǡ‹Ǥ‡Ǥ–Š‡‘™‡”•Š‹’ǡƒƒ‰‡‡–ƒ†–”ƒ†‹‰ƒ”‡‹•‡’ƒ”ƒ–‡Šƒ†•Ǥ
Factors that influence the price of a stock
ƒ…–‘”•–Šƒ–‹ˆŽ—‡…‡–Š‡’”‹…‡‘ˆƒ•–‘……ƒ„‡•–‘…•’‡…‹ˆ‹…‘”ƒ”‡–•’‡…‹ˆ‹…ǤŠ‡•–‘…-•’‡…‹ˆ‹…
ˆƒ…–‘”‹•”‡Žƒ–‡†–‘’‡‘’Ž‡ǯ•‡š’‡…–ƒ–‹‘•ƒ„‘—––Š‡…‘’ƒ›ǡ‹–•ˆ—–—”‡‡ƒ”‹‰•…ƒ’ƒ…‹–›ǡˆ‹ƒ…‹ƒŽ
Š‡ƒŽ–Š ƒ† ƒƒ‰‡‡–ǡ Ž‡˜‡Ž ‘ˆ –‡…Š‘Ž‘‰› ƒ† ƒ”‡–‹‰ •‹ŽŽ•Ǥ Š‡ ƒ”‡– •’‡…‹ˆ‹… ˆƒ…–‘” ‹•
‹ˆŽ—‡…‡†„›–Š‡‹˜‡•–‘”ǯ••‡–‹‡––‘™ƒ”†•–Š‡•–‘…ƒ”‡–ƒ•ƒ™Š‘Ž‡ǤŠ‹•ˆƒ…–‘”†‡’‡†•‘
–Š‡‡˜‹”‘‡–”ƒ–Š‡”–Šƒ–Š‡’‡”ˆ‘”ƒ…‡‘ˆƒ›’ƒ”–‹…—Žƒ”…‘’ƒ›Ǥ˜‡–•ˆƒ˜‘—”ƒ„Ž‡–‘ƒ
‡…‘‘›ǡ ’‘Ž‹–‹…ƒŽ ‘” ”‡‰—Žƒ–‘”› ‡˜‹”‘‡– Ž‹‡ Š‹‰Š ‡…‘‘‹… ‰”‘™–Šǡ ˆ”‹‡†Ž› „—†‰‡–ǡ •–ƒ„Ž‡
‰‘˜‡”‡–‡–…Ǥ…ƒˆ—‡Ž‡—’Š‘”‹ƒ‹–Š‡‹˜‡•–‘”•ǡ”‡•—Ž–‹‰‹ƒ„‘‘‹–Š‡ƒ”‡–Ǥ–Š‡‘–Š‡”
Šƒ†ǡ —ˆƒ˜‘—”ƒ„Ž‡ ‡˜‡–• Ž‹‡ ™ƒ”ǡ ‡…‘‘‹… …”‹•‹•ǡ …‘—ƒŽ ”‹‘–•ǡ ‹‘”‹–› ‰‘˜‡”‡– ‡–…Ǥ
†‡’”‡•• –Š‡ ƒ”‡– ‹””‡•’‡…–‹˜‡ ‘ˆ …‡”–ƒ‹ …‘’ƒ‹‡• ’‡”ˆ‘”‹‰ ™‡ŽŽǤ ‘™‡˜‡”ǡ –Š‡ ‡ˆˆ‡…– ‘ˆ
market-•’‡…‹ˆ‹…ˆƒ…–‘”‹•‰‡‡”ƒŽŽ›•Š‘”–-termǤ‡•’‹–‡—’•ƒ††‘™•ǡ’”‹…‡‘ˆƒ•–‘…‹–Š‡Ž‘‰
”—‰‡–••–ƒ„‹Ž‹œ‡†„ƒ•‡†‘–Š‡•–‘…•’‡…‹ˆ‹…ˆƒ…–‘”•ǤŠ‡”‡ˆ‘”‡ǡƒ’”—†‡–ƒ†˜‹…‡–‘ƒŽŽ‹˜‡•–‘”•‹•
–‘ƒƒŽ›•‡ƒ†‹˜‡•–ƒ†‘–•’‡…—Žƒ–‡‹•Šƒ”‡•Ǥ
Bid and Ask price
Š‡Ǯ‹†ǯ‹•–Š‡„—›‡”ǯ•’”‹…‡Ǥ–‹•–Š‹•’”‹…‡–Šƒ–›‘—‡‡†–‘‘™™Š‡›‘—Šƒ˜‡–‘•‡ŽŽƒ•–‘…Ǥ‹†
‹•–Š‡”ƒ–‡Ȁ’”‹…‡ƒ–™Š‹…Š–Š‡”‡‹•ƒ”‡ƒ†›„—›‡”ˆ‘”–Š‡•–‘…ǡ™Š‹…Š›‘—‹–‡†–‘•‡ŽŽǤŠ‡Ǯ•ǯȋ‘”
‘ˆˆ‡”Ȍ ‹• ™Šƒ– ›‘— ‡‡† –‘ ‘™ ™Š‡ ›‘—̵”‡ „—›‹‰ ‹Ǥ‡Ǥ –Š‹• ‹• –Š‡ ”ƒ–‡Ȁ ’”‹…‡ ƒ– ™Š‹…Š –Š‡”‡ ‹•
•‡ŽŽ‡””‡ƒ†›–‘•‡ŽŽŠ‹••–‘…ǤŠ‡•‡ŽŽ‡”™‹ŽŽ•‡ŽŽŠ‹••–‘…‹ˆŠ‡‰‡–•–Š‡“—‘–‡†Dz•ǯ’”‹…‡Ǥ
Index
•Šƒ”‡ƒ”‡–†‡š•Š‘™•Š‘™ƒ•’‡…‹ˆ‹‡†’‘”–ˆ‘Ž‹‘‘ˆ•Šƒ”‡’”‹…‡•‹•‘˜‹‰‹‘”†‡”–‘‰‹˜‡ƒ
‹†‹…ƒ–‹‘ ‘ˆ ƒ”‡– –”‡†•Ǥ – ‹• ƒ „ƒ•‡– ‘ˆ •‡…—”‹–‹‡• ƒ† –Š‡ ƒ˜‡”ƒ‰‡ ’”‹…‡ ‘˜‡‡– ‘ˆ –Š‡
„ƒ•‡–‘ˆ•‡…—”‹–‹‡•‹†‹…ƒ–‡•–Š‡‹†‡š‘˜‡‡–ǡ™Š‡–Š‡”—’™ƒ”†•‘”†‘™™ƒ”†•Ǥ‡•‡š‹•
‘‡‹†‡šǤŠ‡‹•ƒˆ”‡‡-ˆŽ‘ƒ–ƒ”‡–…ƒ’‹–ƒŽ‹œƒ–‹‘-™‡‹‰Š–‡†•–‘…ƒ”‡–‹†‡š‘ˆ͵Ͳ
well-‡•–ƒ„Ž‹•Š‡† ƒ† ˆ‹ƒ…‹ƒŽŽ› •‘—† …‘’ƒ‹‡• Ž‹•–‡† ‘ ‘„ƒ› –‘… š…Šƒ‰‡Ǥ Š‡ ͵Ͳ
…‘’‘‡– …‘’ƒ‹‡• ™Š‹…Š ƒ”‡ •‘‡ ‘ˆ –Š‡ Žƒ”‰‡•– ƒ† ‘•– ƒ…–‹˜‡Ž› –”ƒ†‡† •–‘…•ǡ ƒ”‡
”‡’”‡•‡–ƒ–‹˜‡‘ˆ˜ƒ”‹‘—•‹†—•–”‹ƒŽ•‡…–‘”•‘ˆ–Š‡†‹ƒ‡…‘‘›Ǥ—„Ž‹•Š‡†•‹…‡ ƒ—ƒ”›ͳǡͳͻͺ͸ǡ
–Š‡‹•”‡‰ƒ”†‡†ƒ•–Š‡’—Ž•‡‘ˆ–Š‡†‘‡•–‹…•–‘…ƒ”‡–•‹†‹ƒǤŠ‡„ƒ•‡˜ƒŽ—‡‘ˆ–Š‡
 ‹• –ƒ‡ ƒ• ͳͲͲ ‘ ’”‹Ž ͳǡ ͳͻ͹ͻǡ ƒ† ‹–• „ƒ•‡ ›‡ƒ” ƒ• ͳͻ͹ͺ-͹ͻǤ  ʹͷ —Ž›ǡ ʹͲͲͳ 
Žƒ—…Š‡†-͵Ͳǡƒ†‘ŽŽƒ”-Ž‹‡†˜‡”•‹‘‘ˆǤ
Depository
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com
120.56.225.142

 †‡’‘•‹–‘”› ‹• Ž‹‡ ƒ „ƒ ™Š‡”‡‹ –Š‡ †‡’‘•‹–• ƒ”‡ •‡…—”‹–‹‡• ȋ˜‹œǤ •Šƒ”‡•ǡ †‡„‡–—”‡•ǡ „‘†•ǡ
‰‘˜‡”‡– •‡…—”‹–‹‡•ǡ —‹–• ‡–…ǤȌ ‹ ‡Ž‡…–”‘‹… ˆ‘”Ǥ  ‡’‘•‹–‘”› …ƒ „‡ …‘’ƒ”‡† ™‹–Š ƒ „ƒǡ
™Š‹…ŠŠ‘Ž†•–Š‡ˆ—†•ˆ‘”†‡’‘•‹–‘”•ǤŠ‡”‡ƒ”‡ƒ›•‹‹Žƒ”‹–‹‡•‹ƒ•ƒ†‡’‘•‹–‘”‹‡•Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

17|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

o Š‹Ž‡–Š‡ƒŠ‘Ž†•ˆ—†•‹ƒƒ……‘—–ǡ†‡’‘•‹–‘”‹‡•Š‘Ž†•‡…—”‹–‹‡•‹ƒƒ……‘—–Ǥ
o Š‹Ž‡ ƒ –”ƒ•ˆ‡”• ˆ—†• „‡–™‡‡ ƒ……‘—–• ‘ –Š‡ ‹•–”—…–‹‘ ‘ˆ –Š‡ ƒ……‘—– Š‘Ž†‡”ǡ
‡’‘•‹–‘”›–”ƒ•ˆ‡”••‡…—”‹–‹‡•„‡–™‡‡ƒ……‘—–•‘–Š‡‹•–”—…–‹‘‘ˆ–Š‡ƒ……‘—–Š‘Ž†‡”Ǥ
o Š‹Ž‡–Š‡„ƒˆƒ…‹Ž‹–ƒ–‡•–”ƒ•ˆ‡”•™‹–Š‘—–Šƒ˜‹‰–‘Šƒ†Ž‡‘‡›ǡ‡’‘•‹–‘”›ˆƒ…‹Ž‹–ƒ–‡•
–”ƒ•ˆ‡”• ‘ˆ ‘™‡”•Š‹’ ™‹–Š‘—– Šƒ˜‹‰ –‘ Šƒ†Ž‡ •‡…—”‹–‹‡•Ǥ ƒ• ‡‡’ •ƒˆ‡ ‘‡›ǡ
†‡’‘•‹–‘”‹‡•‡‡’•ƒˆ‡•‡…—”‹–‹‡•Ǥ
†‹ƒǡ™‡Šƒ˜‡–™‘†‡’‘•‹–‘”‹‡•˜‹œǤƒ–‹‘ƒŽ‡…—”‹–‹‡•‡’‘•‹–‘”›‹‹–‡†ȋȌƒ†‡–”ƒŽ
‡’‘•‹–‘”›‡”˜‹…‡•ȋ†‹ƒȌ‹‹–‡†ȋȌǤ
Depository Participant
ˆ–‡” †‡’‘•‹–‘”›ǡ ™‡ Šƒ˜‡ ƒ‘–Š‡” ‡–‹–› …ƒŽŽ‡† ‡’‘•‹–‘”› ƒ”–‹…‹’ƒ–Ǥ ‡’‘•‹–‘”› ’”‘˜‹†‡• ‹–•
•‡”˜‹…‡• –‘ ‹˜‡•–‘”• –Š”‘—‰Š ‹–• ƒ‰‡–• …ƒŽŽ‡† †‡’‘•‹–‘”› ’ƒ”–‹…‹’ƒ–• ȋ•ȌǤ Š‡•‡ ƒ‰‡–• ƒ”‡
ƒ’’‘‹–‡† „› –Š‡ †‡’‘•‹–‘”› ™‹–Š –Š‡ ƒ’’”‘˜ƒŽ ‘ˆ Ǥ ……‘”†‹‰ –‘  ”‡‰—Žƒ–‹‘•ǡ ƒ‘‰•–
others, –Š”‡‡ …ƒ–‡‰‘”‹‡• ‘ˆ ‡–‹–‹‡•ǡ ‹Ǥ‡Ǥ ƒ•ǡ ‹ƒ…‹ƒŽ •–‹–—–‹‘• ƒ†  ”‡‰‹•–‡”‡† –”ƒ†‹‰
membe”• …ƒ „‡…‘‡ •Ǥ Ž‡ƒ•‡ ‘–‡ –Šƒ– ƒ……‘—–• ƒ”‡ ƒŽ™ƒ›• ‘ ˆ”‹ŽŽ• ƒ– ‡’‘•‹–‘”‹‡•Ǥ Š‹•
‡ƒ•ƒ‹˜‡•–‘”…ƒŠƒ˜‡ƒƒ……‘—–™‹–Š†‡’‘•‹–‘”›™‹–Š‘—–ƒ›„ƒŽƒ…‡Ǥ
Custodian
Š‡”‡‹•‘‡‘”‡‡–‹–›ƒ„‘—–™Š‹…Š›‘——•–‘™Ǥ–‹•…ƒŽŽ‡†—•–‘†‹ƒǤ—•–‘†‹ƒ‹•„ƒ•‹…ƒŽŽ›
ƒ ‘”‰ƒ‹•ƒ–‹‘ǡ ™Š‹…Š Š‡Ž’• ”‡‰‹•–‡” ƒ† •ƒˆ‡‰—ƒ”† –Š‡ •‡…—”‹–‹‡• ‘ˆ ‹–• …Ž‹‡–•Ǥ ‡•‹†‡•
•ƒˆ‡‰—ƒ”†‹‰ •‡…—”‹–‹‡•ǡ ƒ …—•–‘†‹ƒ ƒŽ•‘ ‡‡’• –”ƒ… ‘ˆ …‘”’‘”ƒ–‡ ƒ…–‹‘• ‘ „‡ŠƒŽˆ ‘ˆ ‹–• …Ž‹‡–•Ǥ
Š‡ ˆ—…–‹‘• ‘ˆ …—•–‘†‹ƒ• ƒ”‡ –‘ ƒ‹–ƒ‹ …Ž‹‡–ǯ• •‡…—”‹–‹‡• ƒ……‘—–ǡ ‘ŽŽ‡…–‹‰ –Š‡ „‡‡ˆ‹–• ‘”
”‹‰Š–•ƒ……”—‹‰–‘–Š‡…Ž‹‡–‹”‡•’‡…–‘ˆ•‡…—”‹–‹‡•ǡ‡‡’‹‰–Š‡…Ž‹‡–‹ˆ‘”‡†‘ˆ–Š‡ƒ…–‹‘•–ƒ‡
‘”–‘„‡–ƒ‡„›–Š‡‹••—‡‘ˆ•‡…—”‹–‹‡•ǡŠƒ˜‹‰ƒ„‡ƒ”‹‰‘–Š‡„‡‡ˆ‹–•‘””‹‰Š–•ƒ……”—‹‰–‘–Š‡
client.
Securities and Security Market
‡…—”‹–›‹•ƒ„”‘ƒ†‡”–‡”‹…‘’ƒ”‹•‘–‘•Šƒ”‡ƒ”‡–ǤŠ‡†‡ˆ‹‹–‹‘‘ˆǮ‡…—”‹–‹‡•ǯƒ•’‡”–Š‡
‡…—”‹–‹‡• ‘–”ƒ…–• ‡‰—Žƒ–‹‘ …– ȋȌǡ ͳͻͷ͸ǡ ‹…Ž—†‡• ‹•–”—‡–• •—…Š ƒ• •Šƒ”‡•ǡ „‘†•ǡ
•…”‹’•ǡ•–‘…•‘”‘–Š‡”ƒ”‡–ƒ„Ž‡•‡…—”‹–‹‡•‘ˆ•‹‹Žƒ”ƒ–—”‡‹‘”‘ˆƒ›‹…‘”’‘”ƒ–‡…‘’ƒ›‘”
„‘†› …‘”’‘”ƒ–‡ǡ ‰‘˜‡”‡– •‡…—”‹–‹‡•ǡ †‡”‹˜ƒ–‹˜‡• ‘ˆ •‡…—”‹–‹‡•ǡ —‹–• ‘ˆ …‘ŽŽ‡…–‹˜‡ ‹˜‡•–‡–
•…Š‡‡ǡ‹–‡”‡•–ƒ†”‹‰Š–•‹•‡…—”‹–‹‡•ǡ•‡…—”‹–›”‡…‡‹’–‘”ƒ›‘–Š‡”‹•–”—‡–••‘†‡…Žƒ”‡†„›
–Š‡ ‡–”ƒŽ
‘˜‡”‡–Ǥ ‡…—”‹–‹‡• ƒ”‡–• ‹• ƒ ’Žƒ…‡ ™Š‡”‡ „—›‡”• ƒ† •‡ŽŽ‡”• ‘ˆ •‡…—”‹–‹‡• …ƒ
‡–‡”‹–‘–”ƒ•ƒ…–‹‘•–‘’—”…Šƒ•‡ƒ†•‡ŽŽ•Šƒ”‡•ǡ„‘†•ǡ†‡„‡–—”‡•‡–…Ǥ —”–Š‡”ǡ‹–’‡”ˆ‘”•ƒ
‹’‘”–ƒ– ”‘Ž‡ ‘ˆ ‡ƒ„Ž‹‰ …‘”’‘”ƒ–‡•ǡ ‡–”‡’”‡‡—”• –‘ ”ƒ‹•‡ ”‡•‘—”…‡• ˆ‘” –Š‡‹” …‘’ƒ‹‡• ƒ†
„—•‹‡•• ˜‡–—”‡• –Š”‘—‰Š ’—„Ž‹…
Member Name: ‹••—‡•Ǥ
sunil kumar ”ƒ•ˆ‡”
Member's Email ‘ˆ ”‡•‘—”…‡• ˆ”‘
address: tripathisunilkumar21@gmail.com –Š‘•‡ Šƒ˜‹‰ ‹†Ž‡ ”‡•‘—”…‡•
120.56.225.142

ȋ‹˜‡•–‘”•Ȍ–‘‘–Š‡”•™Š‘Šƒ˜‡ƒ‡‡†ˆ‘”–Š‡ȋ…‘”’‘”ƒ–‡•Ȍ‹•‘•–‡ˆˆ‹…‹‡–Ž›ƒ…Š‹‡˜‡†–Š”‘—‰Š
th‡ •‡…—”‹–‹‡• ƒ”‡–Ǥ –ƒ–‡† ˆ‘”ƒŽŽ›ǡ •‡…—”‹–‹‡• ƒ”‡–• ’”‘˜‹†‡ …Šƒ‡Ž• ˆ‘” ”‡ƒŽŽ‘…ƒ–‹‘ ‘ˆ
•ƒ˜‹‰• –‘ ‹˜‡•–‡–• ƒ† ‡–”‡’”‡‡—”•Š‹’Ǥ ƒ˜‹‰• ƒ”‡ Ž‹‡† –‘ ‹˜‡•–‡–• „› ƒ ˜ƒ”‹‡–› ‘ˆ
‹–‡”‡†‹ƒ”‹‡•ǡ–Š”‘—‰Šƒ”ƒ‰‡‘ˆˆ‹ƒ…‹ƒŽ’”‘†—…–•ǡ…ƒŽŽ‡†Ǯ‡…—rities’.

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

18|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Regulation of Security Market

Š‡ •‡…—”‹–‹‡• ƒ”‡–• ‡‡† ”‡‰—Žƒ–‹‘ „‡…ƒ—•‡ –Š‡”‡ ‹• ƒ„•‡•‡ ‘ˆ ’‡”ˆ‡…– …‘’‡–‹–‹‘ ƒ†
ƒ”‡–•ƒ”‡’”‘‡–‘ƒ‹’—Žƒ–‹‘Ǥ–‹•–Š‡†—–›‘ˆ–Š‡”‡‰—Žƒ–‘”–‘‡•—”‡
–Šƒ––Š‡ƒ”‡–’ƒ”–‹…‹’ƒ–•„‡Šƒ˜‡‹ƒ†‡•‹”‡†ƒ‡”•‘–Šƒ–•‡…—”‹–‹‡•ƒ”‡–…‘–‹—‡•–‘„‡ƒ
ƒŒ‘”•‘—”…‡‘ˆˆ‹ƒ…‡ˆ‘”…‘”’‘”ƒ–‡ƒ†‰‘˜‡”‡–ƒ†–Š‡‹–‡”‡•–‘ˆ‹˜‡•–‘”•ƒ”‡’”‘–‡…–‡†Ǥ
 †‹ƒǡ –Š‡ ”‡•’‘•‹„‹Ž‹–› ˆ‘” ”‡‰—Žƒ–‹‰ –Š‡ •‡…—”‹–‹‡• ƒ”‡– ‹• •Šƒ”‡† „› ‡’ƒ”–‡– ‘ˆ
…‘‘‹… ˆˆƒ‹”• ȋȌǡ ‡’ƒ”–‡– ‘ˆ ‘’ƒ› ˆˆƒ‹”• ȋȌǡ ‡•‡”˜‡ ƒ ‘ˆ †‹ƒ ȋȌ ƒ†
‡…—”‹–‹‡•ƒ†š…Šƒ‰‡‘ƒ”†‘ˆ†‹ƒȋȌǤŠ‡‡…—”‹–‹‡•ƒ†š…Šƒ‰‡‘ƒ”†‘ˆ†‹ƒȋȌ‹•
–Š‡”‡‰—Žƒ–‘”›•–ƒ–—–‘”›ƒ—–Š‘”‹–›‹†‹ƒ‡•–ƒ„Ž‹•Š‡†—†‡”‡…–‹‘͵‘ˆ…–ǡͳͻͻʹǤ…–ǡ
ͳͻͻʹǤŠ‡•–ƒ–—–‘”›’‘™‡”•‘ˆƒ”‡ǣ
A. ”‘–‡…–‹‰–Š‡‹–‡”‡•–•‘ˆ‹˜‡•–‘”•‹•‡…—”‹–‹‡•
B. ”‘‘–‹‰–Š‡†‡˜‡Ž‘’‡–‘ˆ–Š‡•‡…—”‹–‹‡•ƒ”‡–
C. ‡‰—Žƒ–‹‰–Š‡•‡…—”‹–‹‡•ƒ”‡–Ǥ
D. ‡‰—Žƒ–‹‰–Š‡„—•‹‡••‹•–‘…‡š…Šƒ‰‡•ƒ†ƒ›‘–Š‡”•‡…—”‹–‹‡•ƒ”‡–•
E. ‡‰‹•–‡”‹‰ƒ†”‡‰—Žƒ–‹‰–Š‡™‘”‹‰‘ˆ•–‘…„”‘‡”•ǡ•—„–„”‘‡”•‡–…Ǥ
F. ”‘‘–‹‰ƒ†”‡‰—Žƒ–‹‰•‡Žˆ-”‡‰—Žƒ–‘”›‘”‰ƒ‹œƒ–‹‘•
G. ”‘Š‹„‹–‹‰ˆ”ƒ—†—Ž‡–ƒ†—ˆƒ‹”–”ƒ†‡’”ƒ…–‹…‡•
H. ƒŽŽ‹‰ˆ‘”‹ˆ‘”ƒ–‹‘ˆ”‘ǡ—†‡”–ƒ‹‰‹•’‡…–‹‘ǡ…‘†—…–‹‰‹“—‹”‹‡•ƒ†ƒ—†‹–•‘ˆ–Š‡
•–‘… ‡š…Šƒ‰‡•ǡ ‹–‡”‡†‹ƒ”‹‡•ǡ •‡Žˆ – ”‡‰—Žƒ–‘”› ‘”‰ƒ‹œƒ–‹‘•ǡ —–—ƒŽ ˆ—†• ƒ† ‘–Š‡”
’‡”•‘•ƒ••‘…‹ƒ–‡†™‹–Š–Š‡•‡…—”‹–‹‡•ƒ”‡–Ǥ
Chapter 2. Debt Capital and Debt Instruments
–Š‡ƒ„‘˜‡†‹•…—••‹‘ǡ™‡‰‘––‘‘™–Šƒ–ƒ•Šƒ”‡Š‘Ž†‡”ǡ™Šƒ–‡˜‡”‹‰Š–„‡–Š‡“—ƒ–‹–›‘ˆ–Š‡
•Šƒ”‡•ǡ ‹• ƒ ’ƒ”– ‘™‡” ‘ˆ –Š‡ …‘’ƒ› ƒ† ‡–‹–Ž‡† –‘ ƒŽŽ –Š‡ „‡‡ˆ‹–• ‘ˆ ‘™‡”•Š‹’ǡ ‹…Ž—†‹‰
†‹˜‹†‡† ȋ…‘’ƒ›ǯ• ’”‘ˆ‹– †‹•–”‹„—–‡† –‘ ‘™‡”•ȌǤ ˜‡” –Š‡ ›‡ƒ”• ‹ˆ –Š‡ …‘’ƒ› ’‡”ˆ‘”• ™‡ŽŽǡ
‘–Š‡”‹˜‡•–‘”•™‘—Ž†Ž‹‡–‘„‡…‘‡‘™‡”•‘ˆ–Š‹•’‡”ˆ‘”‹‰…‘’ƒ›„›„—›‹‰‹–••Šƒ”‡•ǤŠ‹•
‹…”‡ƒ•‡ ‹ †‡ƒ† ˆ‘” •Šƒ”‡• Ž‡ƒ†• –‘ ‹…”‡ƒ•‡ ‹ ‹–• •Šƒ”‡ ’”‹…‡•Ǥ Š‡ –Š‡ ’”‹…‡• ‘ˆ –Š‡ •Šƒ”‡
‹…”‡ƒ•‡ǡ –Š‡ ‹˜‡•–‘”• Šƒ˜‡ ‘’–‹‘ ‘ˆ •‡ŽŽ‹‰ –Š‡‹” •Šƒ”‡• ƒ– ƒ Š‹‰Š‡” ’”‹…‡ –Šƒ ƒ– ™Š‹…Š –Š‡›
’—”…Šƒ•‡†‹–ǤŠ—•‹˜‡•–‘”…ƒ‹…”‡ƒ•‡–Š‡‹”™‡ƒŽ–Šǡ’”‘˜‹†‡†–Š‡›ƒ‡–Š‡”‹‰Š–…Š‘‹…‡ǡƒ•–Š‡
”‡˜‡”•‡‹•ƒŽ•‘–”—‡Ǥ
’ƒ”– ˆ”‘ –Š‡ •Šƒ”‡•ǡ –Š‡”‡ ƒ”‡ ƒ› ‘–Š‡” ˆ‹ƒ…‹ƒŽ ‹•–”—‡–• ȋ•‡…—”‹–‹‡•Ȍ —•‡† ˆ‘” ”ƒ‹•‹‰
…ƒ’‹–ƒŽǤ ‡„‡–—”‡• ‘” „‘†• ƒ”‡ †‡„– ‹•–”—‡–• ™Š‹…Š ’ƒ› ‹–‡”‡•– ‘˜‡” –Š‡‹” Ž‹ˆ‡ –‹‡ ƒ† ƒ”‡
—•‡†„›…‘’ƒ‹‡•–‘”ƒ‹•‡‡†‹—‘”Ž‘‰–‡”†‡„–…ƒ’‹–ƒŽǤˆƒ‹˜‡•–‘”’”‡ˆ‡”•ˆ‹š‡†‹…‘‡ǡ
Š‡Ȁ•Š‡ƒ›‹˜‡•–‹–Š‡•‡‹•–”—‡–•™Š‹…Šƒ›‰‹˜‡Š‹ȀŠ‡”Š‹‰Š‡””ƒ–‡‘ˆ‹–‡”‡•––Šƒ„ƒ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

ˆ‹š‡††‡’‘•‹–Ǥ
o –Š‡†‹ƒ•‡…—”‹–‹‡•ƒ”‡–•ǡ–Š‡–‡”Ǯbondǯ‹•—•‡†ˆ‘”†‡„–‹•–”—‡–•‹••—‡†„›–Š‡
‡–”ƒŽƒ†–ƒ–‡‰‘˜‡”‡–•ƒ†’—„Ž‹…•‡…–‘”‘”‰ƒ‹œƒ–‹‘•ƒ†–Š‡–‡”Ǯdebentureǯ‹•
—•‡†ˆ‘”‹•–”—‡–•‹••—‡†„›’”‹˜ƒ–‡…‘”’‘”ƒ–‡•‡…–‘”Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

19|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Š‡‡„–•–”—‡–•ƒ›„‡‘”’‘”ƒ–‡‡„–‘”
‘˜‡”‡–‡„–Ǥ‘”’‘”ƒ–‡†‡„–‹•–”—‡–•ƒ”‡
‰‡‡”ƒŽŽ› …ƒŽŽ‡† ‡„‡–—”‡• ™Š‹Ž‡
‘˜‡”‡– †‡„– ‹•–”—‡–• ƒ”‡ ‰‡‡”ƒŽŽ› …ƒŽŽ‡† ‘†•ǡ „—–
‘†•…ƒ„‡‹••—‡†„›…‘’ƒ‹‡•ƒ†Ž‘…ƒŽgovernance„‘†‹‡•–‘‘Ǥ
Debentures:
‡„‡–—”‡‹•ƒ†‘…—‡–ƒ…‘™Ž‡†‰‹‰ƒŽ‘ƒ–‘…‘’ƒ›ƒ†‡š‡…—–‡†—†‡”–Š‡…‘‘•‡ƒŽ
‘ˆ –Š‡ …‘’ƒ›ǡ —•—ƒŽŽ› …‘–ƒ‹‹‰ ’”‘˜‹•‹‘• ƒ• –‘ ’ƒ›‡–ǡ ‘ˆ ‹–‡”‡•– ƒ† –Š‡ ”‡’ƒ›‡– ‘ˆ
’”‹…‹’ƒŽƒ‘—–ƒ†‰‹˜‹‰ƒ…Šƒ”‰‡‘–Š‡ƒ••‡–•‘ˆƒ•—…Šƒ…‘’ƒ›ǡ™Š‹…Šƒ›‰‹˜‡•‡…—”‹–›ˆ‘”
–Š‡’ƒ›‡–‘˜‡”–Š‡•‘‡‘”ƒŽŽ–Š‡ƒ••‡–•‘ˆ–Š‡…‘’ƒ›Ǥ••—‡‘ˆ‡„‡–—”‡•‹•‘‡‘ˆ–Š‡‘•–
…‘‘‡–Š‘†•‘ˆ”ƒ‹•‹‰–Š‡ˆ—†•ƒ˜ƒ‹Žƒ„Ž‡–‘–Š‡…‘’ƒ›Ǥ–‹•ƒ‹’‘”–ƒ–•‘—”…‡‘ˆˆ‹ƒ…‡Ǥ
Š‡‘•–„ƒ•‹…ˆ‡ƒ–—”‡•‘ˆ‡„‡–—”‡•ƒ”‡ƒ•ˆ‘ŽŽ‘™•ǣ
o †‡„‡–—”‡ƒ…‘™Ž‡†‰‡•ƒ†‡„–
o – ‹• ‹ –Š‡ ˆ‘” ‘ˆ …‡”–‹ˆ‹…ƒ–‡ ‹••—‡† —†‡” –Š‡ •‡ƒŽ ‘ˆ –Š‡ …‘’ƒ›Ǥ  – —•—ƒŽŽ› •Š‘™• –Š‡
ƒ‘—–Ƭ†ƒ–‡‘ˆ”‡’ƒ›‡–‘ˆ–Š‡Ž‘ƒǤ
o –Šƒ•ƒ”ƒ–‡‘ˆ‹–‡”‡•–Ƭ†ƒ–‡‘ˆ‹–‡”‡•–’ƒ›‡–Ǥ
o ‘”ƒŽŽ›†‡„‡–—”‡•ƒ”‡•‡…—”‡†Ƭ‹••—‡†ƒ‰ƒ‹•––Š‡ƒ••‡–•‘ˆ–Š‡…‘’ƒ›Ǥ‘™‡˜‡”ǡ
‘–ƒŽ™ƒ›•–Š‡†‡„‡–—”‡•ƒ”‡•‡…—”‡†Ǥ
Types of Debentures
‹ˆˆ‡”‡––›’‡•‘ˆ†‡„‡–—”‡•…ƒ„‡…Žƒ••‹ˆ‹‡†ƒ•ˆ‘ŽŽ‘™•ǣ-

Types of Debentures

Security Performance Priority Convertibility Records

Naked Redeemable First Covertible Bearer

Non-
Secured Irredeemable Second Registered
covertible

On the basis of security
o ƒ‡†‡„‡–—”‡•ǣ Š‡•‡‡„‡–—”‡•ƒ”‡‘–•‡…—”‡†ƒ‰ƒ‹•–ƒ›ƒ••‡–•‘ˆ–Š‡‘’ƒ›Ǥ
…ƒ•‡‘ˆ™‹†‹‰‘ˆ–Š‡…‘’ƒ›ǡ†‡„‡–—”‡•Š‘Ž†‡”•Š‘Ž†‹‰—•‡…—”‡††‡„‡–—”‡•–”‡ƒ–‡†
ƒ•—•‡…—”‡†…”‡†‹–‘”•Ǥ
o ‡…—”‡† ‡„‡–—”‡•ǣ Š‡•‡ ‡„‡–—”‡• ƒ”‡ •‡…—”‡† „› ƒ …Šƒ”‰‡ ‘ –Š‡ ƒ••‡–• ‘ˆ –Š‡
…‘’ƒ›ǤŠ‡•‡†‡„‡–—”‡•ƒ”‡•‡…—”‡†‡‹–Š‡”‘’ƒ”–‹…—Žƒ”ƒ••‡–•…ƒŽŽ‡†ˆ‹š‡†…Šƒ”‰‡‘”‘
–Š‡‰‡‡”ƒŽƒ••‡–•‘ˆ–Š‡…‘’ƒ›…ƒŽŽ‡†ˆŽ‘ƒ–‹‰…Šƒ”‰‡ǤŠ‡†‡„‡–—”‡•Š‘Ž†‡”Šƒ•ƒ”‹‰Š–
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

–‘ ”‡…‘˜‡” ‘—–•–ƒ†‹‰ Ž‘ƒ Ƭ ‹–‡”‡•– ‘—– ‘ˆ •—…Š …Šƒ”‰‡ ƒ••‡–•Ǥ Š‡•‡ †‡„‡–—”‡• ƒ”‡
‹••—‡†„›–Š‡…‘’ƒ›—†‡”ƒƒ‰”‡‡‡–™Š‹…Š‹•…ƒŽŽ‡†Dz‘”–‰ƒ‰‡‡‡†dzǤ—…Š‘”–‰ƒ‰‡
‹•”‡‰‹•–‡”‡†™‹–Š‡‰‹•–‡”‘ˆ‘’ƒ‹‡•Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

20|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

On the basis of performance:

o ‡†‡‡ƒ„Ž‡ ‡„‡–—”‡•ǣ Š‡ †‡„‡–—”‡• ƒ”‡ ”‡†‡‡‡† „› ”‡’ƒ›‡– ‘ˆ –Š‡ ƒ‘—– ‘ˆ
†‡„‡–—”‡•ƒˆ–‡”ƒ•’‡…‹ˆ‹‡††ƒ–‡ǡƒ•’‡”–‡”•Ƭ…‘†‹–‹‘•‹••—‡†Ǥ
o ””‡†‡‡ƒ„Ž‡‡„‡–—”‡•ǣ–Š‹•…ƒ•‡–Š‡‹••—‹‰…‘’ƒ›†‘‡•‘–ˆ‹šƒ›†ƒ–‡„›™Š‹…Š
†‡„‡–—”‡••Š‘—Ž†„‡”‡†‡‡‡†Ƭ–Š‡†‡„‡–—”‡•Š‘Ž†‡”…ƒ‘–†‡ƒ†”‡’ƒ›‡–‘ˆ–Š‡
•—‘ˆ†‡„‡–—”‡ˆ”‘–Š‡…‘’ƒ›•‘Ž‘‰ƒ•‹–‹•‰‘‹‰…‘…‡”Ǥ
On the basis of priority:
o ‹”•– †‡„‡–—”‡•ǣ TŠ‹• –›’‡ ‘ˆ †‡„‡–—”‡• ƒ”‡ ”‡’ƒ‹† „‡ˆ‘”‡ –Š‡ ”‡’ƒ›‡– ‘ˆ ‘–Š‡”
debentures.
o ‡…‘††‡„‡–—”‡•ǣŠ‡•‡†‡„‡–—”‡•ƒ”‡’ƒ‹†ƒˆ–‡”’ƒ›‡–‘ˆˆ‹”•–†‡„‡–—”‡•Ǥ
On the basis of convertibility:
o ‘˜‡”–‹„Ž‡ †‡„‡–—”‡•ǣ ‘Ž†‡”• ‘ˆ •—…Š †‡„‡–—”‡• ƒ”‡ ‰‹˜‡ ‘’–‹‘ –‘ …‘˜‡”– –Š‡
†‡„‡–—”‡•ˆ—ŽŽ›‘”’ƒ”–Ž›‹–‘‡“—‹–›•Šƒ”‡•‘”’”‡ˆ‡”‡…‡•Šƒ”‡•‘”‡™†‡„‡–—”‡•ƒˆ–‡”
ƒ•’‡…‹ˆ‹‡†–‹me.
o ‘…‘˜‡”–‹„Ž‡†‡„‡–—”‡•ǣŠ‡Š‘Ž†‡”•‘ˆ–Š‹•–›’‡‘ˆ†‡„‡–—”‡•†‘‘–Šƒ˜‡ƒ›”‹‰Š–
–‘…‘˜‡”––Š‡‹–‘‡“—‹–›•Šƒ”‡•‡–…Ǥ
On the basis of Records:
o ‡ƒ”‡” †‡„‡–—”‡•ǣ —•– Ž‹‡ „‡ƒ”‡” …Š‡“—‡• –Š‡•‡ †‡„‡–—”‡• …ƒ „‡ –”ƒ•ˆ‡””‡† ˆ”‡el›Ǥ
ƒ›‡–‘ˆ‹–‡”‡•–‹•ƒ†‡‘’”‘†—…–‹‘•‘ˆ…‘—’‘•ƒ––ƒ…Š‡†™‹–Š†‡„‡–—”‡•Ǥ
o ‡‰‹•–‡”‡† †‡„‡–—”‡•ǣ Š‡•‡ ƒ”‡ –”ƒ•ˆ‡””‡† ‘Ž› „› –”ƒ•ˆ‡” †‡‡†Ǥ Š‡ …‘’Ž‡–‡
’ƒ”–‹…—Žƒ”•‹”‡‰ƒ”†–‘•—…Š†‡„‡–—”‡•ƒ”‡‡–‡”‡†‹–‘”‡‰‹•–‡”Ƭ–Š‡‹–‡”‡•–‹•’ƒ‹†‘Ž›
–‘–Š‘•‡™Š‘•‡ƒ‡ƒ’’‡ƒ”•‹–Š‡”‡‰‹•–‡”
Comparison of shares and debentures
Shares Debentures
Share capital is an ownership capital. Debentures capital is credit to the company.
A shareholder is the owner of the company. A debenture holder is the creditor of the company
Share capital is not returnable in the life time of the Debenture capital returnable during the lifetime of the
company. However, the redeemable preference shares company. The exception is the irredeemable debentures
are refunded during the life-time of the company. which are not redeemable during the life-time of the
company.
Equity Shareholders enjoy the voting rights. Debentures holders do not have the voting rights.
Dividend is payable on shares & it is an appropriation Interest on debentures is payable at a fixed rate on
of profits specified date irrespective of profits of the company.
Dividend depends on the profit of the company Interest is paid on debentures & it is a charge on the
revenue of the company.
Shares are unsecured. Debentures are generally secured.
In the event of winding up of the company shareholders Debenture holder being the creditors are paid prior to the
are the last person in re-fund of their capital. shareholders. If secured they have priority even over the
unsecured creditors.
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

Issue of Debentures
‡„‡–—”‡•…ƒǡ„‡‹••—‡†‹–Š”‡‡™ƒ›•Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

21|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

o – ’ƒ”ǣ ‡„‡–—”‡ ‹• •ƒ‹† –‘ Šƒ˜‡ „‡‡ ‹••—‡† ƒ– ’ƒ” ™Š‡ –Š‡ ƒ‘—– …‘ŽŽ‡…–‡† ˆ‘” ‹– ‹•
equal –‘ –Š‡ ‘‹ƒŽ ˜ƒŽ—‡ ‘ˆ †‡„‡–—”‡•Ǥ ‡Ǥ‰Ǥ –Š‡ ‹••—‡ ‘ˆ †‡„‡–—”‡• ‘ˆ •Ǥ ͳͲͲȀ- ˆ‘” •Ǥ
100/-
o –‹•…‘—–ǣ‡„‡–—”‡‹••ƒ‹†–‘Šƒ˜‡„‡‡‹••—‡†ƒ–†‹•…‘—–™Š‡–Š‡ƒ‘—–…‘ŽŽ‡…–‡†‹•
Ž‡•• –Šƒ –Š‡ ‘‹ƒŽ ˜ƒŽ—‡ǡ ˆ‘” ‡Ǥ‰Ǥǡ ‹••—‡ ‘ˆ †‡„‡–—”‡• ‘ˆ •Ǥ ͳͲͲȀ- ˆ‘” •Ǥ ͻͷȀ-Ǥ Š‡
†‹ˆˆ‡”‡…‡ ‘ˆ •Ǥ ͷȀ- ‹• –Š‡ †‹•…‘—– ƒ† ‹• …ƒŽŽ‡† †‹•…‘—– ‘ ‹••—‡ ‘ˆ ‡„‡–—”‡•Ǥ Š‹•
†‹•…‘—–‘‹••—‡‘ˆ†‡„‡–—”‡•‹•ƒ…ƒ’‹–ƒŽŽ‘••Ǥ
o –”‡‹—ǣŠ‡–Š‡’”‹…‡…Šƒ”‰‡†‹•‘”‡–Šƒ‹–•‘‹ƒŽ˜ƒŽ—‡ǡƒ†‡„‡–—”‡•‹••ƒ‹†–‘
„‡ ‹••—‡† ƒ– ƒ ’”‡‹—Ǥ ‡Ǥ‰Ǥǡ ‹••—‡ ‘ˆ †‡„‡–—”‡• ‘ˆ •Ǥ ͳͲͲ ‡ƒ…Š ˆ‘” •Ǥ ͳʹͲǡ –Š‡ ‡š…‡••
ƒ‘—–‘˜‡”–Š‡‘‹ƒŽ˜ƒŽ—‡‹Ǥ‡Ǥǡ•ǤʹͲ‹•–Š‡’”‡‹—‘‹••—‡‘ˆ†‡„‡–—”‡•Ǥ”‡‹—
”‡…‡‹˜‡† ‘ ‹••—‡ ‘ˆ †‡„‡–—”‡• ‹• ƒ …ƒ’‹–ƒŽ ‰ƒ‹Ǥ Ž‡ƒ•‡ ‘–‡ –Šƒ– –Š‹• ”‡‹— ‘ ‹••—‡ ‘ˆ
†‡„‡–—”‡•…ƒ‘–„‡—–‹Ž‹•‡†ˆ‘”†‹•–”‹„—–‹‘‘ˆ†‹˜‹†‡†Ǥ”‡‹—‘†‡„‡–—”‡•‹••Š‘™
—†‡”–Š‡Š‡ƒ†‡•‡”˜‡•Ƭ—”’Ž—•‘–Š‡Ž‹ƒ„‹Ž‹–›•‹†‡‘ˆ–Š‡ƒŽƒ…‡Š‡‡–Ǥ
Issue of Debentures for Cash
‡„‡–—”‡•ƒ›„‡‹••—‡ˆ‘”…ƒ•Šƒ–ƒ’ƒ”ǡƒ–ƒ†‹•…‘—–‘”ƒ–ƒ’”‡‹—ǤŠ‡ƒ‘—–‹•’ƒ›ƒ„Ž‡
‹‹•–ƒŽ‡–•‡–”‹‡•™‹ŽŽ„‡•‹‹Žƒ”–‘–Š‡‹••—‡‘ˆ•Šƒ”‡•Ǥ›’”‡‹—‘”†‹•…‘—–‘‹••—‡‘ˆ
†‡„‡–—”‡•‹•—•—ƒŽŽ›ƒ†Œ—•–‡†ƒ––Š‡–‹‡‘ˆƒ‹‰ƒŽŽ‘–‡–Ǥ”‡‹—’ƒ›ƒ„Ž‡‘”‡†‡’–‹‘‘ˆ
debentur‡•‹•ƒŽ•‘ƒ†Œ—•–‡†ƒ––Š‡–‹‡‘ˆ‹••—‡‘ˆ†‡„‡–—”‡•Ǥ
Issue of debentures for non-cash consideration
‡„‡–—”‡• ƒ› „‡ ‹••—‡† ˆ‘” …‘•‹†‡”ƒ–‹‘ ‘–Š‡” –Šƒ …ƒ•Š •—…Š ƒ• ƒ…“—‹•‹–‹‘ ‘ˆ „—•‹‡••ǡ ‘”
ƒ••‡–•Ǥ – •Š‘—Ž† „‡ ‘–‡† –Šƒ– ‘—…Š †‡„‡–—”‡• ƒ› „‡ ‹••—‡ ƒ– ’ƒ” ‘” ƒ– ƒ ’”‡‹— ‘” ƒ– ƒ
discount.
Issue of debentures as a collateral security
‡„‡–—”‡• …ƒ „‡ ‹••—‡† ƒ• …‘ŽŽƒ–‡”ƒŽ •‡…—”‹–› ƒ‰ƒ‹•– ƒ Ž‘ƒ ‘” ‘˜‡”†”ƒˆ– ˆ”‘ „ƒ ‘” ‘–Š‡”
ˆ‹ƒ…‹ƒŽ‹•–‹–—–‹‘Ǥ‘ŽŽƒ–‡”ƒŽ‡…—”‹–›‡ƒ•ƒƒ††‹–‹‘ƒŽ‘”’ƒ”ƒŽŽ‡Ž•‡…—”‹–›Ǥ
Redemption of Debentures
‡„‡–—”‡•ƒ›„‡”‡†‡‡‡†ȋ”‡’ƒ‹†ȌƒȌƒ–ƒ’ƒ”„Ȍƒ–ƒ’”‡‹—‘”…Ȍƒ–ƒ†‹•…‘—–Ǥ
o ‡†‡‡ƒ„Ž‡ƒ–’ƒ”ǣŠ‡†‡„‡–—”‡•ƒ”‡–‘„‡”‡†‡‡‡†ƒ––Š‡‹”ˆƒ…‡˜ƒŽ—‡–Š‡›ƒ”‡•ƒ‹†
–‘„‡”‡†‡‡ƒ„Ž‡ƒ–’ƒ”Ǥ
o ‡†‡‡ƒ„Ž‡ ƒ– ƒ ’remium: Š‡ †‡„‡–—”‡• ƒ”‡ –‘ „‡ ”‡†‡‡‡† ƒ– ƒ ƒ‘—– Š‹‰Š‡”
–Šƒ –Š‡‹” ˆƒ…‡ ˜ƒŽ—‡ –Š‡› •ƒ‹† –‘ „‡ ”‡†‡‡ƒ„Ž‡ ƒ– ƒ ’”‡‹—Ǥ ”‡‹— ’ƒ›ƒ„Ž‡ ‘
”‡†‡’–‹‘ ‘ˆ †‡„‡–—”‡• ‹• ƒ …ƒ’‹–ƒŽ Ž‘•• ˆ‘” –Š‡ …‘’ƒ›Ǥ —…Š ’”‡‹— ‡˜‡ –Š‘—‰Š
’ƒ›ƒ„Ž‡‘”‡†‡’–‹‘—•–„‡’”‘˜‹†‡†ƒ•ƒŽ‹ƒ„‹Ž‹–›ƒ–ƒ–‹‡‘ˆ‹••—‡‘ˆ†‡„‡–—”‡•Ǥ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142
o ‡†‡‡ƒ„Ž‡ƒ–ƒ†‹•…‘—–ǣŠ‡†‡„‡–—”‡•ƒ”‡–‘„‡”‡†‡‡‡†ƒ–ƒƒ‘—–Ž‘™‡”–Šƒ
–Š‡‹”ˆƒ…‡˜ƒŽ—‡ǡ–Š‡›ƒ”‡•ƒ‹†–‘„‡”‡†‡‡ƒ„Ž‡ƒ–ƒ†‹•…‘—–•—…Š†‹•…‘—–‹•ƒ…ƒ’‹–ƒŽ’”‘ˆ‹–
ˆ‘”–Š‡…‘pany.

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

22|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Bonds
‘†•ƒ†‡„‡–—”‡•ǡ„‘–Šƒ”‡•‹‹Žƒ”Ǥ‘†•…ƒ„‡‹••—‡†„›…‘’ƒ‹‡•ǡˆ‹ƒ…‹ƒŽ‹•–‹–—–‹‘•ǡ
—‹…‹’ƒŽ‹–‹‡• ‘” ‰‘˜‡”‡– …‘’ƒ‹‡• ƒ† ƒ”‡ ‘”ƒŽŽ› ‘– •‡…—”‡† „› ƒ› ƒ••‡–• ‘ˆ –Š‡
…‘’ƒ›ȋ—•‡…—”‡†ȌǤŠ‡›„‘†•ƒ›„‡‡‰—Žƒ”…‘‡‘†•ǡ™Š‹…Š’”‘˜‹†‡ƒ•–ƒ„Ž‡•‘—”…‡‘ˆ
‹…‘‡ƒ–”‡‰—Žƒ”ǡ’”‡†‡–‡”‹‡†‹–‡”˜ƒŽ•‘”ƒš-ƒ˜‹‰‘†•ǡ™Š‹…Š‘ˆˆ‡”–ƒš‡š‡’–‹‘—’–‘ƒ
•’‡…‹ˆ‹‡†ƒ‘—–‘ˆ‹˜‡•–‡–ǡ†‡’‡†‹‰‘–Š‡•…Š‡‡ƒ†–Š‡
‘˜‡”‡–‘–‹ˆ‹…ƒ–‹‘ǤŠ‡”‡
ƒ”‡˜‡”‹–‹‡•‘ˆƒš”‡Ž‹‡ˆ„‘†•ƒ˜ƒ‹Žƒ„Ž‡‘–Š‡ƒ”‡–Ǥ
Government Debts:

‘˜‡”‡–•‡…—”‹–‹‡•ȋ
-‡…•Ȍƒ”‡‹•–”—‡–•‹••—‡†„›
‘˜‡”‡–‘ˆ†‹ƒ–‘”ƒ‹•‡‘‡›Ǥ

‡…•’ƒ›•‹–‡”‡•–ƒ–ˆ‹š‡†”ƒ–‡‘•’‡…‹ˆ‹…†ƒ–‡•‘ŠƒŽˆ-›‡ƒ”Ž›„ƒ•‹•Ǥ–‹•ƒ˜ƒ‹Žƒ„Ž‡‹™‹†‡”ƒ‰‡‘ˆ
ma–—”‹–›ǡ ˆ”‘ •Š‘”– †ƒ–‡† ȋ‘‡ ›‡ƒ”Ȍ –‘ Ž‘‰ †ƒ–‡† ȋ—’  –‘ –Š‹”–› ›‡ƒ”•ȌǤ ‹…‡ ‹– ‹• •‘˜‡”‡‹‰
„‘””‘™‹‰ǡ‹–‹•ˆ”‡‡ˆ”‘”‹•‘ˆ†‡ˆƒ—Ž–ȋ…”‡†‹–”‹•ȌǤŠ‡‹˜‡•–‘”•…ƒ•—„•…”‹„‡–‘–Š‡•‡„‘†•
–Š”‘—‰Š‘”„—›‹–‹•–‘…‡š…Šƒ‰‡Ǥ
Hybrid Instruments
Š‡ ›„”‹† •–”—‡–• ƒ”‡ ƒ …‘„‹ƒ–‹‘ ‘ˆ ‘™‡”•Š‹’ ƒ† Ž‘ƒ ‹•–”—‡–•Ǥ šƒ’Ž‡• ƒ”‡
”‡ˆ‡”‡…‡ Šƒ”‡•ǡ ——Žƒ–‹˜‡ ”‡ˆ‡”‡…‡ Šƒ”‡• ƒ† ——Žƒ–‹˜‡ ‘˜‡”–‹„Ž‡ ”‡ˆ‡”‡…‡ Šƒ”‡•Ǥ
”‡ˆ‡”‡…‡•Šƒ”‡•ƒ”‡ƒŽ•‘‘™ƒ•”‡ˆ‡””‡†–‘…ǤŠ‡”‡ˆ‡”‡…‡•Šƒ”‡‡–‹–Ž‡–Š‡‹˜‡•–‘”•–‘
”‡…‡‹˜‡†‹˜‹†‡†ƒ–ƒˆ‹š‡†”ƒ–‡ǤŠ‹•‹•–Š‡ƒŒ‘”†‹ˆˆ‡”‡…‡„‡–™‡‡–Š‡‡“—‹–›•Šƒ”‡Š‘Ž†‡”ƒ†
’”‡ˆ‡”‡…‡•Šƒ”‡Š‘Ž†‡”–Šƒ––Š‡Žƒ–‡”‰‡–•†‹˜‹†‡†ƒ–ƒˆ‹šœ‡†”ƒ–‡ǤŠ‹•†‹˜‹†‡†Šƒ†–‘„‡’ƒ‹†–‘
–Š‡‹˜‡•–‘”„‡ˆ‘”‡†‹˜‹†‡†…ƒ„‡’ƒ‹†–‘‡“—‹–›•Šƒ”‡Š‘Ž†‡”•Ǥ–Š‡‡˜‡–‘ˆŽ‹“—‹†ƒ–‹‘‘ˆ–Š‡
…‘’ƒ›ǡ–Š‡…Žƒ‹–‘–Š‡…‘’ƒ›ǯ••—”’Ž—•™‹ŽŽ„‡Š‹‰Š‡”’ˆ–Š‡Š‘Ž†‡”•‘ˆ”‡ˆ‡”…‡•Šƒ”‡•–Šƒ
–Šƒ–‘ˆ–Š‡‡“—‹–›Š‘Ž†‡”•ǡ„—–Š‘™‡˜‡”ǡ„‡Ž‘™–Š‡…Žƒ‹•‘ˆ–Š‡…‘’ƒ›ǯ•…”‡†‹–‘”•ǡ„‘†Š‘Ž†‡”•Ȁ
†‡„‡–—”‡ Š‘Ž†‡”•Ǥ  Š‹• ‡ƒ• –Šƒ– ‹ˆ ƒ …‘’ƒ› ‹• Ž‹“—‹†ƒ–‡†ǡ –Š‡ ’ƒ›‡– ™‹ŽŽ „‡ †‘‡ ‹ –Š‡
ˆ‘ŽŽ‘™‹‰‘”†‡”ǣ
”‡†‹–‘”ǯ•՜‡„‡–—”‡Ȁ‘†‘Ž†‡”•՜”‡ˆ‡”‡…‡•Šƒ”‡Š‘Ž†‡”ǯ•՜“—‹–›Šƒ”‡‘Ž†‡”•
Derivative Instruments & Derivative Markets
‡”‹˜ƒ–‹˜‡• ƒ”‡ ’”‘†—…–• ™Š‘•‡ ˜ƒŽ—‡ ‹• †‡”‹˜‡† ˆ”‘ –Š‡ ˜ƒŽ—‡ ‘ˆ ‘‡ ‘” ‘”‡ „ƒ•‹… ˜ƒ”‹ƒ„Ž‡•ǡ
™Š‹…Šƒ”‡ …ƒŽŽ‡††‡”Ž›‹‰••‡–•ǤŠ‡ —†‡”Ž›‹‰ƒ••‡–…ƒ„‡‡“—‹–›ǡ‹†‡šǡˆ‘”‡‹‰‡š…Šƒ‰‡
ȋ ‘”‡šȌǡ…‘‘†‹–›‘”ƒ›‘–Š‡”ƒ••‡–ǤŠ‹•‡ƒ•–Šƒ–ƒ›‹•–”—‡––Šƒ–†‡”‹˜‡•‹–•˜ƒŽ—‡‘‹–•
—†‡”Ž›‹‰‡“—‹–›ǡ‹†‡šǡˆ‘”‡‹‰‡š…Šƒ‰‡ȋ ‘”‡šȌǡ…‘‘†‹–›‘”ƒ›‘–Š‡”ƒ••‡–ǡ‹•ƒ‡”‹˜ƒ–‹˜‡
•–”—‡–Ǥ
Ž‡ƒ•‡ ‘–‡ –Šƒ– †‡”‹˜ƒ–‹˜‡ ’”‘†—…–• ‹‹–‹ƒŽŽ› ‡‡”‰‡† ƒ• Š‡†‰‹‰ †‡˜‹…‡• ƒ‰ƒ‹•– ˆŽ—…–—ƒ–‹‘• ‹
…‘‘†‹–›’”‹…‡•ƒ†…‘‘†‹–›-Ž‹‡††‡”‹˜ƒ–‹˜‡•”‡ƒ‹‡†–Š‡•‘Ž‡ˆ‘”‘ˆ•—…Š’”‘†—…–•ˆ‘”
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

ƒŽ‘•––Š”‡‡Š—†”‡†›‡ƒ”•Ǥ—–ƒˆ–‡”ͳͻ͹Ͳ•ǡ–Š‡ˆ‹ƒ…‹ƒŽ†‡”‹˜ƒ–‹˜‡•…ƒ‡‹–‘•’‘–Ž‹‰Š––Šƒ•–‘
–Š‡ ‰”‘™‹‰ ‹•–ƒ„‹Ž‹–› ‹ –Š‡ ˆ‹ƒ…‹ƒŽ ƒ”‡–•Ǥ ‘™‡˜‡”ǡ •‹…‡ –Š‡‹” ‡‡”‰‡…‡ǡ –Š‡•‡ ’”‘†—…–•
Šƒ˜‡„‡…‘‡˜‡”›’‘’—Žƒ”ƒ†„›ͳͻͻͲ•ǡ–Š‡›ƒ……‘—–‡†ˆ‘”ƒ„‘—––™‘–Š‹”†•‘ˆ–‘–ƒŽ–”ƒ•ƒ…–‹‘•
‹†‡”‹˜ƒ–‹˜‡’”‘†—…–•Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

23|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Types of Derivatives
Š‡†‡”‹˜ƒ–‹˜‡•…ƒ„‡Forwards‘” —–—”‡•‘”Options‘”WarrantsǤ
‘”™ƒ”†& —–—”‡‘–”ƒ…–ǣˆ‘”™ƒ”†…‘–”ƒ…–‹•ƒ…—•–‘‹œ‡†…‘–”ƒ…–„‡–™‡‡–™‘’ƒ”–‹‡•–‘
„—›‘”•‡ŽŽƒƒ••‡–ƒ–ƒ•’‡…‹ˆ‹‡†ˆ—–—”‡–‹‡ƒ–ƒ’”‹…‡ƒ‰”‡‡†—’‘–‘†ƒ›Ǥ —–—”‡•…‘–”ƒ…–•ƒ”‡
•’‡…‹ƒŽ –›’‡• ‘ˆ ˆ‘”™ƒ”† …‘–”ƒ…–• ‹ –Š‡ •‡•‡ –Šƒ– –Š‡› ƒ”‡ •–ƒ†ƒ”†‹œ‡† ‡š…Šƒ‰‡-–”ƒ†‡†
…‘–”ƒ…–•ǡ•—…Šƒ•ˆ—–—”‡•‘ˆ–Š‡‹ˆ–›‹†‡šǤ
’–‹‘•ǣ  ’–‹‘ ‹• ƒ …‘–”ƒ…– ™Š‹…Š ‰‹˜‡• –Š‡ ”‹‰Š–ǡ „—– ‘– ƒ ‘„Ž‹‰ƒ–‹‘ǡ –‘ „—› ‘” •‡ŽŽ –Š‡
—†‡”Ž›‹‰ƒ–ƒ•–ƒ–‡††ƒ–‡ƒ†ƒ–ƒ•–ƒ–‡†’”‹…‡ǤŠ‹Ž‡ƒ„—›‡”‘ˆƒ‘’–‹‘’ƒ›•–Š‡’”‡‹—ƒ†
„—›• –Š‡ ”‹‰Š– –‘ ‡š‡”…‹•‡ Š‹• ‘’–‹‘ǡ –Š‡ ™”‹–‡” ‘ˆ ƒ ‘’–‹‘ ‹• –Š‡ ‘‡ ™Š‘ ”‡…‡‹˜‡• –Š‡ ‘’–‹‘
’”‡‹—ƒ†–Š‡”‡ˆ‘”‡‘„Ž‹‰‡†–‘•‡ŽŽȀ„—›–Š‡ƒ••‡–‹ˆ–Š‡„—›‡”‡š‡”…‹•‡•‹–‘Š‹Ǥ
’–‹‘•ƒ”‡‘ˆ–™‘–›’‡•-ƒŽŽ•ƒ†—–•‘’–‹‘•Ǥ
o ‘Calls’ ‰‹˜‡ –Š‡ „—›‡” –Š‡ ”‹‰Š– „—– ‘– –Š‡ ‘„Ž‹‰ƒ–‹‘ –‘ „—› ƒ ‰‹˜‡ “—ƒ–‹–› ‘ˆ –Š‡
—†‡”Ž›‹‰ƒ••‡–ǡƒ–ƒ‰‹˜‡’”‹…‡‘‘”„‡ˆ‘”‡ƒ‰‹˜‡ˆ—–—”‡†ƒ–‡Ǥ
o ‘Puts’ ‰‹˜‡ –Š‡ „—›‡” –Š‡ ”‹‰Š–ǡ „—– ‘– –Š‡ ‘„Ž‹‰ƒ–‹‘ –‘ •‡ŽŽ ƒ ‰‹˜‡ “—ƒ–‹–› ‘ˆ —†‡”Ž›‹‰
ƒ••‡– ƒ– ƒ ‰‹˜‡ ’”‹…‡ ‘ ‘” „‡ˆ‘”‡ ƒ ‰‹˜‡ ˆ—–—”‡ †ƒ–‡Ǥ Ž‡ƒ•‡ ‘–‡ –Šƒ– ‘’–‹‘• ‰‡‡”ƒŽŽ›
Šƒ˜‡ Ž‹˜‡• ‘ˆ —’ –‘ ‘‡ ›‡ƒ”Ǥ Š‡ ƒŒ‘”‹–› ‘ˆ ‘’–‹‘• –”ƒ†‡† ‘ ‡š…Šƒ‰‡• Šƒ˜‡ ƒš‹—
ƒ–—”‹–›‘ˆ‹‡‘–Š•Ǥ‘‰‡”†ƒ–‡†‘’–‹‘•ƒ”‡…ƒŽŽ‡†ƒ””ƒ–•ƒ†ƒ”‡‰‡‡”ƒŽŽ›–”ƒ†‡†
over-–Š‡…‘—–‡”Ǥ
Basic Terms
‡•—’’‘•‡–Šƒ–—”‡•Š™ƒ–•–‘„—›ƒŠ‘—•‡‹‡š–›‡ƒ”…–‘„‡”Ǥ––Š‡•ƒ‡–‹‡ǡƒ‡•ŠŠƒ•ƒ
Š‘—•‡™‘”–Š•ǤͳͷƒŠƒ†Š‡’Žƒ•–‘•‡ŽŽ‹–‹…–‘„‡”‡š–›‡ƒ”Ǥ‹…‡–Š‡…—””‡–’”‹…‡‹••Ǥͳͷ
ƒŠǡƒ‡•Šƒ†—”‡•Š‡–‡”‹–‘ƒƒ‰”‡‡‡–˜‹ƒ™Š‹…Š—”‡•Š™‹ŽŽ„—›–Šƒ–Š‘—•‡‹…–‘„‡”
ʹͲͳ͵ ‹ •Ǥ ͳ͹ ƒŠǤ Š‹• ™‘—Ž† „‡ …ƒŽŽ‡† ƒ ‘”™ƒ”† ‘–”ƒ…–Ǥ Š‡ ’”‹…‡ ƒ‰”‡‡† —’‘ ™‘—Ž† „‡
…ƒŽŽ‡†‡Ž‹˜‡”›’”‹…‡Ǥ‹…‡—”‡•Š‹•„—›‹‰‹–ǡˆ‘”Š‹ǡ‹–™‘—Ž†„‡…ƒŽŽ‡†‘‰ ‘”™ƒ”†‘–”ƒ…–Ǥ
–Š‡‘–Š‡”•‹†‡ǡƒ‡•Š‹••‡ŽŽ‹‰‹–Ǣ‹–™‘—Ž†„‡…ƒŽŽ‡†Š‘”– ‘”™ƒ”†‘–”ƒ…–Ǥ
‘™ǡ™‡•—’’‘•‡–Šƒ–‹‡š–›‡ƒ”…–‘„‡”ǡ‹•–‡ƒ†‘ˆ•Ǥͳ͹ƒŠǡ–Š‡ƒ”‡–’”‹…‡‘ˆ–Šƒ–Š‘—•‡
„‡…‘‡••ǤʹͲƒŠǤ‹…‡ƒ‡•Š‹•ƒŽ”‡ƒ†›‹…‘–”ƒ…–™‹–Š—”‡•Š–‘•‡ŽŽŠ‹–Š‡Š‘—•‡‹•Ǥ
ͳ͹ƒŠǡ—”‡•Š™‘—Ž†‡ƒ”ƒ’”‘ˆ‹–‘ˆ•Ǥ͵ŽƒŠǤƒ‡•Š™‘—Ž†Ž‘•‡•Ǥ͵ƒŠǤ‡”‡™‡‘–‡–Šƒ–
ˆ‘”™ƒ”†…‘–”ƒ…–‹•‹…‘–”ƒ•–™‹–Š–Š‡Spo–…‘–”ƒ…–Ǥ’‘–…‘–”ƒ…–‹•ƒƒ‰”‡‡‡––‘„—›‘”•‡ŽŽ
ƒƒ••‡––‘†ƒ›Ǥ
Th‡”‡ ‹• ‘‡ ‘”‡ –‡” ”‡Žƒ–‡† –‘ ‘”™ƒ”† ‘–”ƒ…–• …ƒŽŽ‡† NDF ‘” Non-‡Ž‹˜‡”ƒ„Ž‡ ‘”™ƒ”†Ǥ
Non-†‡Ž‹˜‡”ƒ„Ž‡ ˆ‘”™ƒ”†• ƒ”‡ ‘˜‡”-the-…‘—–‡” –”ƒ•ƒ…–‹‘• •‡––Ž‡† ‘– „› †‡Ž‹˜‡”› „—– „›
‡š…Šƒ‰‡ ‘ˆ –Š‡ †‹ˆˆ‡”‡…‡ „‡–™‡‡ –Š‡ …‘–”ƒ…–‡† ”ƒ–‡ ƒ† •‘‡ ”‡ˆ‡”‡…‡ ”ƒ–‡ •—…Š ƒ• –Š‡ ‘‡
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

ˆ‹š‡† „› –Š‡ ‡•‡”˜‡ ƒ ‘ˆ †‹ƒǤ ‘” ‡šƒ’Ž‡ǡ ‹ˆ ƒ‡•Š ’ƒ›• —”‡•Š •Ǥ ͵ ƒŠ ™‹–Š‘—–
†‡Ž‹˜‡”‹‰–Š‡ƒ…–—ƒŽŠ‘—•‡ǡ‹–™‘—Ž†„‡…ƒŽŽ‡† ǤŠ‡•ƒ‡‹•„ƒ•‹…fundaˆ‘”…‘‘†‹–›ˆ‘”™ƒ”†
…‘–”ƒ…–•ƒ†…—””‡…›ˆ‘”™ƒ”†…‘–”ƒ…–•Ǥ
–Š‹•ƒ”–‹…Ž‡ǡ™‡ƒ”‡†‹•…—••‹‰ƒ„‘—––Š‡ ‘”™ƒ”†•…‘–”ƒ…–•”‡Žƒ–‡†–‘‘‘†‹–‹‡•‹†‹ƒǤ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

24|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Role of Future Markets in Economy

Š‡”‡ƒ”‡–™‘‹’‘”–ƒ–”‘Ž‡•‘ˆ–Š‡ —–—”‡•ƒ”‡–•Ǥ
o ”‹…‡‹•…‘˜‡”›ǣ”‹…‡†‹•…‘˜‡”›‹•–Š‡’”‘…‡••‘ˆ†‡–‡”‹‹‰–Š‡’”‹…‡‘ˆƒƒ••‡–‹–Š‡
ƒ”‡–’Žƒ…‡ –Š”‘—‰Š –Š‡ ‹–‡”ƒ…–‹‘• ‘ˆ „—›‡”• ƒ† •‡ŽŽ‡”•Ǥ Š‡ ˆ‘”™ƒ”† ƒ”‡–• ’”‘˜‹†‡
–Š‡ …‘ŽŽ‡…–‹˜‡ ƒ••‡••‡– ‘ˆ ƒ Žƒ”‰‡ —„‡” ‘ˆ ‹†‹˜‹†—ƒŽ ƒ”‡– ’ƒ”–‹…‹’ƒ–• ƒ„‘—– –Š‡
†‹”‡…–‹‘ƒ†’”‹…‡–”‡†•‘ˆƒ…‘‘†‹–›‹ˆ—–—”‡ǤŠ‡’”‹…‡†‹•…‘˜‡”›‹•ƒˆˆ‡…–‡†„›–Š‡
‹–‡”ƒŽ ‘™Ž‡†‰‡ ƒ„‘—– –Š‡ Ž‹‡Ž› ’”‘†—…–‹‘ǡ …”‘’ •‹œ‡ǡ ™‡ƒ–Š‡” ’”‘Œ‡…–‹‘• ‡–… ‘ˆ –Š‡
„—›‡”•ƒ†•‡ŽŽ‡”•Ǥ
o Š‡ „‡‡ˆ‹– ‘ˆ ˆ‘”™ƒ”†• ‹• –Šƒ– –Š‡ ’”‘†—…‡”• ‘ˆ …‘‘†‹–‹‡• •—…Š ƒ• ˆƒ”‡”• …ƒ ’Žƒ
’”‘†—…–‹‘ƒ†–‘•Š‹ˆ–ƒ…”‡ƒ‰‡‘”’”‘†—…–‹‘ˆƒ…‹Ž‹–‹‡•ˆ”‘‘‡…‘‘†‹–›–‘ƒ‘–Š‡”ǤŠ‡
ˆ‹‰Š–ˆ‘”ƒ…”‡ƒ‰‡„‡–™‡‡™Š‡ƒ–ǡ•‘›ƒ„‡ƒƒ†…‘”‹•ƒ‡šƒ’Ž‡‘ˆ–Š‡†‡ƒ†ˆ‘”‡…ƒ•–
‰‹˜‡„›ˆ—–—”‡•ƒ‰ƒ‹•––Š‡„ƒ…†”‘’‘ˆ…‘’Ž‡š‹–‡”’Žƒ›‘ˆˆ‘”…‡•Ž‹‡„›ˆ‘”…‡•„‹‘-ˆ—‡Ž
demandǡ‡ƒ–…‘•—’–‹‘ȋ‰‹˜‹‰”‹•‡–‘Žƒ”‰‡”—–‹Ž‹œƒ–‹‘‘ˆˆ‡‡†–‘ƒ‹ƒŽ•-‹–—”Žƒ”‰‡”
†‡ƒ†Ȍ‡–…Ǥ
o ‡†‰‹‰‘ˆ’”‹…‡‹•ǣ‹ˆƒ’”‘†—…‡”‘”„—›‡”Šƒ•ƒ‰‡‡”ƒŽ•‡•‡‘ˆ–Š‡Ž‹‡Ž›ˆ—–—”‡’”‹…‡ǡ
–Š‡ Š‡ …ƒ Ž‘… –Š‡ ’”‘†—…‡ •‘ –Šƒ– Š‹• ”‹• ‘ˆ ’”‹…‡ ‘” ˆ‘” –Šƒ– ƒ––‡” ƒ˜ƒ‹Žƒ„‹Ž‹–› ‹•
mitigated.
‘™‡˜‡”ǡ ’‡…—Žƒ–‘”• ƒ”‡ ‘‡ ‘ˆ –Š‡ „‹‰‰‡•– •‡‰‡– ‘ˆ ˆ—–—”‡ ƒ”‡–• ’ƒ”–‹…‹’ƒ–•Ǥ Š‡
•’‡…—Žƒ–‹˜‡‹˜‡•–‘”•’‘—”–Š‡‹”‘‡›‹–‘–Š‡ˆ—–—”‡•ƒ”‡–•ƒ†–Š—•ƒ”‡Š‡Ž†”‡•’‘•‹„Ž‡ˆ‘”
‹…”‡ƒ•‡†˜‘Žƒ–‹Ž‹–›‹…‘‘ditiesǤ
ƒ›…ƒ•‡ǡ–Š‡•‘…‹ƒŽ—–‹Ž‹–›‘ˆˆ—–—”‡•ƒ”‡–•‹•…‘•‹†‡”‡†–‘„‡ƒ‹Ž›‹–Š‡–”ƒ•ˆ‡”‘ˆ”‹•ǡ
ƒ†‹…”‡ƒ•‡†Ž‹“—‹†‹–›„‡–™‡‡–”ƒ†‡”•™‹–Š†‹ˆˆ‡”‡–”‹•ƒ†–‹‡’”‡ˆ‡”‡…‡•Ǥ‘™‡˜‡”ǡ‹–†‘‡•
‘––ƒ‡—…Š–‹‡–‘…‘˜‡”––Š‡Š‡†‰‡”‹–‘ƒ•’‡…—Žƒ–‘”Ǥ
Option Premium’
––Š‡–‹‡‘ˆ„—›‹‰ƒ‘’–‹‘…‘–”ƒ…–ǡ–Š‡„—›‡”Šƒ•–‘’ƒ›’”‡‹—ǤŠ‡’”‡‹—‹•–Š‡’”‹…‡
ˆ‘” ƒ…“—‹”‹‰ –Š‡ ”‹‰Š– –‘ „—› ‘” •‡ŽŽǤ – ‹• ’”‹…‡ ’ƒ‹† „› –Š‡ ‘’–‹‘ „—›‡” –‘ –Š‡ ‘’–‹‘ •‡ŽŽ‡” ˆ‘”
ƒ…“—‹”‹‰–Š‡”‹‰Š––‘„—›‘”•‡ŽŽǤ’–‹‘’”‡‹—•ƒ”‡ƒŽ™ƒ›•’ƒ‹†—’ˆ”‘–Ǥ
Chapter 3. Commodity Futures
 ‘”™ƒ”†‘–”ƒ…–•ȋ‡‰—Žƒ–‹‘Ȍ…–ǡͳͻͷʹ†‡ˆ‹‡•Dz‰‘‘†•dzƒ•Dz‡˜‡”›‹†‘ˆ‘˜ƒ„Ž‡’”‘’‡”–›
‘–Š‡”–Šƒƒ…–‹‘ƒ„Ž‡…Žƒ‹•ǡ‘‡›ƒ†•‡…—”‹–‹‡•dzǤ —–—”‡•ǯ–”ƒ†‹‰‹•‘”‰ƒ‹œ‡†‹•—…Š‰‘‘†•‘”
…‘‘†‹–‹‡• ƒ• ƒ”‡ ’‡”‹––‡† „› –Š‡ ‡–”ƒŽ
‘˜‡”‡–Ǥ – ’”‡•‡–ǡ ƒŽŽ ‰‘‘†• ƒ† ’”‘†—…–• ‘ˆ
ƒ‰”‹…—Ž–—”ƒŽȋ‹…Ž—†‹‰’Žƒ–ƒ–‹‘Ȍǡ‹‡”ƒŽƒ†ˆ‘••‹Ž‘”‹‰‹ƒ”‡ƒŽŽ‘™‡†ˆ‘”ˆ—–—”‡•–”ƒ†‹‰—†‡”
–Š‡ƒ—•’‹…‡•‘ˆ–Š‡…‘‘†‹–›‡š…Šƒ‰‡•”‡…‘‰‹œ‡†—†‡”–Š‡ Ǥ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

‘‘†‹–›†‡”‹˜ƒ–‹˜‡•ƒ”‡––”ƒ†‡…‘–”ƒ…–•ˆ‘”™Š‹…Š–Š‡—†‡”Ž›‹‰ƒ••‡–‹•…‘‘†‹–›Ǥ–…ƒ
„‡ ƒ ƒ‰”‹…—Ž–—”ƒŽ …‘‘†‹–› Ž‹‡ ™Š‡ƒ–ǡ •‘›„‡ƒ•ǡ ”ƒ’‡•‡‡†ǡ …‘––‘ǡ ‡–… ‘” ’”‡…‹‘—• ‡ –ƒŽ• Ž‹‡
‰‘Ž†ǡ•‹Ž˜‡”ǡ‡–…Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

25|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

History of Commodity Forward Contracts

o ‘—”…‘—–”›ǡ–Š‡‘‘†‹–› —–—”‡•ƒ”‡–†ƒ–‡•„ƒ…–‘‘”‡–Šƒƒ…‡–—”›ǤŠ‡ˆ‹”•–
‘”‰ƒ‹œ‡†ˆ—–—”‡•ƒ”‡–™ƒ•‡•–ƒ„Ž‹•Š‡†‹ͳͺ͹ͷǡ—†‡”–Š‡ƒ‡‘ˆ̵‘„ƒ›‘––‘”ƒ†‡
••‘…‹ƒ–‹‘̵ –‘ –”ƒ†‡ ‹ …‘––‘ †‡”‹˜ƒ–‹˜‡ …‘–”ƒ…–•Ǥ Š‹• ™ƒ• ˆ‘ŽŽ‘™‡† „› ‹•–‹–—–‹‘• ˆ‘”
ˆ—–—”‡•–”ƒ†‹‰‹‘‹Ž•‡‡†•ǡˆ‘‘†‰”ƒ‹•ǡ‡–…Ǥ
o Š‡ˆ—–—”‡•ƒ”‡–‹†‹ƒ—†‡”™‡–”ƒ’‹†‰”‘™–Š„‡–™‡‡–Š‡’‡”‹‘†‘ˆ ‹”•–ƒ†‡…‘†
‘”Ž† ƒ”Ǥ • ƒ ”‡•—Ž–ǡ „‡ˆ‘”‡ –Š‡ ‘—–„”‡ƒ ‘ˆ –Š‡ ‡…‘† ‘”Ž† ƒ”ǡ ƒ Žƒ”‰‡ —„‡” ‘ˆ
com‘†‹–› ‡š…Šƒ‰‡• –”ƒ†‹‰ ˆ—–—”‡• …‘–”ƒ…–• ‹ •‡˜‡”ƒŽ …‘‘†‹–‹‡• Ž‹‡ …‘––‘ǡ
‰”‘—†—–ǡ ‰”‘—†—– ‘‹Žǡ ”ƒ™ Œ—–‡ǡ Œ—–‡ ‰‘‘†•ǡ …ƒ•–‘”•‡‡†ǡ ™Š‡ƒ–ǡ ”‹…‡ǡ •—‰ƒ”ǡ ’”‡…‹‘—•
‡–ƒŽ•Ž‹‡‰‘Ž†ƒ†•‹Ž˜‡”™‡”‡ˆŽ‘—”‹•Š‹‰–Š”‘—‰Š‘—––Š‡…‘—–”›Ǥ˜‹‡™‘ˆ–Š‡deli…ƒ–‡
•—’’Ž› •‹–—ƒ–‹‘ ‘ˆ ƒŒ‘” …‘‘†‹–‹‡• ‹ –Š‡ „ƒ…†”‘’ ‘ˆ ™ƒ” ‡ˆˆ‘”–• ‘„‹Ž‹œƒ–‹‘ǡ ˆ—–—”‡•
–”ƒ†‹‰…ƒ‡–‘„‡’”‘Š‹„‹–‡††—”‹‰–Š‡‡…‘†‘”Ž†ƒ”—†‡”–Š‡‡ˆ‡…‡‘ˆ†‹ƒ…–Ǥ
o ˆ–‡” †‡’‡†‡…‡ǡ ‡•’‡…‹ƒŽŽ› ‹ –Š‡ •‡…‘† ŠƒŽˆ ‘ˆ –Š‡ ͳͻͷͲ• ƒ† ˆ‹”•– ŠƒŽˆ ‘ˆ ͳͻ͸Ͳ•ǡ –Š‡
…‘‘†‹–› ˆ—–—”‡• –”ƒ†‹‰ ƒ‰ƒ‹ ’‹…‡† —’ ƒ† –Š‡”‡ ™‡”‡ –Š”‹˜‹‰ …‘‘†‹–› ƒ”‡–•Ǥ
‘™‡˜‡”ǡ ‹ mid-ͳͻ͸Ͳ•ǡ …‘‘†‹–› ˆ—–—”‡• –”ƒ†‹‰ ‹ ‘•– ‘ˆ –Š‡ …‘‘†‹–‹‡• ™ƒ•
bannedƒ†ˆ—–—”‡•–”ƒ†‹‰…‘–‹—‡†‹–™‘‹‘”…‘‘†‹–‹‡•ǡ˜‹œǡ’‡’’‡”ƒ†–—”‡”‹…Ǥ
Commodity Exchange
‘‘†‹–› š…Šƒ‰‡ ‹• ƒ ƒ••‘…‹ƒ–‹‘ǡ ‘” ƒ …‘’ƒ› ‘ˆ ƒ› ‘–Š‡” „‘†› …‘”’‘”ƒ–‡ ‘”‰ƒ‹œ‹‰
ˆ—–—”‡•–”ƒ†‹‰‹…‘‘†‹–‹‡•Ǥƒ™‹†‡”•‡•‡ǡ‹–‹•–ƒ‡–‘‹…Ž—†‡ƒ›‘”‰ƒ‹œ‡†ƒ”‡–’Žƒ…‡
™Š‡”‡ –”ƒ†‡ ‹• ”‘—–‡† –Š”‘—‰Š ‘‡ ‡…Šƒ‹•ǡ ƒŽŽ‘™‹‰ ‡ˆˆ‡…–‹˜‡ …‘’‡–‹–‹‘ ƒ‘‰ „—›‡”• ƒ†
ƒ‘‰•‡ŽŽ‡”•––Š‹•™‘—Ž†‹…Ž—†‡ƒ—…–‹‘-–›’‡‡š…Šƒ‰‡•ǡ„—–‘–™Š‘Ž‡•ƒŽ‡ƒ”‡–•ǡ™Š‡”‡–”ƒ†‡
‹•Ž‘…ƒŽ‹œ‡†ǡ„—–‡ˆˆ‡…–‹˜‡Ž›–ƒ‡•’Žƒ…‡–Š”‘—‰Šƒ›‘-”‡Žƒ–‡†‹†‹˜‹†—ƒŽ–”ƒ•ƒ…–‹‘•„‡–™‡‡
†‹ˆˆ‡”‡–’‡”—–ƒ–‹‘•‘ˆ„—›‡”•ƒ†•‡ŽŽ‡”•Ǥ
Difference between Commodity and Financial derivatives
Š‡„ƒ•‹……‘…‡’–‘ˆƒ†‡”‹˜ƒ–‹˜‡…‘–”ƒ…–”‡ƒ‹•–Š‡•ƒ‡™Š‡–Š‡”–Š‡—†‡”Ž›‹‰Šƒ’’‡•–‘„‡
ƒ …‘‘†‹–› ‘” ƒ ˆ‹ƒ…‹ƒŽ ƒ••‡–Ǥ ‘™‡˜‡” –Š‡”‡ ƒ”‡ •‘‡ ˆ‡ƒ–—”‡• ™Š‹…Š ƒ”‡ ˜‡”› ’‡…—Ž‹ƒ” –‘
…‘‘†‹–›†‡”‹˜ƒ–‹˜‡ƒ”‡–•Ǥ–Š‡…ƒ•‡‘ˆˆ‹ƒ…‹ƒŽ†‡”‹˜ƒ–‹˜‡•ǡ‘•–‘ˆ–Š‡•‡…‘–”ƒ…–•ƒ”‡…ƒ•Š
•‡––Ž‡†Ǥ ˜‡ ‹ –Š‡ …ƒ•‡ ‘ˆ ’Š›•‹…ƒŽ •‡––Ž‡‡–ǡ ˆ‹ƒ…‹ƒŽ ƒ••‡–• ƒ”‡ ‘– „—Ž› ƒ† †‘ ‘– ‡‡†
•’‡…‹ƒŽˆƒ…‹Ž‹–›ˆ‘”•–‘”ƒ‰‡Ǥ—‡–‘–Š‡„—Ž›ƒ–—”‡‘ˆ–Š‡—†‡”Ž›‹‰ƒ••‡–•ǡ’Š›•‹…ƒŽ•‡––Ž‡‡–‹
…‘‘†‹–›†‡”‹˜ƒ–‹˜‡•…”‡ƒ–‡•–Š‡‡‡†ˆ‘”™ƒ”‡Š‘—•‹‰Ǥ‹‹Žƒ”Ž›ǡ–Š‡…‘…‡’–‘ˆ˜ƒ”›‹‰“—ƒŽ‹–›
‘ˆƒ••‡–†‘‡•‘–”‡ƒŽŽ›‡š‹•–ƒ•ˆƒ”ƒ•ˆ‹ƒ…‹ƒŽ—†‡”Ž›‹‰•ƒ”‡…‘…‡”‡†Ǥ‘™‡˜‡”‹–Š‡…ƒ•‡‘ˆ
…‘‘†‹–‹‡•ǡ–Š‡“—ƒŽ‹–›‘ˆ–Š‡ƒ••‡–—†‡”Ž›‹‰ƒ…‘–”ƒ…–…ƒ˜ƒ”›ƒ––‹‡•Ǥ
Badla System
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com
120.56.225.142

ƒ†Žƒ›•–‡‹•ƒ‘—–†ƒ–‡††‹ƒ–‡”ˆ‘”ƒ–”ƒ†‹‰•›•–‡™‹–Šƒ‡…Šƒ‹•ˆ‘”†‡ˆ‡””‹‰‡‹–Š‡”
’ƒ›‡–ˆ‘”•Šƒ”‡•’—”…Šƒ•‡†‘”†‡Ž‹˜‡”›‘ˆ•Šƒ”‡••‘Ž†ǤŠ‡•›•–‡ǡ†‹•…‘–‹—‡†„›–Š‡‡…—”‹–‹‡•
ƒ† š…Šƒ‰‡ ‘ƒ”† ‘ˆ †‹ƒ ȋȌǡ ˆ”‘ Ma”…Š ͳͻͻͶǡ ™ƒ• ƒ’’Ž‹…ƒ„Ž‡ –‘ ƒ ‰”‘—’ ‘” Ǯ’‡…‹ˆ‹‡†ǯ
•Šƒ”‡•Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

26|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Chapter 4. Legislations that control the securities market

ƒŒ‘” Ž‡‰‹•Žƒ–‹‘• –Šƒ– …‘–”‘Ž –Š‡ •‡…—”‹–‹‡• ƒ”‡–  ƒ”‡ –Š‡  …–ǡ ͳͻͻʹǡ –Š‡ ‘’ƒ‹‡• …–ǡ
ͳͻͷ͸ǡ‡…—”‹–‹‡•‘–”ƒ…–•ȋ‡‰—Žƒ–‹‘Ȍ…–ǡͳͻͷ͸ǡ‡’‘•‹–‘”‹‡•…–ǡͳͻͻ͸Ƭ”‡˜‡–‹‘‘ˆ‘‡›
ƒ—†‡”‹‰ …–ǡ ʹͲͲʹǤ Ž‡ƒ•‡ ‘–‡ –Šƒ– ’”‡˜‹‘—•Ž› ™‡ Šƒ† ƒ ”‹–‹•Š ”ƒ Ž‡‰‹•Žƒ–‹‘ ƒ’‹–ƒŽ ••—‡•
ȋ‘–”‘ŽȌ …–ǡ ͳͻͶ͹ǡ ™Š‹…Š Šƒ• „‡‡ ”‡’‡ƒŽ‡† ‘™Ǥ ‡”‡ ƒ”‡ •‘‡ ‹’‘”–ƒ– ’‘‹–• ƒ„‘—– –Š‡•‡
legislations.
Capital Issues (Control) Act, 1947:
”‹‰‹‘ˆ–Š‹•ƒ…–„‡‰‹•ˆ”‘™ƒ”•‹–—ƒ–‹‘‹ͳͻͶ͵™Š‡–Š‡‘„Œ‡…–‹˜‡™ƒ•–‘…Šƒ‡Ž”‡•‘—”…‡•–‘
•—’’‘”– –Š‡ ™ƒ” ‡ˆˆ‘”–Ǥ ƒ–‡” –Š‡ ƒ…– ™ƒ• ”‡–ƒ‹‡† ™‹–Š •‘‡ ‘†‹ˆ‹…ƒ–‹‘• ƒ• ƒ ‡ƒ• ‘ˆ
…‘–”‘ŽŽ‹‰ –Š‡ ”ƒ‹•‹‰ ‘ˆ …ƒ’‹–ƒŽ „› …‘’ƒ‹‡• ƒ† –‘ ‡•—”‡ –Šƒ– ƒ–‹‘ƒŽ ”‡•‘—”…‡• ™‡”‡
…Šƒ‡ŽŽ‡† ‹–‘ ’”‘’‡” Ž‹‡•ǡ ‹Ǥ‡Ǥ ˆ‘” †‡•‹”ƒ„Ž‡ ’—”’‘•‡• –‘ •‡”˜‡ ‰‘ƒŽ• ƒ† ’”‹‘”‹–‹‡• ‘ˆ –Š‡
‰‘˜‡”‡–ǡƒ†–‘’”‘–‡…––Š‡‹–‡”‡•–•‘ˆ‹˜‡•–‘”•Ǥ
• ’‡” –Š‹• ƒ…–ǡ  ƒ› ˆ‹” ™‹•Š‹‰ –‘ ‹••—‡ •‡…—”‹–‹‡• Šƒ† –‘ ‘„–ƒ‹ ƒ’’”‘˜ƒŽ ˆ”‘ –Š‡ ‡–”ƒŽ

‘˜‡”‡–ǡ ™Š‹…Š ƒŽ•‘ †‡–‡”‹‡† –Š‡ ƒ‘—–ǡ –›’‡ ƒ† ’”‹…‡ ‘ˆ –Š‡ ‹••—‡Ǥ • ƒ ’ƒ”– ‘ˆ –Š‡
Ž‹„‡”ƒŽ‹•ƒ–‹‘’”‘…‡••ǡ–Š‡…–™ƒ•”‡’‡ƒŽ‡†‹ͳͻͻʹǤ
SEBI Act, 1992:
™ƒ•‡•–ƒ„Ž‹•Š‡†ƒ†‡’‘™‡”‡†•–ƒ–—–‘”›’‘™‡”•ˆ‘”ȋƒȌ’”‘–‡…–‹‰–Š‡‹–‡”‡•–•‘ˆ‹˜‡•–‘”•
‹ •‡…—”‹–‹‡•ǡ ȋ„Ȍ ’”‘‘–‹‰ –Š‡ †‡˜‡Ž‘’‡– ‘ˆ –Š‡ •‡…—”‹–‹‡• ƒ”‡–ǡ ƒ† ȋ…Ȍ ”‡‰—Žƒ–‹‰ –Š‡
•‡…—”‹–‹‡•ƒ”‡–Ǥ
—”‹•†‹…–‹‘‘ˆ‡š–‡†•‘˜‡”…‘”’‘”ƒ–‡•‹–Š‡‹••—ƒ…‡‘ˆ…ƒ’‹–ƒŽƒ†–”ƒ•ˆ‡”‘ˆ•‡…—”‹–‹‡•ǡ‹
ƒ††‹–‹‘ –‘ ƒŽŽ ‹–‡”‡†‹ƒ”‹‡• ƒ† ’‡”•‘• ƒ••‘…‹ƒ–‡† ™‹–Š •‡…—”‹–‹‡• ƒ”‡–Ǥ – …ƒ …‘†—…–
‡“—‹”‹‡•ǡ ƒ—†‹–• ƒ† ‹•’‡…–‹‘ ‘ˆ ƒŽŽ …‘…‡”‡† ƒ† ƒ†Œ—†‹…ƒ–‡ ‘ˆˆ‡…‡• —†‡” –Š‡ …–Ǥ – Šƒ•
’‘™‡”• –‘ ”‡‰‹•–‡” ƒ† ”‡‰—Žƒ–‡ ƒŽŽ ƒ”‡– ‹–‡”‡†‹ƒ”‹‡• ƒ† ƒŽ•‘ –‘ ’‡ƒŽ‹•‡ –Š‡ ‹ …ƒ•‡ ‘ˆ
˜‹‘Žƒ–‹‘• ‘ˆ –Š‡ ’”‘˜‹•‹‘• ‘ˆ –Š‡ …–ǡ —Ž‡• ƒ† ‡‰—Žƒ–‹‘• ƒ†‡ –Š‡”‡ —†‡”Ǥ  Šƒ• ˆ—ŽŽ
ƒ—–‘‘›ƒ†ƒ—–Š‘”‹–›–‘”‡‰—Žƒ–‡ƒ††‡˜‡Ž‘’ƒ‘”†‡”Ž›•‡…—”‹–‹‡•ƒ”‡–Ǥ
Securities Contracts (Regulation) Act, 1956
Š‹•ƒ…–’”‘˜‹†‡•ˆ‘”†‹”‡…–ƒ†‹†‹”‡…–…‘–”‘Ž‘ˆ˜‹”–—ƒŽŽ›ƒŽŽƒ•’‡…–•‘ˆ•‡…—”‹–‹‡•–”ƒ†‹‰ƒ†–Š‡
”—‹‰ ‘ˆ •–‘… ‡š…Šƒ‰‡• ƒ† ƒ‹• –‘ ’”‡˜‡– —†‡•‹”ƒ„Ž‡ –”ƒ•ƒ…–‹‘• ‹ •‡…—”‹–‹‡•Ǥ – ‰‹˜‡•
‡–”ƒŽ
‘˜‡”‡– ”‡‰—Žƒ–‘”› Œ—”‹•†‹…–‹‘ ‘˜‡” ȋƒȌ •–‘… ‡š…Šƒ‰‡• –Š”‘—‰Š ƒ ’”‘…‡•• ‘ˆ
”‡…‘‰‹–‹‘ ƒ† …‘–‹—‡† •—’‡”˜‹•‹‘ǡ ȋ„Ȍ …‘–”ƒ…–• ‹ •‡…—”‹–‹‡•ǡ ƒ† ȋ…Ȍ Ž‹•–‹‰ ‘ˆ •‡…—”‹–‹‡• ‘
•–‘… ‡š…Šƒ‰‡•Ǥ • ƒ …‘†‹–‹‘ ‘ˆ ”‡…‘‰‹–‹‘ǡ ƒ •–‘… ‡š…Šƒ‰‡ …‘’Ž‹‡• ™‹–Š …‘†‹–‹‘•
’”‡•…”‹„‡† „› ‡–”ƒŽ
‘˜‡”‡–Ǥ ”‰ƒ‹•‡† –”ƒ†‹‰ ƒ…–‹˜‹–› ‹ •‡…—”‹–‹‡• –ƒ‡• ’Žƒ…‡ ‘ ƒ
•’‡…‹ˆ‹‡†”‡…‘‰‹•‡†•–‘…‡š…Šƒ‰‡ǤŠ‡•–‘…‡š…Šƒ‰‡•†‡–‡”‹‡–Š‡‹”‘™Ž‹•–‹‰”‡‰—Žƒ–‹‘•
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

™Š‹…ŠŠƒ˜‡–‘…‘ˆ‘”–‘–Š‡‹‹—Ž‹•–‹‰…”‹–‡”‹ƒ•‡–‘—–‹–Š‡—Ž‡•Ǥ

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

27|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Depositories Act, 1996

‡’‘•‹–‘”‹‡• …–ǡ ͳͻͻ͸ ’”‘˜‹†‡• ˆ‘” –Š‡ ‡•–ƒ„Ž‹•Š‡– ‘ˆ †‡’‘•‹–‘”‹‡• ‹ •‡…—”‹–‹‡• ™‹–Š –Š‡
‘„Œ‡…–‹˜‡ ‘ˆ ‡•—”‹‰ ˆ”‡‡ –”ƒ•ˆ‡”ƒ„‹Ž‹–› ‘ˆ •‡…—”‹–‹‡• ™‹–Š •’‡‡†ǡ ƒ……—”ƒ…› ƒ† •‡…—”‹–› „› ȋƒȌ
ƒ‹‰•‡…—”‹–‹‡•‘ˆ’—„Ž‹…Ž‹‹–‡†…‘’ƒ‹‡•ˆ”‡‡Ž›–”ƒ•ˆ‡”ƒ„Ž‡•—„Œ‡…––‘…‡”–ƒ‹‡š…‡’–‹‘•Ǣȋ„Ȍ
†‡ƒ–‡”‹ƒŽ‹•‹‰ –Š‡ •‡…—”‹–‹‡• ‹ –Š‡ †‡’‘•‹–‘”› ‘†‡Ǣ ƒ† ȋ…Ȍ ’”‘˜‹†‹‰ ˆ‘” ƒ‹–‡ƒ…‡ ‘ˆ
‘™‡”•Š‹’ ”‡…‘”†• ‹ ƒ „‘‘ ‡–”› ˆ‘”Ǥ  ‘”†‡” –‘ •–”‡ƒŽ‹‡ –Š‡ •‡––Ž‡‡– ’”‘…‡••ǡ –Š‡ …–
‡˜‹•ƒ‰‡• –”ƒ•ˆ‡” ‘ˆ  ™‡”•Š‹’ ‘ˆ •‡…—”‹–‹‡• ‡Ž‡…–”‘‹…ƒŽŽ› „› „‘‘ ‡–”› ™‹–Š‘—– ƒ‹‰ –Š‡
•‡…—”‹–‹‡• ‘˜‡ ˆ”‘ ’‡”•‘ –‘ ’‡”•‘Ǥ Š‡ …– Šƒ• ƒ†‡ –Š‡ •‡…—”‹–‹‡• ‘ˆ ƒŽŽ ’—„Ž‹… Ž‹‹–‡†
…‘’ƒ‹‡• ˆ”‡‡Ž› –”ƒ•ˆ‡”ƒ„Ž‡ǡ ”‡•–”‹…–‹‰ –Š‡ …‘’ƒ›ǯ• ”‹‰Š– –‘ —•‡ †‹•…”‡–‹‘ ‹ ‡ˆˆ‡…–‹‰ –Š‡
t”ƒ•ˆ‡” ‘ˆ •‡…—”‹–‹‡•ǡ ƒ† –Š‡ –”ƒ•ˆ‡” †‡‡† ƒ† ‘–Š‡” ’”‘…‡†—”ƒŽ ”‡“—‹”‡‡–• —†‡” –Š‡
‘’ƒ‹‡•…–Šƒ˜‡„‡‡†‹•’‡•‡†™‹–ŠǤ
Companies Act, 1956:
– †‡ƒŽ• ™‹–Š ‹••—‡ǡ ƒŽŽ‘–‡– ƒ† –”ƒ•ˆ‡” ‘ˆ •‡…—”‹–‹‡• ƒ† ˜ƒ”‹‘—• ƒ•’‡…–• ”‡Žƒ–‹‰ –‘ …‘’ƒ›
manageme–Ǥ–’”‘˜‹†‡•ˆ‘”•–ƒ†ƒ”†‘ˆ †‹•…Ž‘•—”‡‹’—„Ž‹…‹••—‡•‘ˆ…ƒ’‹–ƒŽǡ’ƒ”–‹…—Žƒ”Ž›‹–Š‡
ˆ‹‡Ž†•‘ˆ…‘’ƒ›ƒƒ‰‡‡–ƒ†’”‘Œ‡…–•ǡ‹ˆ‘”ƒ–‹‘ƒ„‘—–‘–Š‡”Ž‹•–‡†…‘’ƒ‹‡•—†‡”–Š‡
•ƒ‡ƒƒ‰‡‡–ǡƒ†ƒƒ‰‡‡–’‡”…‡’–‹‘‘ˆ”‹•ˆƒ…–‘”•Ǥ–ƒŽ•‘”‡‰—Žƒ–‡•—†‡”™”‹–‹‰ǡ–Š‡
—•‡ ‘ˆ ’”‡‹— ƒ† †‹•…‘—–• ‘ ‹••—‡•ǡ ”‹‰Š–• ƒ† „‘—• ‹••—‡•ǡ ’ƒ›‡– ‘ˆ ‹–‡”‡•– ƒ†
†‹˜‹†‡†•ǡ•—’’Ž›‘ˆƒ—ƒŽ”‡’‘”–ƒ†‘–Š‡”‹ˆ‘”ƒ–‹‘Ǥ
Prevention of Money Laundering Act, 2002
Š‡’”‹ƒ”›‘„Œ‡…–‹˜‡‘ˆ–Š‡…–‹•–‘’”‡˜‡–‘‡›-Žƒ—†‡”‹‰ƒ†–‘’”‘˜‹†‡ˆ‘”…‘ˆ‹•…ƒ–‹‘‘ˆ
’”‘’‡”–›†‡”‹˜‡†ˆ”‘‘”‹˜‘Ž˜‡†‹‘‡›-Žƒ—†‡”‹‰ǤŠ‡–‡”‘‡›-Žƒ—†‡”‹‰‹•†‡ˆ‹‡†ƒ•
™Š‘‡˜‡”ƒ…“—‹”‡•ǡ‘™•ǡ’‘••‡••‘”–”ƒ•ˆ‡”•ƒ›’”‘…‡‡†•‘ˆ…”‹‡Ǣ‘”‘™‹‰Ž›‡–‡”•‹–‘ƒ›
transa…–‹‘™Š‹…Š‹•”‡Žƒ–‡†–‘’”‘…‡‡†•‘ˆ…”‹‡‡‹–Š‡”†‹”‡…–Ž›‘”‹†‹”‡…–Ž›‘”…‘…‡ƒŽ•‘”ƒ‹†•‹
–Š‡…‘…‡ƒŽ‡–‘ˆ–Š‡’”‘…‡‡†•‘”‰ƒ‹•‘ˆ…”‹‡™‹–Š‹†‹ƒ‘”‘—–•‹†‡†‹ƒ…‘‹–•–Š‡‘ˆˆ‡…‡
‘ˆ‘‡›Žƒ—†‡”‹‰Ǥ‡•‹†‡•’”‘˜‹†‹‰’—‹•Š‡–ˆ‘”–Š‡‘ˆˆ‡…‡ ‘ˆ‘‡›-Žƒ—†‡”‹‰ǡ–Š‡…–
ƒŽ•‘’”‘˜‹†‡•‘–Š‡”‡ƒ•—”‡•ˆ‘”’”‡˜‡–‹‘‘ˆ‘‡›ƒ—†‡”‹‰ǤŠ‡…–ƒŽ•‘…ƒ•–•ƒ‘„Ž‹‰ƒ–‹‘
‘ –Š‡ ‹–‡”‡†‹ƒ”‹‡•ǡ „ƒ‹‰ …‘’ƒ‹‡• ‡–… –‘ ˆ—”‹•Š ‹ˆ‘”ƒ–‹‘ǡ ‘ˆ •—…Š ’”‡•…”‹„‡†
–”ƒ•ƒ…–‹‘• –‘ –Š‡ ‹ƒ…‹ƒŽ –‡ŽŽ‹‰‡…‡ ‹–- †‹ƒǡ –‘ ƒ’’‘‹– ƒ ’”‹…‹’ƒŽ ‘ˆˆ‹…‡”ǡ –‘ ƒ‹–ƒ‹
…‡”–ƒ‹”‡…‘”†•‡–…Ǥ
’ƒ”–ˆ”‘–Š‡ƒ„‘˜‡Ž‡‰‹•Žƒ–‹‘•ǡ‰‘˜‡”‡–Šƒ•ˆ”ƒ‡†”—Ž‡•—†‡”–Š‡ǡ…–ƒ†–Š‡
‡’‘•‹–‘”‹‡• …–Ǥ  Šƒ• ˆ”ƒ‡† ”‡‰—Žƒ–‹‘• —†‡” –Š‡  …– ƒ† –Š‡ ‡’‘•‹–‘”‹‡• …– ˆ‘”
”‡‰‹•–”ƒ–‹‘ ƒ† ”‡‰—Žƒ–‹‘ ‘ˆ ƒŽŽ ƒ”‡– ‹–‡”‡†‹ƒ”‹‡•ǡ ƒ† ˆ‘” ’”‡˜‡–‹‘ ‘ˆ —ˆƒ‹” –”ƒ†‡
’”ƒ…–‹…‡•ǡ ‹•‹†‡” –”ƒ†‹‰ǡ ‡–…Ǥ
Member Name: †‡”
sunil kumar Member's–Š‡•‡ …–•ǡ
Email address:
‘˜‡”‡– ƒ†
tripathisunilkumar21@gmail.com  ‹••—‡ ‘–‹ˆ‹…ƒ–‹‘•ǡ
120.56.225.142

‰—‹†‡Ž‹‡•ǡƒ†…‹”…—Žƒ”•™Š‹…Š‡‡†–‘„‡…‘’Ž‹‡†™‹–Š„›ƒ”‡–’ƒ”–‹…‹’ƒ–•Ǥ
Chapter 5. Basics of Investments
Š‡‘‡›™Š‹…Š™‡‡ƒ”‹•’ƒ”–Ž›•’‡–ƒ†–Š‡”‡•–•ƒ˜‡†ˆ‘”‡‡–‹‰ˆ—–—”‡‡š’‡•‡•Ǥ•–‡ƒ†‘ˆ
‡‡’‹‰–Š‡•ƒ˜‹‰•‹†Ž‡™‡™‘—Ž†Ž‹‡–‘—•‡•ƒ˜‹‰•‹‘”†‡”–‘‰‡–”‡–—”‘‹–‹–Š‡ˆ—–—”‡ǤŠ‹•

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

28|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

‹•…ƒŽŽ‡†˜‡•–‡–Ǥ‡‹˜‡•–„‡…ƒ—•‡‘ˆƒ›”‡ƒ•‘•Ǥ‡‹’‘”–ƒ–”‡ƒ•‘‹•–Šƒ–™‡™ƒ––‘
‡‡– –Š‡ …‘•– ‘ˆ ˆŽƒ–‹‘Ǥ  Š‡ ˆŽƒ–‹‘ ™Š‹…Š ‹• –Š‡ ”ƒ–‡ǡ ƒ– ™Š‹…Š –Š‡ …‘•– ‘ˆ Ž‹˜‹‰ ‹…”‡ƒ•‡•ǡ
‹†‹…ƒ–‡•–Š‡”ƒ–‡ƒ–™Š‹…Š–Š‡’”‹…‡•‘ˆ–Š‡‰‘‘†•ƒ†•‡”˜‹…‡•™‡‡‡†ƒ”‡‹…”‡ƒ•‹‰Ǥ
ˆ–Š‡”‡‹•‹ˆŽƒ–‹‘ǡ–Š‡‘‡›Ž‘•‡•˜ƒŽ—‡ǡ„‡…ƒ—•‡‹–™‹ŽŽ‘–„—›–Š‡•ƒ‡ƒ‘—–‘ˆƒ‰‘‘†‘”ƒ
•‡”˜‹…‡‹–Š‡ˆ—–—”‡ƒ•‹–†‘‡•‘™‘”†‹†‹–Š‡’ƒ•–Ǥ
‘”‡šƒ’Ž‡ǡ™‡•—’’‘•‡–Šƒ–‹ˆ–Š‡”‡™ƒ•ƒͼά‹ˆŽƒ–‹‘”ƒ–‡ˆ‘”–Š‡Žƒ•–͸Ͷ›‡ƒ”•ǡƒ•ǤͷͶͶ’—”…Šƒ•‡
‹ͷͿͿ͸™‘—Ž†…‘•–•Ǥ͹͸ͷ‹͸Ͷͷ͸Ǥ‘ǡ™Š‡‡˜‡”™‡ƒ‡ƒŽ‘‰–‡”‹˜‡•–‡–•–”ƒ–‡‰›ǡ™‡‡‡†–‘
…‘•‹†‡”‹ˆŽƒ–‹‘Ǥ‹˜‡•–‡–̹•”‡ƒŽ”‡–—”‹•–Šƒ–”‡–—”™Š‹…Š‹•ƒˆ–‡”†‡†—…–‹‰–Š‡‹ˆŽƒ–‹‘ǤŠ‹•
‡ƒ•–Šƒ–‹ˆ–Š‡ƒ—ƒŽ‹ˆŽƒ–‹‘”ƒ–‡‹•ͼάǡ™Šƒ–™‡‹˜‡•–•Š‘—Ž†‡ƒ”‘”‡–Šƒͼάƒ—ƒŽŽ›•‘
–Šƒ–™‡‰‡–ƒ’‘•‹–‹˜‡”‡ƒŽ”‡–—”Ǥ
Real Assets and Financial Assets
 ’‡”•‘ …ƒ ‹˜‡•– ‹ PŠ›•‹…ƒŽ ƒ••‡–• Ž‹‡ ”‡ƒŽ ‡•–ƒ–‡ǡ ‰‘Ž†ȀŒ‡™‡ŽŽ‡”›ǡ ƒ† …‘‘†‹–‹‡• ‡–… ‘”
‹ƒ…‹ƒŽ ƒ••‡–• •—…Š ƒ• ˆ‹š‡† †‡’‘•‹–• ™‹–Š „ƒ•ǡ •ƒŽŽ •ƒ˜‹‰ ‹•–”—‡–• ™‹–Š ’‘•– ‘ˆˆ‹…‡•ǡ
‹•—”ƒ…‡Ȁ’”‘˜‹†‡–Ȁ’‡•‹‘ˆ—†‡–…Ǥ’ƒ”–ˆ”‘–Šƒ–ƒ‹˜‡•–‘”…ƒ‹˜‡•–‹•‡…—”‹–‹‡•ƒ”‡–
”‡Žƒ–‡†‹•–”—‡–•Ž‹‡•Šƒ”‡•ǡ„‘†•ǡ†‡„‡–—”‡•‡–…Ǥ
Interest Rates
Š‡ ƒ ’‡”•‘ „‘””‘™• ‘‡›ǡ Š‡ Ȁ •Š‡ ‹• ‡š’‡…–‡† –‘ ’ƒ› ˆ‘” —•‹‰ ‹–Ǥ Š‹• ‹• …ƒŽŽ‡† ‹–‡”‡•–Ǥ
–‡”‡•–‹•–Š—•ƒƒ‘—–…Šƒ”‰‡†ˆ”‘–Š‡„‘””‘™‡”ˆ‘”–Š‡’”‹˜‹Ž‡‰‡‘ˆ—•‹‰–Š‡‘‡›‘ˆ–Š‡
Ž‡†‡”ǤŠ‡‹–‡”‡•–‹•‡š’”‡••‡†ƒ•’‡”…‡–ƒ‰‡‘ˆ–Š‡’”‹…‹’ƒŽ„ƒŽƒ…‡ǤŠ‡‹–‡”‡•–”ƒ–‡•ƒ›„‡
‘ˆƒ›‹†•ǤŠ‡”‡ƒ”‡”ƒ–‡•–Šƒ–„ƒ•‘ˆˆ‡”‘–Š‡‹”†‡’‘•‹–•ǤŠ‡”‡ƒ”‡”ƒ–‡•ƒ–™Š‹…Š„ƒ•
Ž‡†–‘–Š‡‹”…—•–‘‡”•ȋ„‘””‘™‡”•ȌǤŠ‡ǡ–Š‡
‘˜‡”‡–ƒ›ƒŽ•‘„‘””‘™‹–Š‡ƒ”‡–™Š‹…Š
‹• …ƒŽŽ‡†
-•‡… ‘”
‘˜‡”‡– ‡…—”‹–‹‡• ‘”
—‹Ž– †‰‡ ƒ”‡–Ǥ Š‡ǡ –Š‡”‡ ƒ”‡ ”ƒ–‡• ‘ˆˆ‡”‡† –‘
‹˜‡•–‘”•‹•ƒŽŽ•ƒ˜‹‰•…Š‡‡••—…Šƒ• Ǥ
–‡”‡•–”ƒ–‡•ƒ”‡ƒˆˆ‡…–‡†„›ƒ›ˆƒ…–‘”•Ǥ‘•–‘ˆ–Š‡•‡ˆƒ…–‘”•ƒ”‡”‡Žƒ–‡†–‘ƒ…”‘‡…‘‘›•—…Šƒ•
‡ƒ†ˆ‘”‘‡›ǡ—’’Ž›‘ˆ‘‡›ǡ‡˜‡Ž‘ˆ
‘˜‡”‡–„‘””‘™‹‰•ǡˆŽƒ–‹‘”ƒ–‡ǡ–Š‡’‘Ž‹…‹‡•‘ˆ
ƒ†‘Ž‹…‹‡•‘ˆ–Š‡
‘˜‡”‡–Ǥ
Short Term Investment Options
Š‡”‡ƒ”‡•Š‘”––‡”‹˜‡•–‡–‘’–‹‘••—…Šƒ••ƒ˜‹‰•„ƒƒ……‘—–ǡ‘‡›ƒ”‡–ȀŽ‹“—‹†ˆ—†•
ƒ†ˆ‹š‡††‡’‘•‹–•™‹–Š„ƒ•Ǥ
o —–‘ˆ–Š‡–Š‡ƒ˜‹‰•ƒ……‘—–‹•‘ˆ–‡–Š‡ˆ‹”•–„ƒ‹‰’”‘†—…–’‡‘’Ž‡—•‡ǡ™Š‹…Š
‘ˆˆ‡”•Ž‘™‹–‡”‡•–ǡƒ‹‰–Š‡‘Ž›ƒ”‰‹ƒŽŽ›„‡––‡”–Šƒˆ‹š‡††‡’‘•‹–•Ǥ
o  †‹ƒǡ –Š‡ ‹–‡”‡•– ”ƒ–‡ ‘ •ƒ˜‹‰• „ƒ ƒ……‘—–• ‹• ‘™ †‡”‡‰—Žƒ–‡† ƒ• –Š‡ „ƒ•
–Š‡•‡Ž˜‡•†‡…‹†‡–Š‡‹–‡”‡•–”ƒ–‡•Ǥ
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

o Š‡ ‘‡› ƒ”‡– ‘” ‹“—‹† —†• ƒ”‡ ƒ •’‡…‹ƒŽ‹œ‡† ˆ‘” ‘ˆ —–—ƒŽ ˆ—†• –Šƒ– ‹˜‡•– ‹
‡š–”‡‡Ž›•Š‘”–-–‡”ˆ‹š‡†‹…‘‡‹•–”—‡–•ƒ†–Š‡”‡„›’”‘˜‹†‡‡ƒ•›Ž‹“—‹†‹–›Ǥ
Š‡”‡‹•ƒ„‹‰†‹ˆˆ‡”‡…‡„‡–™‡‡–Š‡—–—ƒŽ —†•ƒ†‹“—‹† —†•ǤŽ‹‡‘•–—–—ƒŽˆ—†•ǡ
‘‡›ƒ”‡–ˆ—†•ƒ”‡’”‹ƒ”‹Ž›‘”‹‡–‡†–‘™ƒ”†•’”‘–‡…–‹‰–Š‡‹˜‡•–‘”ǯ•…ƒ’‹–ƒŽƒ†–Š‡ǡƒ‹

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

29|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

–‘ ƒš‹‹•‡ ”‡–—”•Ǥ ‘‡› ƒ”‡– ˆ—†• —•—ƒŽŽ› ›‹‡Ž† „‡––‡” ”‡–—”• –Šƒ •ƒ˜‹‰• ƒ……‘—–•ǡ „—–
Ž‘™‡”–Šƒ„ƒˆ‹š‡††‡’‘•‹–•Ǥƒ•–Ž›ǡ–Š‡ ‹š‡†‡’‘•‹–•™‹–Šƒ•…ƒ„‡Ž‘‰–‡”ƒ•™‡ŽŽƒ•
•Š‘”– –‡” ‹˜‡•–‡– ‘’–‹‘• ƒ• ‹‹— ‹˜‡•–‡– ’‡”‹‘† ˆ‘” „ƒ • ‹• ͵Ͳ †ƒ›•Ǥ ‹š‡†
‡’‘•‹–• ™‹–Š „ƒ• ƒ”‡ ˆ‘” ‹˜‡•–‘”• ™‹–Š Ž‘™ ”‹• ƒ’’‡–‹–‡ǡ ƒ† ƒ› „‡ …‘•‹†‡”‡† ˆ‘” ͸-ͳʹ
‘–Š•‹˜‡•–‡–’‡”‹‘†ƒ•‘”ƒŽŽ›‹–‡”‡•–‘Ž‡••–Šƒ͸‘–Š•„ƒ •‹•Ž‹‡Ž›–‘„‡Ž‘™‡”
–Šƒ‘‡›ƒ”‡–ˆ—†”‡–—”•Ǥ
Long Term Investment Options
Š‡ ‘‰ –‡” ‹˜‡•–‡–• –›’‹…ƒŽŽ› …‘’”‹•‡ –Š‡ ‘•– ˆˆ‹…‡ ƒ˜‹‰• …Š‡‡•ǡ —„Ž‹… ”‘˜‹†‡–
Fundǡ‘’ƒ› ‹š‡†‡’‘•‹–•ǡ‘†•ƒ†‡„‡–—”‡•ǡ—–—ƒŽ —†•‡–…Ǥ
Post Office Investments:
o ‘•– ˆˆ‹…‡ ‘–ŠŽ› …‘‡ …Š‡‡ ‹• ƒ Ž‘™ ”‹• •ƒ˜‹‰ ‹•–”—‡–ǡ ™Š‹…Š …ƒ „‡ ƒ˜ƒ‹Ž‡†
–Š”‘—‰Šƒ›’‘•–‘ˆˆ‹…‡Ǥ–’”‘˜‹†‡•ƒ‹–‡”‡•–”ƒ–‡‘ˆƒ”‘—†ͺΨ’‡”ƒ—ǡ™Š‹…Š‹•’ƒ‹†
‘–ŠŽ›Ǥ
o ‹‹— ƒ‘—–ǡ ™Š‹…Š …ƒ „‡ ‹˜‡•–‡†ǡ ‹• •Ǥ ͳǡͷͲͲȀ- ƒ† ƒ††‹–‹‘ƒŽ ‹˜‡•–‡– ‹
—Ž–‹’Ž‡•‘ˆͳǡͲͲͲȀ-Ǥ
o ƒš‹—ƒ‘—–‹••Ǥ͵ǡͲͲǡͲͲͲȀ-ȋ‹ˆ‹‰Ž‡Ȍ‘”•Ǥ͸ǡͲͲǡͲͲͲȀ-ȋ‹ˆŠ‡Ž† ‘‹–Ž›Ȍ†—”‹‰ƒ›‡ƒ”Ǥ
– Šƒ• ƒ ƒ–—”‹–› ’‡”‹‘† ‘ˆ ͸ ›‡ƒ”•Ǥ ”‡ƒ–—”‡ ™‹–Š†”ƒ™ƒŽ ‹• ’‡”‹––‡† ‹ˆ †‡’‘•‹– ‹• ‘”‡
–Šƒ‘‡›‡ƒ”‘Ž†Ǥ‘•–‘ˆˆ‹…‡ƒŽ•‘’”‘˜‹†‡•–‹‡†‡’‘•‹–•ˆ‘” ͳǡʹǡ͵ǡͷ ›‡ƒ”•ǤŠ‡‘–ŠŽ›
•…Š‡‡ƒ†–‡”†‡’‘•‹–•‘ˆ‘•–‘ˆˆ‹…‡•†‘̵–’”‘˜‹†‡ƒ›ƒš„‡‡ˆ‹–•Ǥ
Public Provident Fund:
o   ‹• ƒ Ž‘‰ –‡” •ƒ˜‹‰• ‹•–”—‡– ™‹–Š ƒƒ–—”‹–› ‘ˆ ͳͷ ›‡ƒ”• ƒ† ‹–‡”‡•–’ƒ›ƒ„Ž‡ ƒ–
ͺǤʹͷΨ’‡”ƒ—ȋʹͲͳͳ-ͳʹǡ‹–™ƒ•ͻǤͷ’‡”…‡–’ƒ‹†‹ʹͲͳͲ-ͳͳȌ…‘’‘—†‡†ƒ—ƒŽŽ›Ǥ
 ƒ……‘—–…ƒ„‡‘’‡‡†–Š”‘—‰Šƒƒ–‹‘ƒŽ‹œ‡†„ƒƒ–ƒ›–‹‡†—”‹‰–Š‡›‡ƒ”ƒ†‹•
‘’‡ƒŽŽ–Š”‘—‰Š–Š‡›‡ƒ”ˆ‘”†‡’‘•‹–‹‰‘‡›Ǥ
o ƒš „‡‡ˆ‹–• …ƒ „‡ ƒ˜ƒ‹Ž‡† ˆ‘” –Š‡ ƒ‘—– ‹˜‡•–‡† ƒ† ‹–‡”‡•– ƒ……”—‡† ‹• –ƒš-ˆ”‡‡Ǥ 
™‹–Š†”ƒ™ƒŽ‹•’‡”‹••‹„Ž‡‡˜‡”››‡ƒ”ˆ”‘–Š‡•‡˜‡–Šˆ‹ƒ…‹ƒŽ›‡ƒ”‘ˆ–Š‡†ƒ–‡‘ˆ‘’‡‹‰
‘ˆ–Š‡ƒ……‘—–ƒ†–Š‡ƒ‘—–‘ˆ™‹–Š†”ƒ™ƒŽ™‹ŽŽ„‡Ž‹‹–‡†–‘ͷͲΨ‘ˆ–Š‡„ƒŽƒ…‡ƒ–…”‡†‹–
ƒ––Š‡‡†‘ˆ–Š‡Ͷ–Š›‡ƒ”‹‡†‹ƒ–‡Ž›’”‡…‡†‹‰–Š‡›‡ƒ”‹™Š‹…Š–Š‡ƒ‘—–‹•™‹–Š†”ƒ™
‘”ƒ––Š‡‡†‘ˆ–Š‡’”‡…‡†‹‰›‡ƒ”™Š‹…Š‡˜‡”‹•Ž‘™‡”–Š‡ƒ‘—–‘ˆŽ‘ƒ‹ˆƒ›Ǥ
Corporate FDs:
o ‘”’‘”ƒ–‡ • ‘” ‘’ƒ› ‹š‡† †‡’‘•‹–• ƒ”‡ •Š‘”–-–‡” ȋ•‹š ‘–Š•Ȍ –‘ ‡†‹—-–‡”
ȋ–Š”‡‡ –‘ ˆ‹˜‡ ›‡ƒ”•Ȍ „‘””‘™‹‰• „› …‘’ƒ‹‡• ƒ– ƒ ˆ‹š‡† ”ƒ–‡ ‘ˆ ‹–‡”‡•– ™Š‹…Š ‹• ’ƒ›ƒ„Ž‡
‘–ŠŽ›ǡ “—ƒ”–‡”Ž›ǡ •‡‹-ƒ—ƒŽŽ› ‘” ƒ—ƒŽŽ›Ǥ Š‡› …ƒ ƒŽ•‘ „‡ …——Žƒ–‹˜‡ ˆ‹š‡† †‡’‘•‹–•
Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

™Š‡”‡–Š‡‡–‹”‡’”‹…‹’ƒŽƒŽ‘‰™‹–Š–Š‡‹–‡”‡•–‹•’ƒ‹†ƒ––Š‡‡†‘ˆ–Š‡Ž‘ƒ’‡”‹‘†ǤŠ‡
”ƒ–‡‘ˆ‹–‡”‡•–˜ƒ”‹‡•„‡–™‡‡͸-ͻΨ’‡”ƒ—ǤŠ‡‹–‡”‡•–”‡…‡‹˜‡†‹•ƒˆ–‡”†‡†—…–‹‘‘ˆ
taxes.

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

30|P a g e 

  General Studies Manual for UPSC and State Public Service Examinations
Indian Economy 11:: Capital Markets & Investment Markets

Bonds:
o ‘†• ƒ”‡ ˆ‹š‡† ‹…‘‡ ‹•–”—‡–• ‹••—‡† ˆ‘” ƒ ’‡”‹‘† ‘ˆ ‘”‡ –Šƒ ‘‡ ›‡ƒ” ™‹–Š –Š‡
’—”’‘•‡ ‘ˆ ”ƒ‹•‹‰ …ƒ’‹–ƒŽǤ Š‡ …‡–”ƒŽ ‘” •–ƒ–‡ ‰‘˜‡”‡–ǡ …‘”’‘”ƒ–‹‘• ƒ† •‹‹Žƒ”
‹•–‹–—–‹‘• •‡ŽŽ „‘†•Ǥ  „‘† ‹• ‰‡‡”ƒŽŽ› ƒ ’”‘‹•‡ –‘ ”‡’ƒ› –Š‡ ’”‹…‹’ƒŽ ƒŽ‘‰ ™‹–Š ƒ
ˆ‹š‡†”ƒ–‡‘ˆ‹–‡”‡•–‘ƒ•’‡…‹ˆ‹‡††ƒ–‡ǡ…ƒŽŽ‡†–Š‡ƒ–—”‹–›ƒ–‡Ǥ
Mutual Funds:
Š‡ —–—ƒŽ ˆ—†• ƒ”‡ ‘’‡”ƒ–‡† „› ƒ ‹˜‡•–‡– …‘’ƒ› ™Š‹…Š ”ƒ‹•‡• ‘‡› ˆ”‘ –Š‡
’—„Ž‹…ƒ†‹˜‡•–•‹ƒ‰”‘—’‘ˆƒ••‡–•ȋ•Šƒ”‡•ǡ†‡„‡–—”‡•‡–…ǤȌǡ‹ƒ……‘”†ƒ…‡™‹–Šƒ•–ƒ–‡†
•‡–‘ˆ‘„Œ‡…–‹˜‡•Ǥ—–—ƒŽ —†•ƒ”‡ˆ‘”–Š‘•‡™Š‘ƒ”‡—ƒ„Ž‡–‘‹˜‡•–†‹”‡…–Ž›‹‡“—‹–‹‡•‘”
†‡„–„‡…ƒ—•‡‘ˆ”‡•‘—”…‡ǡ–‹‡‘”‘™Ž‡†‰‡…‘•–”ƒ‹–•Ǥ
—–—ƒŽ —†•…‘‡™‹–Š„‡‡ˆ‹–••—…Šƒ•’”‘ˆ‡••‹‘ƒŽ‘‡›ƒƒ‰‡‡–ǡ„—›‹‰‹•ƒŽŽ
ƒ‘—–• ƒ† †‹˜‡”•‹ˆ‹…ƒ–‹‘Ǥ —–—ƒŽ ˆ—† —‹–• ƒ”‡ ‹••—‡† ƒ† ”‡†‡‡‡† „› –Š‡ —†
ƒƒ‰‡‡–‘’ƒ›„ƒ•‡†‘–Š‡ˆ—†̵•‡–ƒ••‡–˜ƒŽ—‡ȋȌǡ™Š‹…Š‹•†‡–‡”‹‡†ƒ––Š‡
‡†‘ˆ‡ƒ…Š–”ƒ†‹‰•‡••‹‘Ǥ
‹•…ƒŽ…—Žƒ–‡†ƒ•–Š‡˜ƒŽ—‡‘ˆƒŽŽ–Š‡•Šƒ”‡•Š‡Ž†„›–Š‡ˆ—†ǡ‹—•‡š’‡•‡•ǡ†‹˜‹†‡†„›
–Š‡—„‡”‘ˆ—‹–•‹••—‡†Ǥ—–—ƒŽ —†•ƒ”‡—•—ƒŽŽ›Ž‘‰–‡”‹˜‡•–‡–˜‡Š‹…Ž‡–Š‘—‰Š
–Š‡”‡•‘‡…ƒ–‡‰‘”‹‡•‘ˆ—–—ƒŽˆ—†•ǡ•—…Šƒ•‘‡›ƒ”‡–—–—ƒŽˆ—†•™Š‹…Šƒ”‡•Š‘”–
–‡”‹•–”—‡–•Ǥ


Member Name: sunil kumar Member's Email address: tripathisunilkumar21@gmail.com 120.56.225.142

© 2010-2013 Suresh Soni | All Rights Reserved | Email: suresh@gktoday.in

31|P a g e