Securities and Classification of Company Securities
Securities are the tradeable financial instrument for the purpose of monetary value. They are assets with economic value and includes a wide range of investments, including stocks, bonds, notes and limited partnership interests.
Types of securities in India
The Types of securities in India are :-
Equity securities
It is the securities that represent the shareholders of the company in its equity shares, and stocks including common as well as preferred stocks. These holders are usually does not gain or get regular payment. They may get dividends but benefit from capital gains (if their value increases) when the securities are sold, they may receive it. equity securities give owner control of the voting rights the owner may have the voting rights in this case. After the bankruptcy they can only get the left-out portion of the amount after the debt of the creditor has been paid.
Debt securities
These represent borrowings which needs to be repaid and are subject to the conditions the conditions can be loan size, interest rate, and due date or renewal date. The mechanism is to issue a bond of a specific value in which a company promises to pay the amount specified. The value of that the amount which is to be pay later is the higher than the value which is being asked as a security. Example: if the government school wants to build a school it can issue a funds on a loan. investors who have purchased bonds to borrow the money can ask from school rapid through interest.
Derivative securities
It is called derivative because it is dependent on other instruments such as promises, contract etc. they are being used to ensure the balance of the exchange rates.
Securities trading
In today’s world the informal electronic trading system is become common. And securities are hence exchanged over by the counter online only. An initial public offering (IPO) is the company’s first extensive public offering of shares.
After the IPO whatever the issue is being shared is the second offering. Securities can also be offered as a part of private placement to a restricted qualified groups.
Investing in securities
Company that is selling security is issuer of the security and the person buying it is and investor. Securities are actually the investment by which a company can sell and raise capital. Companies can make a lot of money by selling its securities for example sharing its capital. The market demand, financial structure also plays an important role in selling of securities. These are dependent on a lot of factors.
Other securities
Certified security
They are in the form of certificate and has a value specified on the paper. They can also be shared by a direct transfer of registration by a transfer agent.in other words share can also be sold here without the help of the certificate.
Bearable security
Bearer securities they give rights to the shareholders which comes from the security.
Registered securities
This will have the owners name and the any other information which is being registered by the issuer. By changing the registration, the registered papers will be transferred. These bonds are not always split.
