Types of Stocks in Indian Stock Market

Types of Stocks in Indian Stock Market
Types of Stocks in Indian Stock Market

Types of Stocks in Indian Stock Market

Stock

A stock (or a share) is associate degree possession interest within the underlying business. If you’re the owner of the stock, you own a proportionate stake of the corporation whose stock you own. For E.g. if you own 1000 shares in HDFC Bank, you own 0.00003955% (No. of shares you own / No. of shares of HDFC bank in issue) of the bank.

Types of Stocks in Indian Stock Market

Growth

Companies that systematically manage to grow their profits quicker than their business peers are referred to as growth stocks. Their quicker growth is mostly the results of some property competitive blessings. Since they have to perpetually fund their growth, they generally disburse very little or no dividends. The investors are rewarded from appreciation in stock price. Since competitors will emulate them and eliminate their competitive advantage, growth stocks ar additional risky than a number of the classes we tend to discuss next.

Value

Stocks offered at a major discount to their intrinsic worth comprise this class. These are sound businesses in sectors that are not favoured by the market presently. Some of them pay a major share of their profits as a dividend or resort to stock buybacks once their shares are out of favour.

Dividend Yield

These are companies that generate a significant amount of cash in the business and do not have enough profitable opportunities to deploy the cash. So, they come most of it to the shareholders within the style of dividends.

Cyclical

These are firms whose profits are connected to economic cycles. They report important profits once the economic process is powerful and struggle to report profits once the economic process slows down. Typical examples are artefact firms in metals, cement, oil & gas etc.

Information sources on stocks

A capitalist will gather data on the stock from numerous sources. Some of them are mentioned below:

Red Herring Prospectus (RHP)

Red Herring Prospectus

This is the most important information source on any company and the best place to start. It contains business summary, company background, risk factors, management background, management discussion and analysis (MD&A) that gives the outlook of the business going forward and detailed financial statements. RHP’s are available on the SEBI website.

Annual Reports

Publicly listed firms publish elaborated reports annually that embrace business summary, company background, company strategy, business outlook and detailed financial statements of the current and preceding financial year. Annual reports are available on the respective company websites.

Quarterly results

Publicly listed firms publish quarterly reports of monetary performance with the stock exchanges. They additionally contain business segment-wise data, data on promoter pledging of shares and non-recurring items that impacted financial performance in the quarter.

Investor Presentations

Many publically listed firms offer elaborated capitalist displays that cowl company background, company strategy, business outlook and detailed financial statements of the current and preceding financial period.

Earnings conference calls

Many firms conduct conference calls when quarterly results whereby management provides steerage of performance over the medium term and take queries from investors and analysts.

Management interviews in print/TV

Management interviews offer clues on management specialize in performance, transparency and investor friendliness.

Key takeaways of Types of Stocks in Indian Stock Market

•             stock is an ownership in a business or a company.

•             There are different types of stocks such as growth, dividend yield, value and cyclical stocks.

•             information on stocks can be collected from annual reports, earnings call, management interviews and investor presentations.

Read our previous article on Types of Stock Market