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1. Overview: Equity

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What is Equity?

Share capital means shares owned by the company in connection with stock market investments. Simply put, it is the total amount of money a shareholder is entitled to receive after all the company’s debts are paid and the assets are liquidated. When a person invests in shares of a company, he becomes a part owner of it.

By investing in the company’s shares, he can make a profit through capital growth or an increase in the share price. In addition, investing in the company’s shares gives the private person the right to vote in matters related to the board.

Investing in stocks is popular among individuals because they are high-yield investment opportunities. Despite the potential for high returns, they also expose an individual’s investment portfolio to a certain level of risk. It is therefore important that individuals assess their risk appetite before deciding to invest in stocks.

However, it is important for investors to assess their risk appetite before investing in the stock market in order to make sound financial decisions.

How does Equity Work?

Equity in business always represents some form of goodwill, but it has different uses. The following applications of the term will help you understand better. You will also notice that the final working capital concept is that the capital of a business is the sum of net income, assets, and inventory.


A share can be called a participation in a company represented by stock or securities. In short, investors can own company stock in the form of preferred stock or common stock. This means that the original owner of the company would share his own with the other shareholders. Equity given to shareholders is represented as the money they would receive from those shares if they were sold.

This price changes over time due to market forces. An investor gets his total investment in the company by multiplying the value of one share by the total number of shares he owns. If a trader trades on margin, where he borrows money to buy stocks, the trader’s equity would be the value of the securities received minus the loan amount.


When you look at a company’s balance sheet, you can see the total amount of equity in that company. It is the sum of retained earnings, paid-in capital, preferred stock, and common stock. And this is known as stock or shareholders’ equity because it represents the equity that is shared by all the owners of the business.


Real Estate also use equities, which is the difference between the fair market value of the real estate and the mortgage debt.


Liquidation occurs in the investment market when an investor wants to close his position in a certain asset or securities. A stock investor may decide to sell some or all of the stocks held in his portfolio for cash. Assets are typically liquidated when an investor or portfolio manager needs cash to redistribute assets or rebalance a portfolio. Assets that do not perform well in the market can be partially or fully realized to reduce or avoid losses.

To learn more about equity visit our website.

Open an account to invest in equities.

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Table of Contents

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

Names and contact details of all Key Managerial Personnel including Compliance Officer

Sr. No.Name of the IndividualDesignationContact NumbersEmail Id
1 Charanpreet GillCEO/
2 Charanpreet GillWhole Time
3 Charanpreet GillCompliance
4Manpriya GillDesignated
5Kewal GillDesignated

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