Products in equity markets

 The equity segment of the stock exchange allows trading in shares, debentures, warrants, mutual funds and exchange traded funds (ETFs). 

lets us know what are these 

An Equity Share represents the form of fractional ownership in a business venture. Equity shareholders collectively own the company. They bear the risk and enjoy the rewards of ownership.  

Debentures are instruments for raising debt. Debentures in India are typically secured by tangible assets. There are fully convertible, non‐convertible and partly convertible debentures. Fully convertible debentures will be converted into ordinary shares of the same company underspecified terms and conditions. Partly convertible debentures(PCDs) will be partly converted into ordinary shares of the same company under specified terms and conditions. Thus, it has features of both debenture as well as equity. Non‐Convertible Debentures (NCDs) are pure debt instruments without a feature of conversion. The NCDs are repayable on maturity. Partly convertible debentures have features of convertible and non‐convertible debentures. Thus, debentures can be pure debt or quasi‐equity, as the case may be.

Warrants entitle an investor to buy equity shares after a specified time period at a given price.

Mutual Funds is an investment vehicle that pools money from numerous investors who wish to save or make investments having similar investment objective. A mutual fund invests in different types of securities in consonance with the investment objectives. A mutual fund company pools money from many investors and invests the money in stocks, bonds, money‐market instruments, other securities or assets, orsome combination of these investments, depending on the objectives of the fund. There are funds which invest in equities, better known as equity MF schemes which are considered riskier than debt mutual funds. One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of various securities which would be quite difficult to create with a small amount of capital.   

Exchange Traded Fund is a fund that can invest in either all of the securities or a representative sample of securities included in an index. Importantly, the ETFs offer a one‐ stop exposure to a diversified basket of securities that can be traded in real time like an individual stock. ETF units with underlying security of Gold are also traded on stock Exchanges. 

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