14.10        ndian    onom
     may be to individuals also. This is done through a   futures
     process of direct negotiations (completely opposite
                                                          A trading allowed in shares where a future price
     to the public issue). The advantage of this route
                                                          is quoted for the shares and the payment and
     is the substantial saving a share issuing company
                                                          delivery takes place on the pre-determined dates.
     makes on marketing expenses (but the risk of
     shifting loyalties of the investors in this route is DePositories
     also the highest).
                                                          Started in 1996 under which stocks are converted
          Recent times have seen such capital raising by  into ‘paperless form’ (dematerialisation of
     many companies privately placing their shares to     shares shortly known as the ‘demat’). At present,
     the foreign institional investors (FIIs) as a route  two public sector depositaries (Mumbai) are
     to source foreign exchange in India, and that too    functioning in India set up under the Depositories
     quickly.                                             Act, 1996—
                                                               (i) NSDL (National Securities Depositories
        imPortant termS of Stock market                            Ltd.)
                                                              (ii) CDSL (Central Depositories Services
     scriP shAre
     A share given to the existing shareholders without
     any charge—also known as bonus share.                sPreAD
                                                          The difference between the buying and selling
     sWeAt shAre
                                                          prices of a share is called spread. Higher the
     A share given to the employees of the company        liquidity of a share lower its spread and vice versa.
     without any charge.                                  Also known as Jobber’s Turn or Margin or Hair
     rolling settlement
     An important reform measure started in the           kerb DeAlings
     Indian stock market in mid-2001 under which          The transactions of stocks which take place outside
     all commitments of sale and purchase result into     the stock exchanges—unofficially and take place
     payment/delivery at the end of the ‘X’ days later    after the normal trading hours.
     (where ‘X’ stands for 5 days. Some shares have X
     as one, two or three days, too). Today, all shares   nscc
     are covered under this provision.                    The National Securities Clearing Corporation
                                                          (NSCC), a public sector company set up in 1996
     bADlA                                                takes the counter party risk of all transactions done
     When the buyers want postponement of the             at the NSE just as an intermediary guarantees all
     transaction—in Western world called Contango.        trades.
     unDhA bADlA                                          DemutuAlisAtion
     When the sellers want postponement of the            A process started (2002) by SEBI under which
     transaction—also known as the reverse badla or       ownership, management and trading membership
     backwardation.                                       was to be segregated from each other. No broker