onomi       on epts and erminolo ies        22.7
     while debentures, also used to raise long-term debt, single individual investor holding more than 49
     are not supported by any collateral.                 per cent of the shares or units of the fund. If the
                                                          broad based fund has institutional investor (s),
         book builDing                                    then it is not necessary for the fund to have 20
                                                          investors. Further, if the broad based fund has an
     This is a public offer of equity shares of a         institutional investor who holds more than 49 per
     company. In this process, bids are collected from    cent of the shares or units in the fund, then the
     the investors, in a certain price range fixed by the institutional investor must itself be a broad based
     company. The issue price is fixed after the bid      fund.
     closing date depending on the number of bids
                                                                In India, the entities, proposing to invest
     received at various price levels. A company that is
                                                          on behalf of broad based funds, are eligible to be
     planning an initial public offer (IPO) appoints a
                                                          registered as FIIs are: (i) Asset Management
     merchant banker as a ‘book runner’. The company
                                                          Companies, (ii) Investment Manager/Advisor,
     issues a prospectus which does not mention the
                                                          (iii) Institutional Portfolio Managers, (iv) Trustee
     price, but gives other details about the company
                                                          of a Trust, and (v) Bank
     with regard to issue size, the business the company
     is in, promotes and future plans among other
     disclosures. A particular period is fixed as the bid     brownfielD locAtion
     period. The book runner builds an order book, that   A derelict industrial area that has been demolished
     is, collates the bids from various investors, which  to accommodate new industries. This is opposite
     shows the demand for the shares. Prospective         to the greenfield location where a new industry is
     investors can revise their bid at any time during    set up in a new area.
     the bid period. On closure of the book, the
     quantum of shares ordered and the perspective            bubble
     prices offered are known. The price discovery is a
     function of demand at various prices, and involves   The price rise of an asset unexplained by the
     negotiations between those involved in the issue.    fundamentals and still people interested in holding
     The book runner and the company conclude the         the assets. After the bursting of the bubble, assets
     pricing and decide the allocation to each member.    cool down to their real prices.
         brAcket creep                                        buDget line
     Increasing incomes due to inflation (via increased   A line on the dual axis graph showing the alternate
     dearness allowances, individual income goes for      combinations of goods that can be purchased by
     an increase) pushes individuals into higher tax      a consumer with a given income at given prices.
     brackets and leaves them worse off (as their real
     income has not increased and their disposable            bullet repAyment
     income i.e. income after tax payments, falls) – this
     phenomenon is known as the bracket creep.            ‘Bullet repayment’ means a lump-sum payment
                                                          for the entire loan amount paid at the time of
                                                          maturity. Such arrangements may be put in place
         broAD bAseD funD
                                                          by the banking regulator (RBI in case of India)
     This is a fund established or incorporated outside   to fasten the process of recovery of the non-
     India, which has at least 20 investors with no       performings assets (NPAs) process of the banks.