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Equities Market

 

The stock market is a mechanism for channeling funds from investors to companies thereby enabling raising of non-debt funds. Basically, companies avail this source of finance to fulfill their funding requirements. Equities do not carry any fixed coupon, but are rewarded with dividends based on the performance of the company. The risk associated with such investments is higher as compared to debt investments.

The primary market for equities consists of IPO (Initial Public Offerings) by new as well as existing listed companies who are looking to raise funds by offering equity to the public. Apart from the conventional modes, Qualified Institutions’ Placement (QIP) was also used by many listed companies to meet their financing requirements.

In India, trading in the Equity market is facilitated through stock exchanges such as NSE, BSE and MSEI. The exchanges also provide a trading platform for the derivative contracts (futures and options). Generally, trading in securities listed on exchanges is done with the tick size of 5 paise. Separately, to restrict volatility in equities, Circuit Breakers have been introduced. The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the BSE Sensex or the Nifty 50, whichever is breached earlier.

NSE operates on the 'National Exchange for Automated Trading' (NEAT) system, a fully automated screen based trading system, which adopts the principle of an order driven market. Through this technology, members can trade remotely from their offices located in any part of the country. BSE too, provides a separate online platform, BOLT for equity trading. Equity trades are settled on T+2 basis, wherein the counterparty due to make funds payment is required to make it available on T+1 itself. Trading hours for equities segment is from 9.15 am to 3.30 pm on Monday to Friday.

Buoyant secondary market performance, supported by strong macro-economic fundamentals, favorable investment climate and encouraging corporate results, has attracted domestic as well as international investors to Indian equity market. It has also encouraged a number of companies to raise capital from the primary market.

Recently, STCI PD diversified its operations and started trading in Equity and Equity F&O markets. Trading however, is conducted only on proprietary basis.

 
 

Latest News


In its first Bi-Monthly Monetary Policy for FY18, the MPC-panel maintained its pause on policy rates, whilst reiterating its neutral stance.
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The panel forecasts mild upside risks to its inflation projections, while GVA growth is expected to remain healthy at 7.4% for FY18.
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India’s consumer price-based inflation dropped to new record low of 2.99% in April on the back of decline in prices of food articles including pulses and vegetables.
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India’s WPI based on the revised 2011-12 series edged lower to 3.85% in April as manufactured goods and food articles indicated cooling of prices.
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Further fine-tuning the existing liquidity framework, RBI narrowed the LAF corridor to +/- 50 bps vis a vis the earlier +/- 100 bps.
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Consequently, the policy rates are as follows: 1. Repo rate: 6.25%, 2. Reverse repo: 6% , 3. MSF at 6.50%.
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India’s Industrial Production in March under the revised base year of 2011-12 slipped 2.7% as against 5.5% in Feb owing to weak performance in the manufacturing sector.
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