1. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
TYPES OF EQUITY
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
SHARES
SHELLEY E.
EMAIL Trademark Department
info@altacit.com
WEBSITE
www.altacit.com

2. INTRODUCTION
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
• A share is a document which is issued by a company,
Mylapore,
Chennai - 600 004. registered with the stock exchange, by which the holder of
Tel: +91 - 44 - 2498 4821
the share becomes one of the owners of the company.
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
• There are several different stock types and classifications, so
Tel: +91 - 80 - 6546 2400
it is important to understand what type your shares are and
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
what their classifications are.
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
• Two of the biggest stock types are preferred stock shares
and common stock shares/ Equity Shares.
• These type of shares you own will determine how you are
EMAIL
paid, and the value of your stock if the company goes
info@altacit.com under, as well as the order debts are paid to shareholders.
WEBSITE
www.altacit.com

3. EQUITY SHARES
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore, • Equity shares/common shares/ordinary shares.
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
– These shares are the most commonly traded shares, and
BANGALORE
Suite 920, Level 9, they give you a vote in company matters.
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
– Equity shares can be purchased from the stock market or
Tel: +91 - 80 - 6546 2400
from the company when it announces public issue of its
COIMBATORE
BB1, Park Avenue,
stock.
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
– They earn a dividend as long as the company is earning
money, and this dividend directly corresponds to the
profit made by the company.
– High profits mean high dividends for you.
– Ordinary shares have no special rights or restrictions.
EMAIL
– Whilst they have the highest risk, they also have the
info@altacit.com potential to bring the biggest financial gains.
WEBSITE
www.altacit.com

4. DEFINITION OF EQUITY
SHARES
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
• Equity is the extra or surplus of profit left over to be
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821 distributed between investors, after all the liabilities are
BANGALORE paid off.
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
• According to section 85 (2), of Companies Act, 1956,
COIMBATORE Equity share can be defined as the share, which is not
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
preference shares. In other words equity shares are those
Tel: +91 - 422 – 6552921
shares, which do not have the following preferential rights:
– (a) Preference of dividend over others.
– (b) Preference for repayment of capital over others at the
time of winding up of the company.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

5. FEATURES OF EQUITY
SHARES
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
• It is a financial instrument through which it bestows
Tel: +91 - 44 - 2498 4821
ownership rights to the investor in the company.
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
• The owner has a right on the profits and on the
Tel: +91 - 80 - 6546 2400
company’s assets in case of liquidation of the company.
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018. • They have voting rights in the company.
Tel: +91 - 422 – 6552921
• They are distributed the surplus of profits after the
interest is settled, taxes paid and depreciation provided
and preference shareholders are cleared.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

6. CONT.
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
• The financial standing, its progress and strategies for
Tel: +91 - 44 - 2498 4821
BANGALORE
growth of the company determines the share prices.
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001. • These equity shares can be bought at the stock
Tel: +91 - 80 - 6546 2400
COIMBATORE
exchange, through stock brokers, online brokers and
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
sometimes in banks and
Tel: +91 - 422 – 6552921
• Though the creditors and preferential shareholders
invest cash, they have no say in the conduct of
business while the equity shareholders have full
powers to direct the company.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

7. TYPES OF EQUITY SHARES
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
• Blue Chip Shares:
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
– These are the shares of companies which are well
BANGALORE
established and reputed in all fields.
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
– These shares normally pay dividends, and have a track
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
record of performance and earnings.
COIMBATORE – Blue chip companies also have no large amounts of
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
liabilities. Blue chip shares are usually the cream of the
Tel: +91 - 422 – 6552921
crop, and are sought after. These types of shares are
generally considered stable and safe as an investment.
The Blue Chip companies include Microsoft, Coca- Cola,
Reliance, ONGC, NTPC, SBI, ICICI, Tata Steels,
EMAIL Wipro, and a few others.
info@altacit.com
WEBSITE
www.altacit.com

8. CONT.
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
• Penny stocks:
– These are another shares classification, and these
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
shares are low in price and high in risks.
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
– Penny shares are not traded on the regular stock
COIMBATORE markets and exchanges, and are instead traded on
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
over the counter markets instead.
Tel: +91 - 422 – 6552921
– Penny shares offer a significant opportunity for
reward if you choose wisely, but there is a high risk
level involved because many penny shares come from
companies without an extensive history available.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

9. CONT.
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
• Income Shares:
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821 – These companies have a stable share value and always
BANGALORE
Suite 920, Level 9, pay high dividends.
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
– Since they have high dividend payout ratio, the profits
Tel: +91 - 80 - 6546 2400
of the company saved are less and so their growth
COIMBATORE
BB1, Park Avenue, opportunities are very less.
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
• Growth Shares:
– These are shares of companies which are on top in
their industry like Wipro in Computers, Tatas in steel,
Bajaj in automobiles etc.
EMAIL – The shares here have less dividend payout and so their
info@altacit.com
growth rate is high.
WEBSITE
www.altacit.com

10. CONT.
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
• Cyclical Shares:
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
– Some company’s performance keeps
BANGALORE
Suite 920, Level 9,
Raheja Towers,
fluctuating like a business cycle meaning the
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
share prices are affected with any variations in
COIMBATORE
the economy.
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
– Sugar and fertiliser are two such industries.
Tel: +91 - 422 – 6552921
• Defensive Shares:
– The shares of these companies are not affected
by the economical changes.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

11. CONT.
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
• Speculative Shares:
Tel: +91 - 44 - 2498 4821
– The shares here are traded on speculations. These shares
BANGALORE
Suite 920, Level 9,
Raheja Towers,
are high risk in nature but also give very high returns in
26-27, M G Road,
Bangalore - 560 001.
short terms.
Tel: +91 - 80 - 6546 2400
– The scrips fall sharply suddenly so investors should
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
always keep an eye on it always.
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
• Value shares:
– are shares which investors believe have been
undervalued, and these shares are believed to be
worth more than the current market value.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

12. LIMITATIONS AND RISK
FACTORS
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
• The equity share holders have many limitations as far as
BANGALORE income is concerned.
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
• Even when there are profits, they get their share at the
COIMBATORE last which means the amount of sharing gets reduced.
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921 • The preferential shareholders and creditors are paid
interest income even if the company is in loss but the
equity shareholders get their share only if company
makes huge profits.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

13. CONT..
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
• The rate of dividend on such shares is not pre-
Mylapore,
Chennai - 600 004. determined, but it depends on the profit earned by the
Tel: +91 - 44 - 2498 4821
company.
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
• These shares are also known as ‘Risk Capital’, because
Tel: +91 - 80 - 6546 2400
they get dividend on the balance of profit if any, left
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
after payment of dividend on preference shares and also
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
at the time of winding up of the company, they are paid
from the balance asset left after payment of other
liabilities and preference share capital.
• They have to claim dividend only, if the company in its
EMAIL
A. G. M. declares the dividend.
info@altacit.com
WEBSITE
www.altacit.com

14. CONCLUSION
CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
• The shares cannot be put in one category as each
BANGALORE has different characters and are overlapping each
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road, other. The investment in shares involve market
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400 risks. Hence a very careful analysis in choosing the
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
right share is important.
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

15. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
THANK YOU
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
info@altacit.com
WEBSITE
www.altacit.com