§00 · EDITORIAL · GLOSSARY · 202 TERMS
Investor vocabulary,
defined.
202 live · 23 letters covered
Updated · 2026-06-02
Plain-language definitions of every financial term used elsewhere on MintByte. Each entry cites its primary source and links across to the methodology page that operationalises it. Written for Indian capital allocators first — SEBI, AMFI, and RBI sources throughout.
Why we wrote our own
Investopedia is generic. Indian finance has its own facts.
“AUM” means one thing for a mutual fund (the sum of scheme NAVs × units outstanding) and a meaningfully different thing for a PMS (which can include leveraged exposure). The term “NAV” depends on the cut-off the AMC uses for same-day vs next-day pricing under SEBI rules that change every few years. Generic finance dictionaries miss this nuance.
The entries here are written for Indian capital allocators first — with SEBI/AMFI/RBI sources, INR examples, and a clear note when US convention differs from Indian.
A–Z
A
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- American Depositary Receipt (ADR)An ADR is a US-exchange-traded certificate representing shares in a non-US company, allowing Indian companies like Infosys and HDFC Bank to list on NYSE or Nasdaq without a direct US IPO.5 min read
- Aggressive Hybrid Fund — SEBI Hybrid Mutual Fund Category with Equity-Dominant AllocationA SEBI-defined hybrid category investing 65–80% in equity and 20–35% in debt, qualifying for equity tax treatment while retaining a debt buffer.8 min read
- AIF — Alternative Investment Fund1 min read
- Asset Management Company (AMC)An Asset Management Company is the SEBI-registered entity that manages mutual fund schemes on behalf of unitholders. Under SEBI MF Regulations 1996, the sponsor must hold at least 40% of the AMC's net worth.5 min read
- Anchor Investor — SEBI ICDR Pre-IPO Allocation to Qualified Institutional BuyersAn anchor investor is a Qualified Institutional Buyer (QIB) that is allotted shares in an IPO or FPO at the issue price before the subscription opens, subject to a mandatory lock-in period under SEBI ICDR Regulations 2018.9 min read
- Anchoring BiasThe tendency to fixate on an initial reference price — the "anchor" — and insufficiently adjust when new information arrives, documented by Tversky & Kahneman (1974).7 min read
- Asset Allocation — SEBI MF Category ThresholdsIn the SEBI MF categorisation framework, asset allocation refers to the minimum and maximum exposure thresholds for each asset class defined in a scheme's SID. SEBI's October 2017 circular standardised these guardrails across all AMCs.6 min read
- AUM — Assets Under ManagementThe total market value of investments a fund manages on behalf of its investors. Tracked monthly by AMFI.1 min read
B
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- Balanced Advantage FundA Balanced Advantage Fund (BAF) is a hybrid mutual fund that dynamically adjusts its equity allocation based on market valuations, typically within a 30–80% equity range. SEBI classifies BAFs under the dynamic asset allocation category.5 min read
- Balanced Fund — Pre-2018 Category & Post-SEBI ReclassificationBalanced Fund was a legacy SEBI mutual fund category combining equity and debt. Post the October 2017 SEBI Categorisation Circular (effective April 2018), all balanced funds were reclassified into Aggressive Hybrid, Conservative Hybrid, or Balanced Advantage Fund.6 min read
- Bank IFSC Code — RBI 11-Character Branch Identifier for NEFT/RTGS/IMPSThe IFSC (Indian Financial System Code) is an RBI-assigned 11-character alphanumeric code uniquely identifying a bank branch for electronic fund transfers via NEFT, RTGS, and IMPS — distinct from IFSCA/GIFT City codes.5 min read
- Bank Nifty (Nifty Bank)Bank Nifty (official name: Nifty Bank) is a sectoral index comprising the 12 most liquid and large-cap banking stocks listed on NSE, weighted by free-float market capitalisation. It is India's most actively traded banking-sector derivatives contract.7 min read
- Bid-Ask SpreadThe difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask). A narrower spread signals higher liquidity.5 min read
- Bitcoin in IndiaBitcoin is the largest VDA by market cap. Legal to hold in India; not legal tender. SC March 2020 lifted RBI's 2018 banking ban. Gains taxed at 30% flat under §115BBH.4 min read
- Bonus IssueFree additional shares issued to existing shareholders by capitalising reserves; no cash inflow or outflow — proportional holding unchanged, share price adjusts downward.4 min read
- Book Value per Share: Definition, Calculation, and Market Premium DynamicsBook Value per Share is net assets divided by shares outstanding — the accounting floor against which market prices are benchmarked. Learn how Ind AS affects book value, why market-to-book premiums exist, and when book value is and is not a useful anchor.12 min read
- Share BuybackA company's repurchase of its own shares from the market under SEBI Buy-Back Regulations 2018, via tender offer or open market route; tax treatment changed materially under Finance Act 2024.5 min read
C
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- Callable BondA bond that gives the issuer the right to redeem (call) it before the stated maturity date, typically when interest rates fall. Investors bear reinvestment risk — the call is exercised precisely when replacement yields are lower. SEBI mandates disclosure of call provisions in all listed bond offer documents.6 min read
- Capital Protection Fund — SEBI Close-Ended Hybrid Category with Indicative Capital Preservation StructureA SEBI close-ended hybrid category using a debt-plus-equity structure to target capital preservation at maturity. The protection is structural and indicative — not guaranteed by the AMC or SEBI.8 min read
- Children's Fund — SEBI Solution-Oriented Category for Child Education GoalsA Children's Fund is a SEBI solution-oriented mutual fund scheme with a mandatory 5-year lock-in or lock-in until the child attains majority (age 18), whichever is earlier. Available in gift/education equity and debt-oriented variants.6 min read
- Circuit LimitA regulatory price band (5%, 10%, or 20% for stocks; 10/15/20% for indices) that halts or restricts trading when prices move too far in a single session. Set by SEBI and enforced by NSE/BSE.4 min read
- Close-Ended FundA close-ended mutual fund has a fixed maturity date, accepts subscriptions only during the initial New Fund Offer (NFO) period, and does not allow ongoing redemptions before maturity. Units may be listed on exchanges to provide secondary-market liquidity.4 min read
- Conservative Hybrid Fund — SEBI Hybrid Mutual Fund Category with Debt-Dominant AllocationA SEBI-defined hybrid category investing 75–90% in debt and 10–25% in equity, designed for income generation with limited equity upside.8 min read
- Contra Fund — SEBI Equity Mutual Fund Category with Contrarian Investment StyleA contra fund is a SEBI-defined equity mutual fund that follows a contrarian investment strategy — buying stocks that are currently out of favour, undervalued, or overlooked by the market, with a minimum 65% equity allocation.8 min read
- Country FundA country fund is a mutual fund or ETF concentrating exposure in a single foreign country — such as Edelweiss US Technology Fund or Motilal Oswal Nasdaq 100 FoF — carrying concentrated country and currency risk.6 min read
- Coupon (Bond)The periodic interest payment made by a bond issuer to the bondholder, expressed as a percentage of face value. Bonds may carry fixed, floating, or zero coupons, each with distinct interest-rate and reinvestment-risk profiles.5 min read
- Consumer Price Index (CPI) — IndiaCPI is India's primary retail inflation gauge and the anchor for RBI's monetary policy framework. Understanding CPI helps investors anticipate repo rate changes and their ripple effects on bonds, equities, and fixed deposits.7 min read
- Credit Risk FundA SEBI-categorised debt fund that invests a minimum of 65% in corporate bonds rated AA and below, deliberately taking on higher credit risk in exchange for potentially higher yields.7 min read
- Credit SpreadThe yield premium demanded by the market for a non-sovereign bond over a comparable-maturity Government Security (G-Sec), compensating investors for default risk, liquidity risk, and credit-rating uncertainty.5 min read
- Critical Illness Cover — Lump-Sum Diagnosis BenefitCritical illness insurance pays a predefined lump sum on diagnosis of a listed condition (cancer, heart attack, stroke, etc.) — not a reimbursement of actual expenses. IRDAI has standardised a list of covered conditions. Premiums qualify for Section 80D.6 min read
- Cash Reserve Ratio (CRR)CRR mandates that banks park a percentage of their net demand and time liabilities (NDTL) as cash with RBI. Changes to CRR directly alter the money supply and banking system liquidity without changing interest rates.7 min read
- Crypto Exchange IndiaIndian crypto exchanges must be FIU-IND registered under PMLA (March 2023), GSTN registered, with mandatory KYC. They deduct 1% TDS under §194S. Reporting threshold ₹10 lakh.4 min read
- Crypto Tax in India (§115BBH)Cryptocurrency gains are taxed at 30% flat under §115BBH of the Income Tax Act, inserted by Finance Act 2022. No set-off, no loss carry-forward, and 1% TDS under §194S applies.4 min read
- Crypto WalletA crypto wallet stores the private keys controlling VDA holdings. Hot wallets are internet-connected; cold wallets are offline. Custodial wallets (exchanges) vs non-custodial. PAN linkage enables IT surveillance.4 min read
- Currency HedgingCurrency hedging neutralises foreign-exchange risk in an international portfolio by using derivatives to lock in a known conversion rate — reducing INR-USD volatility but incurring a hedging cost.6 min read
- Custodian (Mutual Fund)A SEBI-registered Custodian holds mutual fund scheme securities in segregated accounts, independent of the AMC. Daily reconciliation against the AMC's records is mandatory under SEBI Custodian Regulations.5 min read
- Cut-off Time (NAV Applicability)Cut-off time is the SEBI-mandated deadline by which a mutual fund must receive a valid purchase or redemption request with realized funds to apply that business day's NAV to the transaction.5 min read
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- Debt FundA SEBI-categorised mutual fund that invests primarily in fixed-income and money-market instruments such as government securities, corporate bonds, commercial paper, and certificates of deposit.7 min read
- Debt-to-Equity Ratio: Definition, Calculation, and Sector NormsThe Debt-to-Equity ratio measures how much a company relies on borrowed funds versus shareholder equity. Learn how to calculate it, what norms look like across Indian sectors, and what the empirical literature says about leverage and returns.12 min read
- DeFi in India (Decentralised Finance)DeFi refers to peer-to-peer financial protocols on blockchains. FIU-IND PMLA mandate (March 2023) covers VASPs; OFAC sanctions exposure applies. All VDA gains taxed at 30% §115BBH.4 min read
- DelistingPermanent removal of a company's shares from stock exchange trading under SEBI Delisting Regulations 2021; voluntary route uses reverse book-building with a SEBI-mandated floor price.5 min read
- Demat Account — Dematerialised Securities, SEBI Depositories Act 1996, CDSL & NSDLA demat account holds securities (equities, bonds, MF units, ETFs, SGBs) in electronic form under the SEBI Depositories Act 1996, custodied by NSDL or CDSL through registered depository participants (DPs).7 min read
- Demerger (Scheme of Arrangement)A court-sanctioned restructuring under Companies Act §232 where a business undertaking is transferred to a new or existing company; tax-neutral under IT Act §47(vid) with CBDT cost-basis split.6 min read
- Dividend Yield: Definition, Tax Treatment Post-Finance Act 2020, and Indian Market ContextDividend Yield measures annual dividend per share as a percentage of the current stock price. Since Finance Act 2020 abolished Dividend Distribution Tax (DDT) and shifted dividend taxation to shareholders, the after-tax yield calculation has changed materially for Indian investors.12 min read
- Dividend Yield Fund — SEBI Equity Category Focused on High-Dividend-Yield StocksA SEBI equity fund category requiring ≥65% in stocks with dividend yield higher than the benchmark index yield, targeting income-generating equity with relative valuation discipline.8 min read
- Dollar Cost Averaging (DCA) / SIPInvesting a fixed sum at regular intervals regardless of price, automatically buying more units when markets fall and fewer when they rise — India's SIP model is the world's largest implementation.7 min read
- DTAA (Double Taxation Avoidance Agreement)A DTAA is a bilateral treaty between India and another country that allocates taxing rights so cross-border income is not fully taxed in both jurisdictions.4 min read
- Dynamic Asset Allocation Fund — SEBI Hybrid Category with Tactically Managed Equity-Debt MixAlso known as Balanced Advantage Fund, this SEBI hybrid category dynamically shifts equity allocation between 30–80% using quantitative or model-driven frameworks to manage valuation risk.8 min read
- Dynamic Bond FundA SEBI-categorised debt fund with no Macaulay duration restriction, allowing the fund manager to actively shift duration across the full yield curve based on interest rate outlook — from overnight to 30+ years.8 min read
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- EBITDA: Definition, Calculation, and Limitations in Equity AnalysisEBITDA strips out financing and accounting choices to reveal operating profit. Learn how it differs from EBIT and net income, how it is used in Indian equity and credit analysis, and its well-documented limitations.13 min read
- ELSS (Equity Linked Savings Scheme)ELSS is an equity mutual fund category with a 3-year lock-in that qualifies for Section 80C tax deduction up to ₹1.5 lakh per year under the old tax regime.4 min read
- EPF — Employees' Provident FundEmployees Provident Fund (EPF) is a mandatory retirement-savings scheme for salaried employees in establishments with 20+ workers, administered by EPFO under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. How it works: Employee1 min read
- Earnings Per Share (EPS): Basic, Diluted, Adjusted — and SEBI LODR Quarterly MandateEPS is the portion of a company's net profit attributable to each equity share. SEBI LODR 2015 Regulation 33 mandates quarterly EPS disclosure for all listed Indian companies. Learn the difference between basic, diluted, and adjusted EPS under Ind AS 33.12 min read
- Equity Savings Fund — SEBI Hybrid Category Using Arbitrage to Achieve Equity Tax TreatmentA SEBI hybrid category combining unhedged equity with arbitrage and debt, designed to provide equity tax treatment at near-hybrid risk levels. Capital is not guaranteed.8 min read
- Ethereum in IndiaEthereum (ETH) is the second-largest VDA; a smart-contract blockchain platform. Taxed identically to Bitcoin under §115BBH (30% flat) and §194S (1% TDS) in India.4 min read
- Exit Load PeriodThe exit load period is the minimum holding window during which a mutual fund charges an exit load on redemption. SEBI Regulation 49 governs load structure; exit loads must be credited back to the scheme, not the AMC.5 min read
- Expiry (F&O)Expiry (or expiration) is the last trading day of a futures or options contract, after which the contract is settled (cash or physical delivery) and ceases to exist. In India, equity index options have weekly expiry (Thursdays); single-stock F&O expires monthly (last Thursday).8 min read
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- F&O Basics (Futures & Options)Futures and options are exchange-traded derivative contracts. They provide leverage and are used for hedging or speculation. F&O carries leverage which amplifies both gains and losses.5 min read
- Face Value (Bond)The principal amount a bond issuer promises to repay at maturity — also called par value or redemption value. Face value anchors the coupon payment calculation and determines whether a bond trades at a premium, par, or discount.5 min read
- FATCA (Foreign Account Tax Compliance Act)FATCA is a US law requiring foreign financial institutions to identify and report US-person accounts to the IRS. Indian mutual fund investors must submit a FATCA self-declaration at KYC.4 min read
- Free Cash Flow Yield (FCF Yield): Definition, Calculation Under Ind AS 7, and Use in Equity ValuationFCF Yield divides a company's free cash flow — operating cash flow minus capital expenditure — by its market capitalisation. It is a debt-agnostic, earnings-quality measure. Learn how to compute it from Ind AS 7 cash flow statements.13 min read
- FCNR(B) Account (Foreign Currency Non-Resident Bank Deposit)A foreign-currency term deposit in India for NRIs — available in USD, GBP, EUR, JPY, AUD, CAD — with tax-free interest under Section 10(4)(i) IT Act and full repatriation rights.1 min read
- Fixed Deposit (FD) — Term Deposit, Interest Rates & Premature WithdrawalA fixed deposit (term deposit) is a time-bound bank deposit earning a contracted interest rate. RBI deregulated FD rates in October 2011; interest is taxable as income from other sources with TDS if annual payout exceeds ₹40,000.6 min read
- Flexi-Cap FundFlexi-cap funds must invest at least 65% in equities with no mandatory allocation across market-cap segments. Created by SEBI in September 2020, they give fund managers full discretion to shift between large, mid, and small-cap stocks based on market conditions.4 min read
- Floating-Rate BondA bond whose coupon rate resets periodically against a reference benchmark (91-day T-bill rate or MIBOR), reducing duration risk for investors compared to fixed-coupon bonds. RBI issues Floating Rate Savings Bonds (FRSB) directly to retail investors.5 min read
- Focused FundFocused funds are SEBI-categorised equity schemes limited to a maximum of 30 stocks across any market-cap segment. The concentrated portfolio structure is designed to reflect the fund manager's highest-conviction ideas.4 min read
- FoF (Domestic) — SEBI Fund of Funds Category Investing in Indian Mutual Fund SchemesA SEBI mutual fund category that invests exclusively in other domestic mutual fund schemes, resulting in a two-layer expense ratio structure and debt-fund tax treatment post Finance Act 2023.8 min read
- FoF (Overseas) — SEBI Fund of Funds Category Investing in Foreign Equities and ETFsA SEBI mutual fund category investing in foreign funds or ETFs, providing Indian investors global exposure within a domestic wrapper; taxed at slab rate post Finance Act 2023.8 min read
- Forex CardA forex card is a prepaid multi-currency card that lets Indian residents and NRIs load foreign currency at a locked rate for overseas travel or spending — subject to LRS limits and TCS above ₹7 lakh.5 min read
- FPO (Follow-on Public Offer)A subsequent public equity offering by an already-listed company to raise additional capital or enable promoter/investor divestment, governed by SEBI ICDR Regulations 2018.5 min read
- Fund of Funds (FoF)A Fund of Funds is a mutual fund that invests in other mutual fund schemes rather than directly in stocks or bonds — commonly used to access international funds, with a double-layer expense ratio and distinct SEBI tax treatment.6 min read
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- Gross Domestic Product (GDP) — IndiaGDP is the broadest measure of India's economic output, released quarterly by the National Statistical Office. Real GDP growth drives corporate earnings cycles, equity valuations, and the RBI's monetary policy stance.7 min read
- Global Depositary Receipt (GDR)A GDR is a bank certificate representing shares in a foreign company, listed on international exchanges such as London or Luxembourg — ICICI Bank and Infosys have active GDR programmes.5 min read
- GIFT City (Gujarat International Finance Tec-City)India's first operational IFSC SEZ in Gandhinagar — governed by IFSCA Act 2019 — where NRIs can invest in USD-denominated instruments outside the FEMA restrictions applicable onshore.4 min read
- Gilt FundA SEBI-categorised debt fund that invests a minimum of 80% in government securities (G-Secs) issued by the Central or State governments, across varying maturities.7 min read
- Growth Fund — SEBI Equity Mutual Fund Category with Growth-Investment StyleA Growth Fund is a SEBI-defined equity mutual fund that pursues a growth-investment strategy — targeting companies with above-average earnings or revenue growth rates — with a minimum 65% equity allocation.8 min read
- Growth vs IDCW — Comparing Mutual Fund Plan OptionsGrowth and IDCW are the two primary options within any mutual fund scheme. They hold identical underlying portfolios but diverge on NAV trajectory, tax treatment, and liquidity: Growth reinvests all gains; IDCW distributes them periodically.8 min read
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- Health Insurance — Hospitalisation Cover in IndiaHealth insurance (mediclaim) reimburses hospitalisation and medical expenses. Governed by IRDAI Health Insurance Regulations 2016. Available as individual, family floater, or group policies; premiums qualify for Section 80D deduction.7 min read
- Herd BehaviorThe tendency of investors to mimic crowd actions, producing momentum-driven bubbles and panics that disconnect prices from fundamental value.7 min read
- Hybrid FundA hybrid mutual fund invests in a combination of equity and debt instruments. SEBI's October 2017 categorisation circular defines six hybrid sub-categories — each with distinct equity-to-debt allocation ranges — from conservative hybrid to multi-asset allocation.5 min read
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- IDCW — Income Distribution cum Capital Withdrawal in Mutual FundsIDCW is the SEBI-mandated name (from April 2021) for what was previously called the "dividend" option in mutual funds. It correctly signals that payouts come from accumulated gains or capital, not standalone income.8 min read
- IFSC Code (Indian Financial System Code)An 11-character RBI-assigned alphanumeric code identifying a bank branch in India's NEFT/RTGS payment network — mandatory for all domestic and NRI inward remittances to Indian accounts.4 min read
- IMPS — Immediate Payment Service (NPCI 24x7 Up to ₹5 Lakh)IMPS is an NPCI-operated 24x7 instant interbank payment system using MMID or account+IFSC, supporting up to ₹5 lakh per transaction, with real-time credit and irrevocable settlement via mobile, internet, and ATM channels.5 min read
- Inflation-Indexed Bond (IINSS-C)A GoI-issued bond whose principal and coupon payments are linked to the Consumer Price Index (CPI), protecting investors from purchasing-power erosion. The RBI's IINSS-C (2013) is India's primary retail inflation-linked bond instrument.6 min read
- Information RatioInformation Ratio (IR) = active return / tracking error. Measures consistency of active management skill. An IR above 0.5 indicates competent outperformance relative to active risk taken vs benchmark.3 min read
- INR-USD Exchange RateThe INR-USD rate measures how many Indian rupees buy one US dollar — a key driver of international portfolio returns, remittance value, and import-led inflation in India.5 min read
- Insurance Riders — Add-On Benefits on Base PoliciesInsurance riders are optional add-on benefits attached to a base life or health insurance policy for additional premium. Common riders include accidental death benefit, critical illness, waiver of premium, and hospital cash. Governed by IRDAI product regulations.6 min read
- International Fund (Mutual Fund)An international fund is a SEBI-categorised Indian mutual fund that invests at least 80% of its assets in overseas equities — providing global diversification without requiring the investor to use LRS.6 min read
- Intra-Day TradingBuying and selling the same security within the same trading session (same day). STT is 0.025% on sell side only. Profits are taxed as speculative income under Section 43(5) of the Income Tax Act.5 min read
- InvIT — Infrastructure Investment Trust1 min read
- IPO (Initial Public Offering)A company's first sale of shares to the public via a SEBI-regulated book-building or fixed-price process, governed by ICDR Regulations 2018.5 min read
- IRDAI — Insurance Regulatory and Development Authority of IndiaIRDAI (Insurance Regulatory and Development Authority of India) is the statutory regulator for the Indian insurance sector, established under the IRDAI Act 1999. It licenses insurers, approves products, sets solvency standards, and protects policyholder interests.6 min read
- IRRIRR (Internal Rate of Return) is the discount rate that sets NPV to zero for a series of equal-interval cash flows. Foundation of XIRR (which handles irregular dates). Distinct from CAGR which needs only two values.3 min read
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- Large-CapLarge-cap funds invest in the top 100 companies by market capitalisation as defined by SEBI's October 2017 categorisation circular. They offer relative stability and liquidity compared with mid- and small-cap segments.4 min read
- Limit OrderAn instruction to buy or sell a security at a specified price or better. Gives price certainty but may not execute if the market does not reach your price.4 min read
- Liquid FundA SEBI-categorised debt fund that invests exclusively in money-market instruments and debt securities with residual maturity of up to 91 days, offering T+1 redemption for up to ₹50,000.7 min read
- Long Duration FundA SEBI-categorised debt fund that maintains a Macaulay duration of 7 years or more in its portfolio, providing maximum interest-rate sensitivity and the highest potential for capital appreciation during rate-cutting cycles.8 min read
- Loss AversionKahneman & Tversky's Prospect Theory finding that losses hurt approximately 2–2.5× more than equivalent gains feel good, producing asymmetric and often suboptimal financial decisions.7 min read
- Lot Size (F&O)The minimum number of shares in one F&O contract on NSE/BSE. SEBI and NSE revise lot sizes every six months to maintain notional contract value near ₹5–10 lakh.5 min read
- LRS (Liberalised Remittance Scheme)LRS is the RBI framework allowing Indian resident individuals to remit up to USD 250,000 per financial year abroad for education, travel, gifts, investments, and other permitted purposes.4 min read
M
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- Market Capitalisation: Definition, SEBI Categories, and Use in Equity AnalysisMarket capitalisation is total shares outstanding multiplied by current share price. SEBI's October 2017 Categorization Circular formally defined large-cap, mid-cap, and small-cap boundaries by market cap rank, shaping how mutual funds, indices, and regulations treat Indian listed companies.14 min read
- Market OrderAn instruction to buy or sell a security immediately at the best available price. Guarantees execution but not the price you receive.4 min read
- Market TimingThe attempt to predict market highs and lows to shift allocation between equity and cash or bonds; empirical success rates are approximately 5% per SEBI 2024 retail data and Dalbar QAIB across multiple market cycles.7 min read
- Marginal Cost of Funds-based Lending Rate (MCLR)MCLR replaced the Base Rate system in 2016 as RBI's benchmark for bank lending rates. Understanding MCLR helps borrowers and fixed-income investors assess loan repricing dynamics and the speed of monetary policy transmission.7 min read
- Medium Duration FundA SEBI-categorised debt fund that maintains a Macaulay duration of 3 to 4 years, targeting the intermediate part of the yield curve with moderate credit and duration exposure.7 min read
- MFD vs RIA — Mutual Fund Distributor vs SEBI Registered Investment AdviserAn MFD (Mutual Fund Distributor) is an AMFI ARN-registered intermediary who distributes mutual fund products and earns commissions from AMCs. A SEBI Registered Investment Adviser (RIA) is licensed under SEBI IA Regulations 2013 to provide fee-based investment advice. The regulatory, economic, and fiduciary distinction between the two is fundamental.8 min read
- Mid-CapMid-cap funds invest in companies ranked 101–250 by market capitalisation as defined by SEBI's October 2017 categorisation circular. They occupy the risk-return space between large-cap stability and small-cap growth potential.4 min read
- Modified DurationA bond's price sensitivity to a 1% change in yield, derived by dividing Macaulay Duration by (1 + y/m). The primary measure of interest-rate risk for fixed-income portfolios.5 min read
- Margin Trading Facility (MTF)MTF allows investors to buy stocks using broker-funded credit, pledging securities as collateral. Regulated under SEBI MTF Regulations 2013. Positions can be held beyond intra-day, unlike MIS.5 min read
- Multi-Asset Fund — Mandatory Allocation Across 4+ Asset ClassesA Multi-Asset Fund is a SEBI-defined hybrid category that must invest ≥10% each in at least three asset classes (equity, debt, and one more — typically gold or REITs/InvITs). It functions as a single-ticket diversified portfolio.6 min read
- Multi-Cap FundMulti-cap funds must invest at least 25% each in large-cap, mid-cap, and small-cap stocks as mandated by SEBI's September 2020 circular. The mandatory allocation ensures genuine multi-cap exposure rather than large-cap dominance.4 min read
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- NACH — National Automated Clearing House (NPCI Mandate-Based ECS)NACH is NPCI's centralised mandate-based payment system for repetitive high-volume transactions — SIP debit mandates, EMI collections, dividend credits — replacing the legacy ECS with a standardised digital mandate registration via NPCI Mandate Management System.6 min read
- Narrative FallacyThe human tendency to construct coherent causal stories from random or complex events, causing investors to mistake compelling narratives for data-backed investment theses.7 min read
- NEFT — National Electronic Funds Transfer (RBI Deferred Net Settlement)NEFT is an RBI-operated deferred net settlement system for electronic funds transfers, operating 24x7 on an hourly batch basis since December 2019, with credit to beneficiary typically within 30 minutes to 2 hours.5 min read
- NFO — New Fund OfferA New Fund Offer (NFO) is the initial subscription window during which an AMC collects capital to launch a new mutual fund scheme. SEBI caps the window at 15 business days.5 min read
- NFT Tax in IndiaNFTs are VDAs under §2(47A). Gains on sale taxed at 30% flat under §115BBH. Royalties (creator income) taxed separately as professional income at slab rates. 1% TDS under §194S.4 min read
- Nifty 50The Nifty 50 is the flagship benchmark index of the National Stock Exchange (NSE), tracking the free-float market-capitalisation-weighted performance of the 50 largest and most liquid companies listed on NSE across 13 sectors.7 min read
- Nifty Midcap 100 — NSE Index of Mid-Capitalisation CompaniesThe Nifty Midcap 100 is an NSE index comprising the 101st to 200th ranked companies by free-float market capitalisation, rebalanced semi-annually using the AMFI bi-annual market-cap classification list.8 min read
- Nifty Smallcap 250 — NSE Index of Small-Capitalisation CompaniesThe Nifty Smallcap 250 is an NSE index comprising companies ranked 251st to 500th by free-float market capitalisation, rebalanced semi-annually per the AMFI bi-annual classification list.8 min read
- No-Claim Bonus (NCB) — Health Insurance Reward for Claim-Free YearsNo-Claim Bonus (NCB) in health insurance is an increase in sum insured awarded for each claim-free policy year, at no additional premium. IRDAI mandates NCB disclosure in health policies; accumulated NCB is portable across insurers on porting.5 min read
- Non-Repatriable FundsFunds held in India — primarily NRO balances and NRO-funded investments — that cannot be freely remitted abroad; repatriation is capped at USD 1 million per financial year with documentation under FEMA.4 min read
- NPS — National Pension SystemNational Pension System (NPS) is a government-sponsored, defined-contribution retirement plan regulated by PFRDA. It is open to all Indians aged 18-70 and offers ultra-low-cost market-linked equity, corporate-debt, government-bond, and alternative-as1 min read
- NRE Account (Non-Resident External Account)A fully repatriable Indian rupee bank account for NRIs where interest income is exempt from Indian tax under Section 10(4)(ii) of the Income Tax Act.1 min read
- NRI PMS (NRI Portfolio Management Service)A SEBI-licensed, directly-held investment service for NRIs with minimum Rs 50 lakh ticket under SEBI Portfolio Managers Regulations 2020, accessible via the RBI FEMA NRI-OPI route.4 min read
- NRO Account (Non-Resident Ordinary Account)An Indian rupee account for NRIs to receive India-sourced income; interest is taxed at 30% TDS and repatriation is capped at USD 1 million per financial year under RBI FEMA rules.1 min read
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- OFS (Offer for Sale)A SEBI 2012 mechanism enabling large shareholders to sell existing shares via the stock exchange within a compressed 1–2 day window without a full prospectus filing.5 min read
- Open Market Operations (OMO)OMOs are RBI's mechanism to manage banking system liquidity by buying or selling G-Secs in the secondary market. OMO purchases inject liquidity and support bond prices; OMO sales drain liquidity and exert upward pressure on yields.7 min read
- Open-Ended FundAn open-ended mutual fund has no fixed maturity date and allows investors to subscribe or redeem units at the prevailing NAV on any business day. It is the most common fund structure in India under SEBI Mutual Fund Regulations 1996.4 min read
- Overnight FundA SEBI-categorised debt fund that invests exclusively in overnight securities — instruments with a residual maturity of exactly one business day — offering the lowest duration and credit risk in the mutual fund universe.6 min read
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- P/B Ratio (Price-to-Book): Definition, Calculation, and Use in Indian MarketsThe Price-to-Book ratio compares a stock's market price to its net book value per share. Especially useful for financial sector analysis, P/B is central to understanding bank valuations, capital efficiency, and sector-specific norms.13 min read
- P/E Ratio (Price-to-Earnings): Definition, Calculation, and InterpretationThe Price-to-Earnings ratio divides a stock's current share price by its earnings per share. Learn how trailing vs. forward P/E differ, what Nifty 50's historical ~20× average means, and why sector context is essential.12 min read
- PIS (Portfolio Investment Scheme)PIS is the RBI framework under FEMA that allows NRIs and OCIs to buy and sell Indian listed equities and convertible debentures on stock exchanges via a designated bank account.4 min read
- POMIS — Post Office Monthly Income Scheme1 min read
- PPF — Public Provident FundPublic Provident Fund (PPF) is a long-term, government-guaranteed small-savings scheme open to all Indian residents (NRIs cannot open new accounts). It offers tax-free interest, EEE tax status, and sovereign credit risk. How it works: Open at any pos1 min read
- Premium Mode — Annual vs Monthly vs Quarterly Insurance Premium PaymentPremium mode is the frequency of insurance premium payment — annual, semi-annual, quarterly, or monthly. Non-annual modes carry modal loadings (insurers charge a small uplift for sub-annual payment), increasing total annual outgo. Annual mode is the cheapest per rupee of coverage.5 min read
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- QIB, NII, and RII — IPO/FPO Investor Category FrameworkIndian IPOs and FPOs divide subscriptions into three statutory categories: Qualified Institutional Buyers (QIB), Non-Institutional Investors (NII), and Retail Individual Investors (RII), each with defined SEBI quotas, bid sizes, and allotment mechanics under ICDR 2018.9 min read
- Quartile RankingQuartile ranking places a mutual fund in Q1 (top 25%), Q2, Q3, or Q4 (bottom 25%) within its SEBI sub-category peer group by return or risk-adjusted return. AMFI categorisation circular defines peer groups.3 min read
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- RBI CBDC — Digital Rupee (eRupee)RBI's Central Bank Digital Currency (eRupee) is sovereign digital legal tender, not a VDA or cryptocurrency. Retail pilot launched December 2022. Distinct from UPI, which is digital payments infrastructure.4 min read
- RebalancingThe periodic or threshold-triggered process of restoring a portfolio to its target asset allocation, mechanically selling outperformers and buying underperformers to maintain risk discipline.7 min read
- Recency BiasThe cognitive tendency to over-weight recent events when forecasting, causing investors to chase last year's winners and flee last year's losers.7 min read
- Recurring Deposit (RD) — Monthly Instalment Savings & Tax TreatmentA recurring deposit (RD) is a regular monthly deposit scheme where equal instalments accumulate with compound interest to a lump-sum maturity value. Interest taxation mirrors FD rules under IT Act; Post Office RDs offer sovereign backing.6 min read
- Redemption (Mutual Fund)Redemption is the process of selling mutual fund units back to the scheme at NAV. Under SEBI MF Regulation 49, proceeds must be dispatched within T+1 business days for equity funds and T+2 for debt funds.5 min read
- Regret AversionThe tendency to avoid making decisions that could lead to regret, causing investors to defer action, hold crowded positions, and systematically under-rebalance — formalised by Bell (1982).7 min read
- REIT — Real Estate Investment Trust1 min read
- Repatriable FundsFunds held in India that can be freely remitted abroad without RBI approval or monetary cap — primarily NRE account balances, FCNR(B) proceeds, and investments made on the repatriable route under FEMA.3 min read
- Repo Rate — RBI Policy RateThe repo rate is RBI's primary monetary policy instrument — the rate at which RBI lends overnight funds to banks. Changes to repo rate transmit to FD yields, lending rates, bond prices, and equity valuations, making it the single most-watched RBI announcement for investors.7 min read
- Retirement Fund — SEBI Solution-Oriented Category with 5-Year Lock-InA Retirement Fund is a SEBI solution-oriented mutual fund scheme with a mandatory 5-year lock-in or lock-in until retirement age (whichever is earlier). Available in aggressive, moderate, and conservative variants.6 min read
- Returning NRI Tax Treatment (RNOR Transition + Asset Re-Domiciliation)When an NRI returns permanently to India, residency transitions through RNOR status for up to 2 financial years — foreign income stays exempt while Indian income becomes taxable and FEMA account re-designation obligations activate.5 min read
- Reverse Repo Rate — RBI Liquidity AbsorptionThe reverse repo rate is the rate at which RBI borrows from banks overnight, absorbing surplus liquidity from the banking system. Since 2022, the Standing Deposit Facility (SDF) has functionally replaced reverse repo as the floor of RBI's interest rate corridor.7 min read
- Rights IssueAn offer by a listed company to existing shareholders to subscribe to new shares at a discount in proportion to their current holding; can be renounceable or non-renounceable.5 min read
- Return on Equity (ROE): Definition, DuPont Decomposition, and Indian Market ContextROE measures how efficiently a company converts shareholder capital into profit. The DuPont framework decomposes ROE into net margin, asset turnover, and financial leverage — revealing the true drivers behind the headline number.13 min read
- Registrar and Transfer Agent (RTA)An RTA — CAMS or KFin Technologies for most AMCs — processes all mutual fund investor transactions, maintains folio records, and generates account statements under SEBI RTA Regulations 1993.5 min read
- RTGS — Real-Time Gross Settlement (RBI ₹2 Lakh Minimum)RTGS is the RBI's real-time gross settlement system for high-value transfers (minimum ₹2 lakh), where each transaction is settled individually and immediately in the RBI's books, available 24x7 since December 2020.5 min read
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- Savings Account — Definition, Interest Calculation & Tax TreatmentA savings account is a basic deposit product offered by scheduled commercial banks under RBI's Master Direction on Interest Rate on Deposits, earning interest calculated on daily closing balance since 2010.6 min read
- Schedule FA (Foreign Asset Disclosure in ITR)Mandatory ITR schedule for resident Indians and RNORs to disclose all foreign assets held during the calendar year — non-disclosure attracts up to 7-year imprisonment and 300% penalty under the Black Money Act 2015.4 min read
- SCSS — Senior Citizens Savings Scheme1 min read
- Sector Fund — SEBI Equity Category with ≥80% Concentration in a Single SectorA SEBI equity fund category requiring at least 80% of assets in a single sector (e.g., IT, Pharma, Banking), carrying the highest concentration risk among equity fund categories.8 min read
- Sectoral IndexA sectoral index tracks the performance of a specific industry segment — IT, Pharma, Auto, FMCG, etc. — using the same free-float market-cap methodology as the broad market index, but restricted to eligible stocks in that sector.7 min read
- SensexThe Sensex (S&P BSE Sensex) is the oldest and most widely quoted equity benchmark of BSE (Bombay Stock Exchange), comprising 30 financially sound and well-established companies across key sectors of the Indian economy.7 min read
- SettlementThe process by which a securities trade is finalised — cash moves from buyer to seller, shares move from seller to buyer. India uses rolling settlement (T+1 since Jan 2023) for equity cash markets.5 min read
- SGB — Sovereign Gold Bond1 min read
- Shareholding Pattern — SEBI LODR Quarterly Disclosure of Listed Company OwnershipShareholding pattern is a mandatory quarterly filing by every BSE/NSE-listed company under SEBI LODR Regulations 2015 (Reg-31), disclosing the percentage stake held by promoters, FPIs, DIIs, mutual funds, insurance, public, and other categories.9 min read
- Sharpe RatioSharpe Ratio measures excess return per unit of total risk (standard deviation). MintByte uses period-average 91-day RBI T-bill rate (4.4% as at 2026-06-02) matching AdvisorKhoj methodology.3 min read
- Short Duration FundA SEBI-categorised debt fund that maintains a Macaulay duration of 1 to 3 years in its portfolio, balancing yield pickup with moderate interest-rate sensitivity.7 min read
- SIP (Systematic Investment Plan)A Systematic Investment Plan (SIP) lets investors contribute a fixed amount to a mutual fund at regular intervals, automating rupee-cost averaging over market cycles.4 min read
- SIP PauseA SIP Pause temporarily suspends a Systematic Investment Plan without cancellation. AMFI Best Practices allow a pause window of 1–3 months; the SIP auto-resumes after the pause period without requiring fresh registration.5 min read
- Statutory Liquidity Ratio (SLR)SLR requires banks to hold a percentage of NDTL in approved liquid assets — primarily government securities. SLR reductions create room for private credit; high SLR historically funded fiscal deficits at the cost of private sector credit.7 min read
- Small-CapSmall-cap funds invest in companies ranked 251 and below by market capitalisation as defined by SEBI's October 2017 categorisation circular. They carry higher volatility and liquidity risk in exchange for potentially higher long-term growth.4 min read
- SmallcaseA smallcase is a curated basket of listed stocks or ETFs themed around a strategy or sector. Unlike mutual funds, underlying securities sit directly in the investor's demat account.4 min read
- Smart Beta Fund — Factor-Tilted Index FundsSmart Beta Funds are passively managed index funds that track factor-based indices (momentum, quality, low volatility, value, alpha-50) instead of market-cap-weighted indices. AMFI classifies them under the passively-managed sub-category.7 min read
- Solution-Oriented Fund — SEBI Umbrella Category with Mandatory Lock-InSolution-Oriented Funds are a SEBI umbrella category covering Retirement Funds and Children's Funds. All schemes in this category carry a mandatory lock-in of 5 years or the qualifying event (retirement/majority), whichever is earlier.5 min read
- Sortino RatioSortino Ratio measures excess return per unit of downside deviation only — unlike Sharpe which penalises all volatility. Better suited for negatively-skewed Indian equity fund return distributions.3 min read
- S&P 500 IndexThe S&P 500 is a market-cap-weighted index of 500 large-cap US public companies — the closest American equivalent to India's Nifty 50 in scope and benchmark dominance.5 min read
- Spin-offA corporate restructuring where a parent company creates a separate, independently listed public entity by distributing shares of a subsidiary to existing shareholders.5 min read
- Sponsor (Mutual Fund)The Sponsor establishes a mutual fund under SEBI MF Regulations 1996, must have a minimum net worth of ₹50 crore, a 5-year profitable track record, and hold at least 40% of the AMC's equity.5 min read
- Standard DeviationStandard Deviation (σ) measures the spread of a fund's periodic returns around the mean — annualised using √252 (daily) or √12 (monthly) scaling. SEBI mandates 3-year annualised σ disclosure per Circular 2021/647.3 min read
- Stock SplitA corporate action reducing each share's face value (e.g., ₹10 → ₹2) and proportionally increasing share count; total market capitalisation and shareholder value are unchanged.4 min read
- STP (Systematic Transfer Plan)A Systematic Transfer Plan (STP) transfers a fixed amount from one mutual fund to another within the same AMC at regular intervals, commonly used to deploy a lumpsum into equity gradually.4 min read
- Switch (Mutual Fund)A Switch transfers units from one mutual fund scheme to another within the same AMC. SEBI MF Regulations treat a switch as a simultaneous redemption and purchase — triggering exit load and capital gains tax on the source scheme.5 min read
- SWP (Systematic Withdrawal Plan)A Systematic Withdrawal Plan (SWP) redeems a fixed amount from a mutual fund at regular intervals, converting an accumulated corpus into a structured income stream.4 min read
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- Treasury Bill (T-Bill) — IndiaTreasury Bills are short-term, zero-coupon, sovereign-backed government securities issued by the Government of India via RBI auctions. They are the risk-free benchmark for Indian money markets and a key SLR-eligible instrument for banks.7 min read
- T+1 SettlementSEBI mandated T+1 rolling settlement for all NSE/BSE equity from January 2023 — trades settle on the next trading day. India was among the first major markets globally to implement T+1.4 min read
- Target Maturity Fund — Defined-Maturity Debt Fund with Held-to-Maturity Yield LockA Target Maturity Fund (TMF) is a passively managed open-ended debt fund that tracks a defined-maturity G-Sec or SDL index. Investors who hold to the maturity date receive approximately the yield-to-maturity at entry. Bharat Bond ETF is India's most prominent TMF family.7 min read
- Thematic Fund — SEBI Equity Category with ≥80% in Cross-Sector Theme-Based StocksA SEBI equity fund category requiring at least 80% in stocks linked to a defined investment theme (e.g., ESG, infrastructure, manufacturing) that may span multiple sectors.8 min read
- Time-Weighted Return (TWR)The compound growth rate of a portfolio that eliminates the effect of external cash flows, isolating manager skill from investor timing — the CFA Institute GIPS standard for performance reporting.7 min read
- Total Return (TR vs PR)Total Return (TR) includes price appreciation plus dividends reinvested. SEBI mandates Total Return Index (TRI) benchmarks for all MF schemes since Feb 2018. Growth-option NAV equals total return; IDCW NAV does not.3 min read
- Treynor RatioTreynor Ratio measures excess return per unit of systematic risk (beta), unlike Sharpe which uses total standard deviation. Best suited for well-diversified equity funds where only market risk remains.3 min read
- Trustee (Mutual Fund)A mutual fund Trustee is a SEBI-registered entity that holds scheme assets in trust for unitholders and supervises the AMC. SEBI MF Regulations require at least two-thirds of the board to be independent directors.5 min read
- Portfolio Turnover RatioPortfolio Turnover Ratio measures how frequently a mutual fund replaces its holdings in a year. AMFI-mandated disclosure in factsheets. High turnover increases transaction costs and reduces net returns.3 min read
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- ULIP — Unit Linked Insurance PlanUnit-Linked Insurance Plan (ULIP) is a hybrid product sold by life insurers that bundles a market-linked investment with a life-cover. A portion of each premium funds the sum-assured (mortality charge), the rest is allocated to investor-chosen sub-fu1 min read
- ULIP vs Mutual Fund — Comparison FrameworkA structured factual comparison of ULIP (IRDAI-regulated) and mutual funds (SEBI-regulated) across charges, lock-in periods, tax treatment, and transparency — helping investors understand the structural differences between these two investment-cum-insurance or pure-investment products.7 min read
- Ultra-Short Duration FundA SEBI-categorised debt fund that maintains a Macaulay duration of 3 to 6 months in its portfolio, bridging the gap between liquid funds and short-duration funds.7 min read
- UPI — Unified Payments Interface (NPCI 2016, Global Volume Leader)UPI is NPCI's instant inter-bank payment protocol (2016), enabling P2P and P2M transfers via VPA across 500+ member banks, processing over 17 billion transactions/month as of 2024 — the world's largest real-time payment network by volume.6 min read
- US Stocks for Indian InvestorsHow Indian residents and NRIs can invest in US equities via the LRS route, custodial accounts, and internationally-listed ETFs.6 min read
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- Value Fund — SEBI Equity Mutual Fund Category with Value-Investment StyleA Value Fund is a SEBI-defined equity mutual fund that follows a value-investing strategy — building a portfolio with stocks trading below P/E or P/B medians relative to the broader market — with a minimum 65% equity allocation.8 min read
- Virtual Digital Asset (VDA)VDA is the legal term for cryptocurrencies and NFTs under India's Income Tax Act §2(47A), inserted by Finance Act 2022. Gains are taxed at 30% flat under §115BBH.4 min read
- VolatilityVolatility measures the degree of price or return variation over time — daily, weekly, or monthly. Annualised using √252 (daily) or √12 (monthly). Higher volatility = wider potential return range in both directions.3 min read
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- Yield CurveThe term structure of interest rates — a graph plotting G-Sec (or swap) yields against maturity from overnight to 40 years. Its shape (normal, inverted, flat, humped) signals the market's collective view on growth, inflation, and RBI policy.6 min read
- Yield to Maturity (YTM)The internal rate of return on all bond cash flows — coupons plus face-value redemption — assuming the bond is held to maturity and every coupon is reinvested at the same rate.5 min read
Definitions reviewed every six months and on each material SEBI/AMFI/RBI rule change. MintByte is an AMFI-registered mutual fund distributor (ARN-314872); SEBI Registered Investment Adviser and Research Analyst registrations are in process. Not investment advice.