glossary
All editorial pieces filed under glossary. 0 quick takes · 34 notes · 73 deep dives.
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
Spin-off
A corporate restructuring where a parent company creates a separate, independently listed public entity by distributing shares of a subsidiary to existing share
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 Regul
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 fi
Rights Issue
An 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 no
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.
MFD vs RIA — Mutual Fund Distributor vs SEBI Registered Investment Adviser
An MFD (Mutual Fund Distributor) is an AMFI ARN-registered intermediary who distributes mutual fund products and earns commissions from AMCs. A SEBI Registered
Target Maturity Fund — Defined-Maturity Debt Fund with Held-to-Maturity Yield Lock
A 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 d
Smart Beta Fund — Factor-Tilted Index Funds
Smart Beta Funds are passively managed index funds that track factor-based indices (momentum, quality, low volatility, value, alpha-50) instead of market-cap-we
Solution-Oriented Fund — SEBI Umbrella Category with Mandatory Lock-In
Solution-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
Children's Fund — SEBI Solution-Oriented Category for Child Education Goals
A 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
Retirement Fund — SEBI Solution-Oriented Category with 5-Year Lock-In
A 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). Availab
Multi-Asset Fund — Mandatory Allocation Across 4+ Asset Classes
A 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
Balanced Fund — Pre-2018 Category & Post-SEBI Reclassification
Balanced Fund was a legacy SEBI mutual fund category combining equity and debt. Post the October 2017 SEBI Categorisation Circular (effective April 2018), all b
NFO — New Fund Offer
A 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 bu
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 e
Premium Mode — Annual vs Monthly vs Quarterly Insurance Premium Payment
Premium mode is the frequency of insurance premium payment — annual, semi-annual, quarterly, or monthly. Non-annual modes carry modal loadings (insurers charge
No-Claim Bonus (NCB) — Health Insurance Reward for Claim-Free Years
No-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 dis
IRDAI — Insurance Regulatory and Development Authority of India
IRDAI (Insurance Regulatory and Development Authority of India) is the statutory regulator for the Indian insurance sector, established under the IRDAI Act 1999
Insurance Riders — Add-On Benefits on Base Policies
Insurance riders are optional add-on benefits attached to a base life or health insurance policy for additional premium. Common riders include accidental death
Critical Illness Cover — Lump-Sum Diagnosis Benefit
Critical illness insurance pays a predefined lump sum on diagnosis of a listed condition (cancer, heart attack, stroke, etc.) — not a reimbursement of actual ex
Health Insurance — Hospitalisation Cover in India
Health insurance (mediclaim) reimburses hospitalisation and medical expenses. Governed by IRDAI Health Insurance Regulations 2016. Available as individual, fami
ULIP vs Mutual Fund — Comparison Framework
A structured factual comparison of ULIP (IRDAI-regulated) and mutual funds (SEBI-regulated) across charges, lock-in periods, tax treatment, and transparency — h
Market Timing
The 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 re
Dollar Cost Averaging (DCA) / SIP
Investing 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 i
Rebalancing
The periodic or threshold-triggered process of restoring a portfolio to its target asset allocation, mechanically selling outperformers and buying underperforme
Narrative Fallacy
The human tendency to construct coherent causal stories from random or complex events, causing investors to mistake compelling narratives for data-backed invest
Regret Aversion
The tendency to avoid making decisions that could lead to regret, causing investors to defer action, hold crowded positions, and systematically under-rebalance
Sectoral Index
A 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
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 mark
Sensex
The 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-estab
Nifty 50
The Nifty 50 is the flagship benchmark index of the National Stock Exchange (NSE), tracking the free-float market-capitalisation-weighted performance of the 50
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
Treasury Bill (T-Bill) — India
Treasury Bills are short-term, zero-coupon, sovereign-backed government securities issued by the Government of India via RBI auctions. They are the risk-free be
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
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
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 b
Gross Domestic Product (GDP) — India
GDP is the broadest measure of India's economic output, released quarterly by the National Statistical Office. Real GDP growth drives corporate earnings cycles,
Wholesale Price Index (WPI) — India
WPI measures input-cost inflation at the producer level, acting as a leading indicator for CPI and corporate margin pressure. Released weekly by the Office of E
Consumer Price Index (CPI) — India
CPI is India's primary retail inflation gauge and the anchor for RBI's monetary policy framework. Understanding CPI helps investors anticipate repo rate changes
Bank IFSC Code — RBI 11-Character Branch Identifier for NEFT/RTGS/IMPS
The IFSC (Indian Financial System Code) is an RBI-assigned 11-character alphanumeric code uniquely identifying a bank branch for electronic fund transfers via N
Demat Account — Dematerialised Securities, SEBI Depositories Act 1996, CDSL & NSDL
A demat account holds securities (equities, bonds, MF units, ETFs, SGBs) in electronic form under the SEBI Depositories Act 1996, custodied by NSDL or CDSL thro
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 — replac
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 transactio
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 i
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 i
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
Recurring Deposit (RD) — Monthly Instalment Savings & Tax Treatment
A recurring deposit (RD) is a regular monthly deposit scheme where equal instalments accumulate with compound interest to a lump-sum maturity value. Interest ta
Fixed Deposit (FD) — Term Deposit, Interest Rates & Premature Withdrawal
A 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
Savings Account — Definition, Interest Calculation & Tax Treatment
A savings account is a basic deposit product offered by scheduled commercial banks under RBI's Master Direction on Interest Rate on Deposits, earning interest c
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 incom
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 impris
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
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 remitt
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 restricti
Non-Repatriable Funds
Funds held in India — primarily NRO balances and NRO-funded investments — that cannot be freely remitted abroad; repatriation is capped at USD 1 million per fin
Repatriable Funds
Funds held in India that can be freely remitted abroad without RBI approval or monetary cap — primarily NRE account balances, FCNR(B) proceeds, and investments
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 he
Intra-Day Trading
Buying 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
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 amplifie
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.
Settlement
The 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 sin
Circuit Limit
A 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
Limit Order
An 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.
Market Order
An instruction to buy or sell a security immediately at the best available price. Guarantees execution but not the price you receive.
Bid-Ask Spread
The 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.
Market Capitalisation: Definition, SEBI Categories, and Use in Equity Analysis
Market capitalisation is total shares outstanding multiplied by current share price. SEBI's October 2017 Categorization Circular formally defined large-cap, mid
EBITDA: Definition, Calculation, and Limitations in Equity Analysis
EBITDA 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 an
Debt-to-Equity Ratio: Definition, Calculation, and Sector Norms
The 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
P/B Ratio (Price-to-Book): Definition, Calculation, and Use in Indian Markets
The 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 unde
P/E Ratio (Price-to-Earnings): Definition, Calculation, and Interpretation
The 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 historic
Dynamic Asset Allocation Fund — SEBI Hybrid Category with Tactically Managed Equity-Debt Mix
Also known as Balanced Advantage Fund, this SEBI hybrid category dynamically shifts equity allocation between 30–80% using quantitative or model-driven framewor
Capital Protection Fund — SEBI Close-Ended Hybrid Category with Indicative Capital Preservation Structure
A SEBI close-ended hybrid category using a debt-plus-equity structure to target capital preservation at maturity. The protection is structural and indicative —
FoF (Overseas) — SEBI Fund of Funds Category Investing in Foreign Equities and ETFs
A SEBI mutual fund category investing in foreign funds or ETFs, providing Indian investors global exposure within a domestic wrapper; taxed at slab rate post Fi
FoF (Domestic) — SEBI Fund of Funds Category Investing in Indian Mutual Fund Schemes
A 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 t
Thematic Fund — SEBI Equity Category with ≥80% in Cross-Sector Theme-Based Stocks
A SEBI equity fund category requiring at least 80% in stocks linked to a defined investment theme (e.g., ESG, infrastructure, manufacturing) that may span multi
Sector Fund — SEBI Equity Category with ≥80% Concentration in a Single Sector
A 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 equit
Dividend Yield Fund — SEBI Equity Category Focused on High-Dividend-Yield Stocks
A SEBI equity fund category requiring ≥65% in stocks with dividend yield higher than the benchmark index yield, targeting income-generating equity with relative
Equity Savings Fund — SEBI Hybrid Category Using Arbitrage to Achieve Equity Tax Treatment
A SEBI hybrid category combining unhedged equity with arbitrage and debt, designed to provide equity tax treatment at near-hybrid risk levels. Capital is not gu
Aggressive Hybrid Fund — SEBI Hybrid Mutual Fund Category with Equity-Dominant Allocation
A SEBI-defined hybrid category investing 65–80% in equity and 20–35% in debt, qualifying for equity tax treatment while retaining a debt buffer.
Conservative Hybrid Fund — SEBI Hybrid Mutual Fund Category with Debt-Dominant Allocation
A SEBI-defined hybrid category investing 75–90% in debt and 10–25% in equity, designed for income generation with limited equity upside.
Shareholding Pattern — SEBI LODR Quarterly Disclosure of Listed Company Ownership
Shareholding pattern is a mandatory quarterly filing by every BSE/NSE-listed company under SEBI LODR Regulations 2015 (Reg-31), disclosing the percentage stake
QIB, NII, and RII — IPO/FPO Investor Category Framework
Indian IPOs and FPOs divide subscriptions into three statutory categories: Qualified Institutional Buyers (QIB), Non-Institutional Investors (NII), and Retail I
Anchor Investor — SEBI ICDR Pre-IPO Allocation to Qualified Institutional Buyers
An 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 t
Nifty Smallcap 250 — NSE Index of Small-Capitalisation Companies
The 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-
Nifty Midcap 100 — NSE Index of Mid-Capitalisation Companies
The 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
Growth Fund — SEBI Equity Mutual Fund Category with Growth-Investment Style
A Growth Fund is a SEBI-defined equity mutual fund that pursues a growth-investment strategy — targeting companies with above-average earnings or revenue growth
Value Fund — SEBI Equity Mutual Fund Category with Value-Investment Style
A 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 re
Contra Fund — SEBI Equity Mutual Fund Category with Contrarian Investment Style
A contra fund is a SEBI-defined equity mutual fund that follows a contrarian investment strategy — buying stocks that are currently out of favour, undervalued,
IDCW — Income Distribution cum Capital Withdrawal in Mutual Funds
IDCW 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 fr
Forex Card
A 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 — subje
INR-USD Exchange Rate
The 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
Country Fund
A 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
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
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 w
Currency Hedging
Currency hedging neutralises foreign-exchange risk in an international portfolio by using derivatives to lock in a known conversion rate — reducing INR-USD vola
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 ha
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 Nasd
S&P 500 Index
The 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 dom
US Stocks for Indian Investors
How Indian residents and NRIs can invest in US equities via the LRS route, custodial accounts, and internationally-listed ETFs.
Reverse Repo Rate — RBI Liquidity Absorption
The reverse repo rate is the rate at which RBI borrows from banks overnight, absorbing surplus liquidity from the banking system. Since 2022, the Standing Depos
Repo Rate — RBI Policy Rate
The 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, le
Herd Behavior
The tendency of investors to mimic crowd actions, producing momentum-driven bubbles and panics that disconnect prices from fundamental value.
Recency Bias
The cognitive tendency to over-weight recent events when forecasting, causing investors to chase last year's winners and flee last year's losers.
Loss Aversion
Kahneman & Tversky's Prospect Theory finding that losses hurt approximately 2–2.5× more than equivalent gains feel good, producing asymmetric and often suboptim
Anchoring Bias
The tendency to fixate on an initial reference price — the "anchor" — and insufficiently adjust when new information arrives, documented by Tversky & Kahneman (
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