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What is Convertible Debentures?

When a company needs money to grow, it usually has two main options, either they take a loan (which is called debt) or sell a small part of its ownership (which is called equity or shares). But what if there was an investment that could be both.

Yes you’ve heard it right Convertible debentures are one such financial tool that creates a mix of both debt and equity. Convertible Debentures first starts as a loan to the company, but it holds a secret power for investors to transform loan into ownership. This unique feature makes Convertible Debentures one of the most interesting financial instruments in the financial market.

What is Convertible Debenture?

Debentures are a formal IOU from a company to the investor. When you invest in debentures, you’re lending the company money. In return, they promise to pay you regular interest and give your original money back after a set time period. But you should know this, debentures are usually unsecured meaning it is based purely on companies reputation and ability to make money, which adds a bit of risk.

Convertible Debentures gives investors the power to switch from being a lender to a part-owner or a shareholder. Investors can choose if they want to convert or just get their initial investment back when the loan period ends. This option is what makes a debenture so much more attractive, balancing risk with the potential for a much bigger reward.

Loan: When you invest you get a fixed interest payment, it acts just like a fixed deposit. If the company’s stock does not perform well, you can just hold the debenture and get your principal investment back at the end, protecting your initial investment.
Ownership: If the company’s stock performs well and its stock price starts to go up, you can convert your debentures into shares and you can earn in the company’s growth which can be much more than just the interest.

Why are convertible debentures offered?

Companies also have multiple reasons to issue convertible debentures.

Lower Interest Payments: As the company offers an attractive option to convert it from debentures to shares, companies can get away with paying a lower interest rate compared to a normal loan hence saving money.
Putting Off Dilution: When a company issues new shares, the ownership of existing shareholders gets smaller, or “diluted.” With convertibles, this dilution is pushed into the future and might not happen at all if investors don’t convert.
Tax Savings: The interest paid by the company falls as debt, accounted as business expense, which reduces their taxable profit. This makes raising money with debentures more tax-efficient than paying dividends to shareholders.

When a company issues convertible debentures, it also sends a strong, positive signal among the investors as it portrays they are confident their stock price will rise, making it a great deal for everyone.

Types of Convertible Debentures

Fully Convertible Debentures (FCDs): With these, investors’ entire loan should be converted into shares but you don’t get any cash back. This is common for new, high-growing companies that want their lenders to become long-term partners.
Partially Convertible Debentures (PCDs): This acts as a mix for the investors where a part of your debenture converts to shares, and the rest remains as loan which gets paid back to you in cash. This is often used by established companies.
Optionally Convertible Debentures (OCDs): Here the power is in the hands of investors, you can choose to convert to shares or just take your initial investment back at the end. This is the most flexible type for investors.
Compulsorily Convertible Debentures (CCDs): It can be understood by its name as in this conversion is mandatory. There is no option, debentures must be turned into shares at the maturity date. This is for investors who are ready to take on the full risk of the stock’s future.

Fully vs. Partially Convertible Debentures

Parameter	Fully Convertible (FCD)	Partially Convertible (PCD)
What Converts?	The entire amount becomes shares.	A part becomes shares, the rest remains a loan.
Who Issues It?	Usually newer companies with high growth potential.	Usually established companies with a track record.
What happens at the end?	You become a full shareholder.	You become a shareholder and get some money back.
Risk Level	Higher risk, higher potential reward.	Balanced risk, as part of your money is safe as a loan.

Key Features of Convertible Debentures

When you invest, there’s always a rulebook. Here are the key terms to look for:

Conversion Price: This is the set price per share for when you convert. If the conversion price is ₹100 but the stock is trading at ₹150, converting is a profitable move.
Conversion Ratio: This tells you how many shares you get for each debenture unit. A 10:1 ratio means you get 10 shares for one debenture unit.
Coupon Rate: This is the annual interest you earn as long as it’s a loan. It’s usually lower than a normal debenture because investors enjoy the right to convert.
Maturity Date: This is the end date of the loan. If you have an OCD and don’t convert, the company must pay you back your principal on this date.

Advantages	Disadvantages
You get regular interest payments, giving you a fixed income.	The interest is less than what a normal bond would pay.
You can profit if the company’s stock price goes up.	The company could fail and not be able to pay you back.
If the stock falls, you can just take your money back (with OCDs).	If you convert and the stock price then drops, you could lose money.
If the company goes bankrupt, you get paid before stockholders.	It’s not a simple product, you need to pay attention to make the right choice.

Conclusion

Convertible debentures are not for everyone in the market. They do not act as FD in terms of safety and not even risky as buying shares from the financial markets. They give investors a middle ground where it gives both safety of debt as well as growth potential of equities owned.

Investors who have a moderate appetite for risk can invest in the convertible debentures. If you believe in a company’s long-term growth story but want some protection in case things don’t go as planned, a convertible debenture could be a very interesting tool to have in your investment portfolio.

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6	Secured and Unsecured Bonds: Understand the Difference
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9	Tax-Free Bonds: Their Features, Benefits, and How to Invest
10	What are Bond Yields?
11	Stocks vs Bonds: Difference Between Bonds and Stocks

Frequently Asked Questions (FAQs)

Are convertible debentures advantageous for new investors?
Yes! Convertible debentures give you the best of both worlds. You get regular, fixed interest payments like a normal bond, which provides steady income. At the same time, you have the option to convert your debentures into company shares, giving you a chance to benefit if the stock price goes up.
What are the main risks attached to convertible debentures?
There are two main risks:Default risk: Most convertible debentures are unsecured, so if the company runs into trouble, it might not be able to return your money.Conversion risk: If you convert your debentures into shares and the stock price drops, you could lose money on your investment.
How can I make money from a convertible debenture?
There are two ways to earn:Interest payments: You get periodic coupon payments as long as you hold the debenture.Conversion into shares: If the company’s stock does well, you can convert your debentures into shares at a fixed price (usually lower than the market price) and sell them for a profit.
What happens if the invested company goes bankrupt?
If the company goes bankrupt, debenture holders are paid before shareholders. This means the company must pay back its debenture holders from any remaining assets before giving anything to shareholders.
Can debentures be converted into shares forcefully by the company?
It depends:Optionally Convertible Debentures (OCDs): The choice is yours—you decide if and when to convert.Compulsorily Convertible Debentures (CCDs): Conversion is mandatory at maturity, so you don’t get to stay a lender.

November 10, 2025

What Is Loan-to-Value (LTV) Ratio in Margin Trading?

Have you ever wondered how much borrowing is safe if you trade by pledging your holdings? This question becomes the most important in margin trading. In this trading, investors borrow money from the broker by pledging their stocks and take bigger positions with the same money. But how much should this borrowing be? This is where the Loan-to-Value (LTV) Ratio comes in which determines how much you can borrow against your pledged assets. In this blog, we will understand in detail what the loan to value ratio is, how it works, and why it is very important for a trader to understand it.

What is the Loan-to-Value (LTV) Ratio

Loan-to-Value Ratio, or LTV for short, is a financial indicator that shows how much of your loan you have taken compared to the total value of a property. This ratio measures how much of your loan amount is the value of your pledged assets (such as a house, stocks or bonds). It is usually expressed as a percentage (%).

LTV is most commonly used in home loans, gold loans, and especially in investment options like margin trading. When you take a loan from a broker by pledging your securities (such as shares), the LTV ratio determines the extent of the loan you will get.

For example, if you pledged shares worth ₹1,00,000 and got a loan of ₹70,000 on it, then your LTV ratio will be 70%. That is, you have borrowed up to 70% of the total value of your property.

What is the formula for LTV?

Loan to Value Ratio Formula:

LTV Ratio = (Amount borrowed ÷ Current value of security pledged) × 100

Example : Suppose you have pledged shares worth ₹1,00,000 and you are given a margin loan of ₹70,000 by the broker Then

LTV = (70,000 ÷ 1,00,000) × 100 = 70%

What is the role of LTV in margin trading?

LTV i.e. Loan-to-Value Ratio plays a very important role in margin trading. When a trader pledges shares or mutual fund units in his demat account with a broker, the broker lends him a certain amount based on the value of these assets; this is called margin loan.

But the question is how much money will be received against the value of that collateral? The answer to this is LTV.

How does the broker decide LTV?

The percentage of LTV depends on which securities you are pledging and how stable and reliable their market value is.

If you have pledged stocks of blue-chip companies (like TCS, Infosys, HDFC Bank), then these companies are considered less volatile. In such a situation, the broker can give you LTV ranging from 70% to 80%.
On the other hand, if you pledge penny stocks, mid-cap or stocks of more volatile companies, then the LTV reduces to 50% to 60%, because the risk of decline is higher in such stocks.

SEBI rules and effect of haircut : According to SEBI, every broker is required to apply a haircut on pledged securities. This haircut is a safety cut in the value of the asset which reduces the risk of the broker in case of a sudden market crash or decline.

For example : If you have pledged shares worth ₹1,00,000 and SEBI has fixed a 20% haircut on it, then the broker will consider the effective value of that collateral as ₹80,000. Now if LTV of 75% is applied on it, then you will get a usable margin of about ₹60,000.

Why is Loan-to-Value Ratio so important in trading?

Loan-to-Value Ratio (LTV) is one of the most important metrics in margin trading, as it directly reflects the safety of your position and your creditworthiness to the broker. A high LTV indicates that you have taken a lot more loan than the value of your assets, which means more risk.

1. Increasing LTV poses a risk of margin call

In margin trading, when the value of your portfolio decreases and it affects the LTV, the broker can trigger a margin call on your account. This means that you will have to immediately deposit additional margin to support your position or reduce the loan by selling parts. If you do not respond in time, the broker can automatically sell your holdings, thereby ensuring a loss.

2. It also affects interest rates

LTV is not only an indicator of risk, but it also affects the interest rate at which you will get a loan from the broker. A lower LTV usually results in a lower interest rate. But as the LTV increases, the broker’s risk also increases and the interest rate can be higher accordingly. This is why trading on a higher LTV can prove to be expensive.

3. Higher LTV means more leverage and more risk

When you pledge your stocks and trade with a loan from the broker, you are using leverage. LTV indicates the level of that leverage. For example, if your LTV is 75%, it means you have traded with only 25% of your capital and the remaining 75% is borrowed. This strategy can certainly increase profits, but the losses can also be huge if there is a slight fall in the market.

4. Understanding LTV is essential for successful trading

Often new investors focus only on how much credit they can get from the broker, and end up using the entire limit. But experienced and professional traders know that it is not only wise to reach the LTV limit, but it is also important to keep that ratio stable and safe. A controlled and prudent LTV is the key to success and longevity in trading.

Factors That Influence LTV in Margin Accounts

There are many important factors behind deciding LTV (Loan-to-Value) in Margin Trading. All these factors together decide how much margin an investor will get on pledged shares.

Volatility of the stock : If a stock is more volatile, that is, its prices fluctuate rapidly, then the LTV available on it may be less. Brokers do not want to take much risk in this situation.
SEBI Classification (Group 1 vs Group 2) : SEBI has divided the shares into Group 1 and Group 2. The shares coming in Group 1 (such as blue-chip stocks) are considered more secure and there is a possibility of getting higher LTV (60–75%) on them. On the other hand, more haircuts are given on the shares included in Group 2.
Liquidity of the stock : Highly liquid stocks, that is, those which can be bought and sold easily, get better LTV. The broker usually gives less LTV on pledging shares with low liquidity.
Market conditions and broker’s risk policy : If there is a sharp decline or uncertainty in the market, the broker may reduce the LTV as per its internal risk norms. Sometimes brokers apply stricter margins as per their risk appetite.
Regulatory Updates and Circuit Breakers : If SEBI implements new rules or circuit breakers are imposed on a stock, then the LTV may also change. The broker can immediately increase the haircut or remove the MTF eligibility.

Read Also: What is Margin Money?

Common Mistakes Investors Make Around LTV

Using excessive leverage : Many investors use all the funds they can get through LTV without thinking that the market may crash. High leverage can turn a small loss into a big one.
Ignoring margin calls : If the value of pledged shares falls, the broker sends a margin call. Ignoring this can lead to your account being frozen or shares being confiscated.
Pledging high-risk stocks : Stocks that have a lot of volatility (such as penny or speculative stocks) have higher haircuts and lower margins. This can lead to frequent margin shortfalls.
Underestimating interest cost : Funds received through LTV attract interest. If this cost is not understood, the profit that is shown may actually turn out to be a loss.
Not having a Risk Management Plan : While doing margin trading, it is important to have a proper stop-loss, diversification and capital allocation strategy. Trades done without planning can be harmful.

How to Manage and Control Your LTV Ratio

Monitor the portfolio regularly : Keep a constant eye on your pledged shares and their market value. If the price of any stock falls, it will directly affect your LTV. Check portfolio health at least once a week.
Diversification is important : Pledging only one type of stock or one sector can increase the risk. Pledging shares of different sectors and fundamentally strong companies reduces the haircut and keeps the LTV stable.
Keep an emergency margin buffer : Never use your entire eligible margin. Keep a buffer of at least 10–15% so that you do not have to face margin shortfall in a sudden market fall.
Use calculators and tools : Nowadays many platforms provide advanced LTV calculators and portfolio analytics tools. These tools can tell you in real-time what your current LTV is and how much margin is left.
Use alerts and automation : Most brokers now offer tools that send you alerts via SMS or app notifications when your LTV is approaching the limit. Also, some platforms have an auto-margin top-up facility so that the system automatically maintains the buffer.

Read Also: What is Pledging of Shares?

Conclusion

If you do margin trading, understanding the Loan-to-Value (LTV) ratio is as important as trading. This ratio determines how much funds you can borrow against your pledged securities and how far your risk is spread. If you trade without understanding it, you may face a margin call or forced sell-off in a sudden market fall. Therefore, a smart trader is one who keeps the LTV in balance, tracks it from time to time and takes action when needed. After all, proper planning and control are the companions of good trading.

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Frequently Asked Questions (FAQs)

What is the full form of LTV in margin trading?
LTV means “Loan-to-Value”, which tells how much loan or margin you can take against the value of pledged shares.
What happens if my LTV ratio increases too much?
If the LTV becomes high, the broker may send a margin call or sell your shares.
Is a lower LTV always better?
Yes, lower LTV is safer as it carries less risk if the market falls.
How can I reduce my LTV ratio?
You can reduce your LTV by adding cash or more shares, or by closing some positions.
Does every broker offer the same LTV limit?
No, different brokers follow different haircuts and LTV limits, depending on the category of stock.

November 10, 2025

List of Best Commodity ETFs in India

In case you have ever questioned yourself about how to hedge your investments against inflation or market fluctuations, one of the alternatives that you can consider is commodity ETFs. They have become a popular investment choice among Indian investors who want to invest in gold, silver and other commodities in a convenient manner without holding them. We will discuss what is meant by commodity ETFs, why they are important and which ETFs are the best in India.

Commodity ETFs – An Overview

A Commodity ETF (Exchange-Traded Fund) lets you invest in a commodity, like gold or silver, in the stock market. Instead of buying physical gold bars or silver coins, you can buy units of an ETF that mirrors the price of that commodity. Some ETFs hold actual physical commodities in vaults, while others track prices through futures contracts. Either way, you get exposure to the commodity’s performance without worrying about storage, purity checks, or insurance. In India, most commodity ETFs focus on gold and silver.

Types of Commodity ETFs

1. Gold ETFs

Gold ETFs are the most popular commodity ETFs in India. They invest in physical gold of 99.5% purity and replicate the price of domestic gold. Each unit usually represents 1 gram of gold, so you can buy or sell them on the stock exchange, similar to shares, without worrying about purity, storage, or making charges.

2. Silver ETFs

If gold feels a little too traditional, Silver ETFs can be a good option. They work just like gold ETFs but track the price of physical silver (usually 99.9% purity). Silver has both investment and industrial demand, which means it can be a bit more volatile, but also offers great growth possibilities when global demand spikes.

3. Futures-Based Commodity ETFs

Some ETFs do not hold physical gold or silver; instead, they invest in commodity futures contracts. This means their returns depend on how those futures perform, which can make them a little more complex to understand. They are influenced by factors like contango and backwardation (basically, how future prices compare to current prices). These are common abroad (for crude oil or agriculture), but still new in India.

4. Multi-Commodity or Basket ETFs

Multi-Commodity ETFs (also called basket ETFs) invest in a mix of commodities like metals, energy, or even agriculture. They do not depend on the performance of a single metal like gold or silver. Instead, they track an index made up of multiple commodities, offering more balanced exposure.

Read Also: List of Best Gold ETFs in India

Best Commodity ETFs in India

Company	Market Cap. (Crores)	Expense Ratio %	52 Week High	52 Week Low
Nippon India ETF Gold BeES	₹29,323	0.80	₹108.69	₹61.67
SBI Gold ETF	₹12,134	0.70	₹112.23	₹62.85
HDFC Gold ETF	₹14,053	0.59	₹112.80	₹63.60
ICICI Prudential Silver ETF	₹9,481	0.40	₹190	₹86
Kotak Silver ETF	₹2,018	0.45	₹178.98	₹81.80

1. Nippon India ETF Gold BeES

One of the oldest and most trusted gold ETFs in the Indian market, Nippon India ETF Gold BeES directly tracks the price of gold in the domestic market. It’s highly liquid and backed by physical gold stored in vaults with an expense ratio of around 0.80%
It is reliable, easy to trade, and a great way to get exposure to gold without worrying about storage or purity.

2. SBI Gold ETF

Managed by one of the largest and most respected AMCs in India, the SBI Gold ETF is another solid option for gold investors. It mirrors domestic gold prices and ensures full backing by physical gold with an expense ratio of around 0.70%. It is considered ideal for conservative investors looking for safety and steady performance linked to gold prices.

3. HDFC Gold ETF

The HDFC Gold ETF combines brand trust with solid tracking performance. It’s known for tight tracking errors and ease of liquidity on the exchange, with an expense ratio of 0.59%. It is low-cost, and strong liquidity makes it a go-to for many investors.

4. ICICI Prudential Silver ETF

If you are looking to diversify beyond gold, silver ETFs are worth exploring. ICICI Prudential Silver ETF gives direct exposure to silver prices and is ideal for investors who believe silver has long-term potential in both industry and investment. The underlying Asset is physical silver, and the expense ratio is 0.40%. It is great for diversification and tapping into the growing industrial demand for silver.

5. Kotak Silver ETF

Another good choice for silver exposure, Kotak Silver ETF provides returns closely in line with domestic silver prices. The expense ratio is around 0.45% and is backed by physical silver and is easy to trade, making it a convenient way to participate in silver’s price movements.

How to Choose the Right Commodity ETF

Choosing the best ETF for you depends on your goals. Below are a few points to keep in mind while choosing an ETF;

Check the expense ratio – Lower fees mean you will get more returns
Look at tracking error – A good ETF should closely mirror the actual price of the commodity.
Pay attention to liquidity – Higher trading volume ensures you can buy and sell easily without big price gaps.
Review AUM (Assets Under Management) – Larger funds tend to be more stable and better managed.
Know what you are investing in – Physical ETFs are simpler, while futures-based ones can be affected by price rollovers.

Read Also: Best ETFs in India to Invest

Taxation of Commodity ETF

Before you invest, you should know how your returns will be taxed because taxes can quietly eat away your profits.

Commodity ETFs, whether they track gold, silver, or a mix of other commodities, are not considered like equity investments. They follow a different set of tax rules.

1. Short-Term Capital Gains (STCG)

If you sell your ETF within 12 months of buying it, your gains are taxed as a short-term capital gain, which means they get added to your total income and are taxed according to your income tax slab.

Example – Suppose you buy a Gold ETF for ₹1,00,000 and sell it after 8 months for ₹1,15,000.
That ₹15,000 profit will be taxed as per your slab, which can be 10%, 20%, or 30%, depending on which income tax bracket you fall in.

2. Long-Term Capital Gains (LTCG)

If you hold your Commodity ETF for more than 12 months, your profit becomes a long-term capital gain, and you pay a flat 12.5% tax on it. Remember, there is no indexation benefit anymore. Earlier, investors could adjust their purchase price for inflation, which helped reduce taxable gains. But under the latest tax rules, that benefit is gone.

Example – Let us say you buy ₹1,00,000 worth of Gold ETF in January 2024. After holding them for about 15 months, you sell them in April 2025 for ₹1,30,000, and you have a profit of ₹30,000.

Since you held it for more than 12 months, it qualifies as a long-term capital gain. So, your tax will be 12.5% of ₹30,000, which equals ₹3,750

3. Securities Transaction Tax (STT)

STT is not levied on Gold, Liquid, GILT ETFs, and some international ETFs. Although STT is levied on other ETFs.

Read Also: Small-Cap ETFs to Invest in India

Conclusion

Commodity ETFs transfer the ancient charm of gold and silver to a new, digital era. They are liquid and can be traded easily, hence being an ideal choice for investors who wish to diversify other than stocks and bonds. However, it is suggested to only invest in known, liquid ETFs of reputable fund houses. And do not forget: while gold and silver glitter, discipline and patience shine even brighter in the long run.

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Frequently Asked Questions (FAQs)

Are commodity ETFs safe to invest in?
Yes, they are SEBI-regulated and are backed by physical assets, which makes them a safe option to invest in.
Do commodity ETFs pay dividends?
No, they only reflect price changes of the underlying commodity.
When is the best time to invest in commodity ETFs?
They work best when invested for the long term and not short-term trades.
How can I track performance?
You can check live prices either on NSE/BSE or your broker’s app anytime.
What is the minimum amount to invest in a commodity ETF?
Usually, the cost is very less, often a few hundred rupees.

November 9, 2025

Top 20 Basic Stock Market Terminology for Beginners

Whenever your friends were discussing the stock market using various jargon such as IPO, Bid Price, etc., now you don’t need to feel left out.

In today’s blog post, we will explain to you the top 20 basic stock market terminologies which can help you get started on your investment journey with confidence.,

Basic Stock Market Terminology

The following are 20 fundamental stock market terms every beginner should know before starting to trade.

A stock or share represents ownership in a company’s equity. The value of shares purchased by you became the part-owner of that company. Companies issue shares to raise capital and grow their business, and by owning them, you become a part of their future growth.

2. Bid and Ask Price

Bid and ask are the two most important prices that an investor must know. The bid price refers to the highest price which an investor is willing to pay to purchase a stock. Whereas the ask price which a seller is willing to sell the stock. And the difference between bid-ask prices is known as the spread.

3. Broker

The broker is an entity which acts as a middleman between you and the exchange and provides you with a platform to execute trades on the stock exchange. For their services, they charge a brokerage fee from you.Whenever your friends were discussing the stock market using various jargon such as IPO, Bid Price, etc., now you don’t need to feel left out.

In today’s blog post, we will explain to you the top 20 basic stock market terminologies which can help you get started on your investment journey with confidence.

4. Trading Volume

The trading volume refers to the total number of shares traded or bought, or sold during a particular time period. It acts as a key indicator for traders in identifying the trend of a stock. An increasing stock price, along with the higher trading volume, indicates a bullish momentum, and vice versa.

5. Liquidity

It refers to the availability of buyers and sellers at the time of executing traders. Higher liquidity in any stock allows you to easily buy or sell it. Stocks with higher liquidity allow you to execute the shares at a fair price.

6. Volatility

Volatility in the stock market refers to how quickly the price of a stock or market index is moving up and down. Prices of stocks with higher liquidity fluctuate very rapidly compared to illiquid stocks. Higher volatility also comes with an opportunity to earn profit from quick movement in prices.

7. Market Capitalisation

Companies listed in India are categorised based on their valuation, and the method used to calculate this valuation is market capitalisation. It is calculated by multiplying the total number of outstanding shares by the current market price of a share. Based on the market capitalisation, companies are categorised into large-cap,

8. Initial Public Offering (IPO)

When a company seeks to raise capital from the public, it can do so by launching an IPO. It is the first step taken by a company to get itself listed on the stock market. This process is known as an Initial Public Offering. Once the shares are listed on a stock exchange, they can be traded freely in the market.

9. Stock Split

This is a corporate action in which a company divides its existing shares by reducing the price per share and increasing the outstanding shares. Shares were split by the company to make it more affordable and accessible to a wide range of investors. However, the share split only increases the number of outstanding shares but does not increase the company’s overall market value.

10. Blue-chip Stock

Blue-chip stock is shares of large-cap companies. They are generally shares of large, established, and financially strong companies. Investment in blue-chip stocks carries relatively lower risk, but they have the potential of providing stable and consistent returns.

11. Market and Limit Orders

These are types of orders which one can place while executing their trades. In a Market order, the shares are executed at the best available market price. Whereas, in a limit order, the shares are executed at the price defined by the trader or at a specific price. Limit orders are not executed immediately.

12. Bull and Bear Market

These are the two common phases of the market. A bull market is a phase when the stock prices are rising or investors have an optimistic view of the market. However, in the bear phase of the market when the stock price generally falls more than 20%.

13. Dividend

When a company earns profit, it distributes a certain portion of its profit to its existing shareholders in the form of a dividend. Investment in dividend yield companies is suitable for conservative investors or for investors seeking regular income. However, not every company pays dividends; some use their profit for expansion.

14. Index

An index represents a group of stocks which reflects the performance of a particular sector. The performance of the index can be used to measure the performance of the portfolio. Examples of popular indices are Nifty 50, Nifty Mid Cap, Bank Nifty, Nifty IT, etc.

15. Stoploss

A stoploss is a tool used by traders as a risk management strategy to limit their potential loss. It is an automated order placed by the trader to buy or sell a security when the share price reaches a certain level. The primary objective of this order is to protect investors from loss without consistently monitoring the market.

16. ETF

ETF or Exchange Traded Fund is a type of investment tool offered by asset management companies. This is traded on the stock exchange like any other stock. An investor is required to have a demat and trading account if they wish to invest in it. It invests the money pooled from investors in a basket of assets such as bonds, indices, etc.

17. Demat and Trading Account

To invest in the stock market, it is essential to have a trading and demat account. A trading account allows you to execute your trades in the securities market. Whereas, in your demat account, you can hold securities or shares. Both accounts are interconnected and need to be opened with a broker.

18. Market Capitalisation

Market capitalisation is often used to calculate the market value of a company. It is calculated by multiplying the total number of outstanding shares by the current market price of the share. Based on the value calculated, the companies are divided into three different categories such as large-cap, mid-cap, and small-cap.

19. Portfolio

A portfolio is a combination of different asset classes or investments held by an individual or an institution. The wide range of financial instruments held by an investor may include equity, debt, commodities, etc.

20. Capital Gain

Whenever you earn profit from investment in the equity market, you will have to pay Capital Gain Tax on it. The applicable capital gain tax depends on the duration of investment, such as investments sold before one year are subject to tax as per the applicable tax rate of short-term capital gain, which is 20%. However, if the investment is sold after one year of investment, it will be taxed at a rate of 12.5%, after including the exemption of 125000.

Conclusion

On a concluding note, having an understanding of the stock market’s basic terminology is essential for a beginner to start investing in stocks. Initially, various terms might confuse you, but over time, you will get to understand them, and it can help you navigate the market easily. To get more clarity about any terms related to the stock market, you can read blogs, articles, and consult your investment advisor.

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5	20 Things to Know Before the Stock Market Opens
6	Best Share Market Learning Apps in India

Frequently Asked Questions (FAQs)

What is the difference between a demat and a trading account?
A trading account is used by a trader to execute trades on the exchange. Whereas,a demat account is required to hold the securities purchased in electronic form.
Do I need to pay taxes on the profit earned from the stock market?
Yes, the profits earned from the stock market are subject to tax as per the applicable capital gain tax. If the shares are sold within the period of one year, short-term tax liability will be generated, and if the holdings are sold after one year, long-term capital gain tax is payable.
What is the formula to calculate market capitalisation?
The formula to calculate market capitalisation is as follows:Market Capitalisation = Total Number of Outstanding Shares * Current Market Price.
When does the bear market phase start?
A bear market is a phase when the stock or the index value falls by 20% or more.
What is the meaning of IPO?
An IPO is also known as an Initial Public Offering. When a company wishes to raise capital from the public, it can do so by launching its IPO.

November 9, 2025

Surat Prop Trading Scam ₹150 Cr Fraud Unfolds

The “Prop Trading Scam” that originated in Surat has now become a nationwide topic of discussion. Traders have lost over ₹150 crore by being lured with promises of funded accounts and high leverage. This scam highlights the dangers of unregulated platforms and agents. Police and the Economic Offences Wing (EOW) are investigating, while investors are struggling to recover their money. This blog will explain how the scam unfolded, who was affected, and what lessons traders should learn from it.

Background: How the Surat Prop Trading Scam Started

A “prop trading scam” is a scheme where you’re told you can invest a small amount of capital to gain a large trading limit, make profits, and share in a funded account. However, in reality, this model often operates through unregulated agents and unregistered platforms, where there are no rules or oversight. For example, some “prop firms” claim that the investment will be made with their capital, not yours but investigations reveal that the entire system is based on simulated trading, exorbitant fees, or inconsistent leverage models.

How the Scam Operated: Inside the Prop Funding Trap

Initially, Green Wall Enterprises (also known as Greenvol Enterprises) introduced this model in Surat, Gujarat, presenting themselves as agents of a reputable broking house. However, this agency arrangement was found to be invalid.
Money from investors was typically collected not directly through the exchange, but via UPI, digital transfers, and personal accounts.
Initial complaints registered fraud amounting to approximately ₹4.84 crore, with over 50 brokers and traders filing complaints.
However, as this network was uncovered, the case was not limited to Surat—it spread to other parts of the country (NCR, Jaipur, Ranchi, Kolhapur), and the estimated total loss could exceed ₹150 crore.
As complaints increased, it emerged that the firm had presented itself as an agent of a registered broking house, a claim that the broking house itself denied.
The model was risky because the control of the investment was not entirely in the hands of the trader; the profit withdrawal process was unclear, and when it came time to withdraw money, many traders did not receive their payments.
According to experts, such structures are particularly risky because they lack regulatory oversight and the safeguards understood by the investor are absent.

The Timeline : Surat Prop Trading Scam

Year/Date	Title of the event	Description
August 2025	Initiation of complaints	Traders working within the legal system have filed a complaint against Green Wall Enterprises in Gujarat, alleging that their accounts have been blocked and that funded-trading promises have not been fulfilled.
August 2025 (August 14)	Disappearance of the main accused	Nimit Shah and Hiren Jadav, the alleged heads of Green Wall Enterprises, suddenly disappeared, causing fear and confusion among traders.
September 2025	The brokerage firm denied it.	Jainam Broking Ltd clarified that Green Wall Enterprises is not their agent and there was no transactional relationship between them.
2025-November	Loss estimates exceed ₹150 crore	Based on claims from affected traders in various states across the country, the total estimated loss is now reported to be over ₹150 crore.
2025-November	Police investigation and enforcement action	The Gujarat Police and Economic Offences Wing (EOW) are actively investigating this case. The review of irregular agent-model, client-payment channels, and promised funded-trading schemes is ongoing.

The role of the main accused and the companies

Main Firm: Green Wall Enterprise (also known as “Greenvol Enterprises”) :

This firm operated from Surat, Gujarat, and allegedly promised traders “funded accounts” and high-leverage facilities. The defendants include two key individuals from this firm: Hiren Jadav (previously arrested) and Nimit Shah (still absconding in the case).

Broking Firm Name: Jainam Broking Ltd :

The Green Wall firm claimed to be operating on behalf of Jainam Broking Ltd. However, Jainam Broking has denied this claim. The extent of the legitimacy of this link-up is still under investigation.

Agent/Sub-broker Network and Investors :

The firm recruited investors through a network of agents: for example, one agent collected approximately ₹2.53 crore from 25 clients, while another 29 investors deposited approximately ₹2.11 crore.

Investigation and Regulatory Action

FIR and Initial Action : The Economic Offences Wing (EOW) of Surat Police has registered a case against Green Wall Enterprises under sections of fraud, criminal breach of trust, and conspiracy. The main accused, Hiren Jadav, has been arrested, while Nimit Shah is currently absconding.
Regulatory Bodies : Jainam Broking Ltd. has clarified that it had no agency or transactional relationship with Green Wall. This is significant because regulators such as the Securities and Exchange Board of India (SEBI) and exchange-related entities are monitoring the agent/AP model, where unregistered intermediaries pose a problem.
Direction of Ongoing Investigation : Major proceedings involve scrutinizing bank accounts, digital transfer chains, and off-book transactions. The agent network and the movement of deposits (cash/UPI) are also being tracked. This investigation aims to determine where the funds went, who all were involved, and how to prevent such incidents in the future.
What to Expect Next : A series of arrests may follow, and charge sheets will be filed. Stricter guidelines on unauthorized agent networks may be issued by SEBI/broker-member entities. Recovery for affected investors is an uphill battle; the legal and civil recovery process can be lengthy.

Impacted Traders and Industry Reactions

Traders’ Situation : Following the Surat Prop Trading Scam, several investors claimed that their trading accounts were closed without prior notice. In many cases, traders neither received their profits nor their initial investment back. The Economic Offences Wing (EOW) has received hundreds of complaints from investors alleging that they were misled and given false promises by agents.
Industry Reaction : The broking industry has called this incident a “wake-up call” for investor awareness. Leading brokerage houses have clarified that their authorized agents are only SEBI-registered and are not part of any “funded account” schemes. According to experts, this case demonstrates that unregulated prop trading models can pose a serious threat to investors.
Key Takeaways : This incident serves as a lesson for the entire trading community that it is essential to verify the legal status, registration, and funding process of any platform before investing in it. Financial experts believe that this case could be a significant step towards strengthening investor protection and transparency regulations in India.

Why Such Scams Keep Happening in India

Rapid Growth in Retail Trading : The number of retail traders in India has increased rapidly in recent years. New investors often fall for offers like “funded accounts” and “high returns” without sufficient information. This haste paves the way for such scams.
Social Media Promotion and Influencer Influence : Many fraudulent platforms gain trust through social media and YouTube. Influencer marketing and false promises are used to attract investors, leading to the rapid expansion of cases like the “Surat Prop Trading Scam.”
Regulatory Loopholes and Lack of Awareness : Proprietary trading models are not yet directly under SEBI regulation, which allows fraudsters to exploit this loophole. Additionally, a lack of financial awareness among investors and a failure to rely on proper documentation makes these scams even easier to perpetrate.

Conclusion

The Surat Prop Trading Scam has once again proven that unregulated trading platforms can pose significant risks to investors. Losses exceeding ₹150 crore in just a few months have raised serious questions about market transparency. This incident serves as a warning to investors to thoroughly verify the legitimacy and SEBI registration of any “funded account” or “prop trading” offer before investing. Awareness is the strongest defense against such financial fraud.

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6	What Happens If a Stockbroker Shuts Down?
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Frequently Answered Questions (FAQs)

What is the Surat Prop Trading Scam?
This is a trading fraud in which investors were defrauded of crores of rupees under the guise of funded accounts.
Which company is involved in this scam?
Surat-based Green Wall Enterprises is primarily accused in this scam.
How much loss has been reported?
A loss of approximately ₹150 crore has been reported so far.
What action is taken by the police?
The EOW has registered a case, arrested one accused, and the investigation is ongoing.
How can traders stay safe?
Always check the platform’s SEBI registration and payment channels before investing.
Is prop trading regulated in India?
No, prop trading is not currently directly regulated by SEBI.

November 8, 2025

Groww (Billionbrains Garage Ventures Ltd.)IPO Allotment Status, GMP, Subscription & Listing Date

Groww (Billionbrains Garage Ventures Ltd.), one of India’s fastest-growing investment and wealth management platforms, is launching an initial public offering (IPO) to raise up to ₹6,632 crore. The issue opens for subscription on November 4, 2025, and will close on November 7, 2025, with a price band fixed at ₹95 to ₹100 per share. The IPO comprises a fresh share issuance of approximately ₹1,200 crore and an offer-for-sale (OFS) of about ₹5,432 crore by existing shareholders. The shares are proposed to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on November 12, 2025, subject to allotment and necessary regulatory approvals.

Groww (Billionbrains Garage Ventures Ltd.) IPO Day 3 Subscription Status

On Day 3, Groww (Billionbrains Garage Ventures Ltd.). IPO witnessed a strong investor turnout, closing with an overall subscription of 17.60 times. The Qualified Institutional Buyers (QIB) category led the demand with a robust 22.02 times subscription, indicating solid institutional participation. Among Non-Institutional Investors (NII), the bNII (above ₹10 lakh) portion was subscribed 16.28 times, while the sNII (less than ₹10 lakh) segment saw 10.04 times subscription, resulting in an overall NII subscription of 14.20 times. The Retail Individual Investors (RII) category was subscribed 9.43 times, reflecting healthy retail interest. Overall, the issue garnered 31,40,951 applications, with total bids amounting to approximately ₹64,186.764 crore, showcasing strong confidence across investor categories in the company’s growth potential.

Investor Category	Subscription (x)
Qualified Institutional Buyers (QIB)	22.02
Non-Institutional Investors (NII)	14.20
bNII (above ₹10 lakh)	16.28
sNII (less than ₹10 lakh)	10.04
Retail Individual Investors (RII)	9.43
Total Subscriptions	17.60

Total Applications: 31,40,951

Total Bid Amount (₹ Crores): 64,186.76

How to Check Groww (Billionbrains Garage Ventures Ltd.) IPO Allotment Status?

Groww IPO allotment can be easily checked online in two ways: from the Registrar’s website and from the BSE or NSE website. This IPO will be listed on both the exchanges – BSE and NSE, so the allotment status will be available to all investors on both platforms.

Method 1: Registrar’s website (MUFG Intime India Pvt. Ltd.)

The most reliable way is to check allotment from MUFG Intime India Private Limited’s website.

How to do:

Visit MUFG Intime India Pvt. Ltd.’s official website
Select “Groww IPO” from the IPO list
Enter your details PAN number, Application number, or DP/Client ID
Click on Submit
You will see the allotment status on the screen.

Method 2: Check from BSE or NSE’s website

If there is more traffic on the registrar’s website, allotment status can also be checked from BSE or NSE.

How to do:

Visit BSE or NSE’s official website
Select ‘Equity’ segment
Select “Groww IPO” from the IPO list
Enter PAN number and Application number
Click on Search

Objective of the Groww (Billionbrains Garage Ventures Ltd.) IPO

Groww plans to utilize the net proceeds from the fresh issue for the following purposes. The proceeds from the Offer for Sale (OFS) will be received by the selling shareholders and not by the company :

Use of IPO Proceeds	Amount (₹ Cr)
Investment in technology infrastructure, AI, and data security enhancement	420.75
Expansion of product offerings and development of new financial services	285.60
Marketing, brand promotion, and customer acquisition initiatives	210.40
Strengthening subsidiaries and investing in overseas expansion	163.25
General corporate purposes and working capital requirements	120.00

Groww (Billionbrains Garage Ventures Ltd.) IPO GMP – Day 3 Update

The grey market premium (GMP) of the Groww IPO stands at ₹5 as of November 07, 2025 (Day 3). Considering the upper end of the price band at ₹100 per share, the estimated listing price is around ₹105, reflecting a potential gain of approximately 05.00% per share in the grey market.

Date	GMP	Est. Listing Price	Gain
07-11-2025 (Day 3)	₹5	₹105	05.00%

Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.

Groww (Billionbrains Garage Ventures Ltd.) IPO – Key Details

Particulars	Details
IPO Opening Date	November 04, 2025
IPO Closing Date	November 07, 2025
Issue Price Band	₹95 to ₹100 per share
Total Issue Size	66,32,30,051 shares(aggregating up to ₹6,632 Cr)
Listing Platform	BSE, NSE
Registrar	MUFG Intime India Pvt. Ltd.
Groww (Billionbrains Garage Ventures Ltd.) IPO RHP	Groww

Important Dates for Groww (Billionbrains Garage Ventures Ltd.) IPO Allotment

Event	Date
Tentative Allotment	November 10, 2025
Refunds Initiation	November 11, 2025
Credit of Shares to Demat	November 11, 2025
Listing Date	November 12, 2025

Overview Of Groww (Billionbrains Garage Ventures Ltd.)

Groww (Billionbrains Garage Ventures Ltd.) is a technology-driven, digital investment and wealth management platform that enables users to invest in stocks, mutual funds, ETFs, IPOs, and other financial products seamlessly. With a mission to provide “Investing Made Simple” for everyone, Groww integrates advanced technology, AI-driven analytics, and a robust cloud infrastructure to offer an intuitive, secure, and scalable investment experience. India is its largest market, where it serves millions of retail investors through its mobile app and web platform, while also exploring international expansion opportunities. The company leverages data analytics, automation, and personalized insights to provide investors with accessible financial tools and investment guidance. According to industry reports, Groww is one of India’s fastest-growing retail investment platforms by active users and transaction volume in FY2025, making it a key player in the country’s digital wealth management ecosystem.

Frequently Answered Questions (FAQs)

What is the opening and closing date of Groww (Billionbrains Garage Ventures Ltd.)?
Groww IPO is open on 04 November 2025 and will close on 07 November 2025.
What is the price band of the Groww (Billionbrains Garage Ventures Ltd.) IPO?
Its price band is fixed from ₹95 to ₹100 per share.
What is the GMP (Grey Market Premium) of Groww (Billionbrains Garage Ventures Ltd.) IPO today?
The GMP on 07 November 2025 is ₹5, which leads to a possible listing price of ₹105.
What is the total issue size of Groww (Billionbrains Garage Ventures Ltd.) IPO?
The total issue size of the Groww (Billionbrains Garage Ventures Ltd.) IPO is ₹6,632 crore, structured as a combination of fresh issue and Offer for Sale (OFS) by existing shareholders.
What is the expected listing date of Groww (Billionbrains Garage Ventures Ltd.)?
This IPO is expected to be listed on BSE and NSE on 12 November 2025.

November 8, 2025

Bullish Options Trading Strategies Explained for Beginners

Imagine you’re a fruit seller and you have a strong feeling that during the summer season mango prices will shoot up, this means you are “bullish” on mangoes. You could buy tons today, but that’s costly as well as risky, because what if you are wrong.

Instead, you pay a farmer a small token amount and he gives you the right to buy 100 boxes of mangoes from him at today’s price, anytime in the next month. If mango prices double, you can sell them for a huge profit, but what if the prices fall, you only lose a small token amount.

This simple agreement is the options trading. And when investors use it to make profit from rising prices, they are using bullish option strategies.

What Does Bullish Mean in Options?

In the stock market, being “bullish” means you believe prices will rise and go up. Instead of buying a stock outright, you can use options to act on this belief because:

Low Costs: Like our mango example, you can control a large number of shares by just paying a small fee known as ‘premium’.
Lower Risk (for Buyers): If your intuition is wrong and the stock starts to fall, you will only be losing the premium paid.

Types of Bullish Options Trading Strategies

Let’s look at the most common strategies used by investors when they are bullish in the stock market.

1. Buying a Call Option

This is the most direct way to buy stocks during rising prices. In this you only pay a small fee for the right, but not the obligation, to buy a stock at a pre-determined price aka the Strike Price before a specific end date or the expiry date. Investors generally use this when they have strong feelings and they expect a big, fast jump in the stock price.

Advantages

Unlimited Profit: If the stock keeps rising, there’s no limit to how much you can make.
Limited Loss: Your maximum loss is capped around the premium you have paid.

Disadvantages

Time Decay: This is the biggest challenge as the value of your option decreases every single day, like a ticking clock.If the stock doesn’t move up in time, you can lose your entire investment even if you were in the right direction.

2. Bull Call Spread

This is for the smarter investors, where to reduce their initial cost, investors pay for the right to buy at today’s price but also sell the right to someone else to buy at a much higher price. Investors are still bullish on this, but they are limiting their potential profit to lower their initial risk and cost.

In a Bull Call Spread, you buy a call option and simultaneously sell another call option with a higher strike price. The premium you get from selling the second option makes the whole trade cheaper.

Advantages

Lower Cost & Defined Risk: It’s cheaper than buying a call alone, and you know your maximum possible loss from the start.
Reduces Time Decay Impact: Since you’ve both bought and sold an option, the negative effect of time passing is reduced.

Disadvantages

Limited Profit: Because you have already sold a call, your profit is capped. You cannot benefit from instant price rise once you sell.

Example: Bull Call Spread on Nifty 50, lets say the Nifty is at 18,000 meaning you are moderately bullish. You buy an 18,000 Call for a Rs.150 premium and sell an 18,500 Call for an Rs.80 premium. Your total cost is just Rs.70 (Rs.150 – Rs.80). This is your maximum loss. But here your profit is capped, the maximum you can make is the difference in strike prices (500 points) minus your cost (Rs.70), which is Rs.430.

3. Bull Put Spread

In this strategy you get paid upfront for your bullish view. In a Bull Put Spread, you sell a put option (your bet that the price won’t fall) and buy another put option with a lower strike price to act as insurance against a big crash. You receive a net income (a “credit”) for doing this.

Advantages

Upfront Premium: Investors get the money instantly in their bank account.
Profit from Sideways Movement: You can make money in this even if there is no movement in the stock until and unless the stock price starts to fall.
Time Decay: As time passes, the value of the options you sold decreases, which is good for you.

Disadvantages

Capped Profit: The maximum profit you can earn is only the net premium you received.
Higher Losses: The maximum loss is usually greater than the maximum profit.

4. Covered Call

This strategy is not for new traders, but for investors who already own the stock. In a Covered Call, you own the stock and you sell a call option against it. The shares you own are the “cover” for the call option you sell.

Let’s understand this from a quick example, think of it like owning a house, to earn extra money, you decide to rent out the top floor. You get a steady rent (the premium), but you agree that if someone offers a certain high price for your house, you will sell it.

Advantages

Generates Income: Investors can earn a stable income by “renting out” their shares.
Downside Protection: The premium acts as a small cushion if the stock price falls.

Disadvantages

Limited Profit: If the stock price shoots up, your profit is capped. You have to sell your shares at the strike price and miss out on the big rally.
Downward Risk: If the stock price crashes, you still own the falling stock. The small premium you received is much lesser than the loss incurred.

Which Bullish Strategy is Right for Investors?

Choosing the right strategy depends on how bullish you are and how much risk you’re willing to take.

Parameter	Long Call	Bull Call Spread	Bull Put Spread	Covered Call
Market View	“This stock will rocket up!”	“This stock will go up a bit.”	“This stock will not fall.”	“My stock will stay flat or rise a little.”
Maximum Profit	Unlimited	Limited (Defined)	Limited (Net Credit)	Limited (Capped at Strike)
Maximum Loss	Limited (Premium Paid	Limited (Net Debit)	Limited (Defined)	Substantial (Stock can go to zero)
Best For	High-conviction bets on a big, fast move.	Betting on a rise with low cost and defined risk.	Getting paid a premium for your confidence.	Long-term investors wanting extra income.

Conclusion

Options trading is a strategy where knowledge and discipline are utmost required. As a beginner, your first goal should be to secure your capital. Start with paper trading or an amount of money you are fully prepared to lose. Bullish options strategies can be a powerful tool to expand your income, but they also come with attached risks to it. So knowledge and experience with right timing shall always be considered.

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Frequently Asked Questions (FAQs)

Is Bull Call Spread and a Bull Put Spread different from each other?
Yes, with a Bull Call Spread, you pay a small amount (a debit) and need the stock to rise to make money and in Bull Put Spread, you receive a small amount (a credit) and make money as long as the stock doesn’t fall below a certain price.
Shall stocks be bought during the bullish market?
Buying stocks exposes all your investment to direct risk as buying stock requires money upfront and this money can be lost if the price starts to fall. However, Options offer a lower-cost way to trade with a defined, limited risk, but you are also fighting against time decay.
How much money is required to start options trading?
You can start with a few thousand rupees as buying a call or a bull call spread can be cheap, though selling a bull put spread requires a margin from your broker, which can be around Rs.1 lakh or more. A covered call requires the most capital, as you must own the underlying shares first.
What happens if the bullish feeling is wrong and the market falls?
In Long Call or Bull Call Spread, your losses are capped to the net premium you pay. With a Bull Put Spread, your loss is also limited but can be larger than the premium you received. With a Covered Call, you face the full risk of the stock price falling.
Can positions be closed before expiry?
Generally investors prefer to close their positions before the expiry date to lock in profits or cut losses. Waiting until the last minute can be risky as sudden price moves can erase your gains.

November 8, 2025

Best Brokers Offering Free Trading APIs in India

Things are not the same as they used to be when it comes to trading in India. Traders are using automated systems, data-driven strategies, and algorithmic trading these days.

Do you know what is going on behind the scenes of all this technology-driven trading? APIs.

An API lets your code or software connect to your broker directly. If you like coding, you can make your own trading app, automatically place trades, get live data, test your strategies, etc.

In today’s blog, we will discuss about the best broker that offers free APIs in India.

What is Trading API

An API (Application Programming Interface) is like a bridge between your computer program and the broker’s system. You can write your own code, which connects directly to the broker instead of logging into their app to make trades.

Below is what you can do with a trading API:

Access live market data, including order books and price feeds.
Automatically place orders to buy and sell.
You don’t have to log in to manage your portfolio positions.
Apply the algorithms to execute strategies for intraday, swing, or options trading.
Use past data to test your strategies.

Best Brokers Offering Free APIs

1. POCKETFUL

Pocketful is a fintech platform that makes stock investing and algorithmic trading easy for young and tech-savvy people. It is still new to the Indian market, but is already getting attention.

Pocketful’s API is free and made for developers who want flexibility. You can stream market data, make trades, and manage your portfolios without paying anything extra. The setup is easy, and the fact that it supports Python makes it suitable for beginners to use.

2. ANGEL ONE

Angel One’s SmartAPI is a free, developer-friendly platform that lets you automate trading and access live and historical market data. You can place orders, track your portfolio, and build anything from simple scripts to advanced trading bots. It works with REST and WebSocket, supports multiple programming languages, and is suitable for both beginners and fintech developers looking to create automated or copy-trading systems.

The platform also provides real-time updates for multiple market segments, including stocks, options, futures, and commodities. It offers features like automated entry/exit strategies, risk management tools, and GTT (Good Till Triggered) orders. A strong community and support resources help users learn, troubleshoot, and improve their trading systems efficiently.

3. ALICE BLUE

Alice Blue is a discount broker based in Bangalore that has built a good name for low-cost trading and a growing community of active traders. They have also worked with a lot of third-party algorithm platforms.

Their ANT API is free and lets you access live market data, place and manage orders, and examine historical data for backtesting. You don’t have to worry about compatibility, as it works with many languages, including Python and Java. Alice Blue can be a good option for anyone who wants to try automation without extra costs.

4. FYERS

Fyers is a new discount broker in India, but it is evolving rapidly because it prioritises technology. Investors adore them because their platform is updated, and they do not charge any fees for delivery trades.

The Fyers API is free and easy for developers to use. You can get live feeds, place orders, and see historical charts. This is amazing if you want to backtest or make your own dashboards. Fyers is a great choice for algorithmic trading because it works well with Python and has an active online community.

5. KOTAK NEO

Kotak Securities, an arm of the Kotak Mahindra Bank, is one of the biggest names in the broking industry. They established Kotak Neo, a discount trading platform, to keep up with the new wave of traders.

Neo’s free API lets you get market data, make trades, and keep track of your holdings. It stands out because you get the reliability and trust of a big broker without having to pay anything for the API. Although it is quite new, it is definitely worth giving a try.

6. DHAN

Dhan started back in 2021, but it is already gaining popularity among active traders. With sleek platforms, a user-friendly Interface, and a focus on technology, it is built specifically for today’s trading generation.

The Dhan API is free and made for developers. You can get live market data, place orders quickly, use WebSockets, and work with Python easily. The platform is easy to use for beginners, and the start-up process is smooth. Dhan is a great choice if you want algo trading tools without the extra fees or clutter.

7. SAMCO

Samco is a discount broker that has been around for a while. It is known for its flat ₹20 brokerage and easy-to-use trading platforms. It is not as big as Zerodha or Angel One, but it has found a place among traders who want to save money.

Samco gives you free access to its API that lets you see live market data, place orders, and keep track of your portfolio. It is a good choice for anyone who wants to automate simple trading strategies without paying a monthly fee.

8. SHOONYA by FINVASIA

Finvasia’s Shoonya platform is known for being a trading app with no hidden fees, and this alone makes it attractive to retail traders who don’t want to pay high fees.

The Shoonya API is free to use and has everything you need for algorithmic trading, like real-time data, order placement, and portfolio management. Shoonya is one of the best options for cost-conscious algo traders because it has no broker fees and a free API.

9. UPSTOX

Upstox is one of the most popular discount brokers in India, backed by Late. Ratan Tata. It has a visually appealing trading app and competitive brokerage plans, with more than 1 crore customers.

Upstox also have an API. Developers can use it for free and analyse market data and simple automation, but they have to pay for advanced features. If you are new to algo trading and already use Upstox, this is a great way to get an understanding of it before you jump into buying their premium plans.

10. TRADESMART

TradeSmart is an Indian stockbroker that offers discounts. They have built up a loyal group of traders. They are known for their easy-to-understand pricing plans and their focus on making trading affordable.

They also offer free trading APIs, which means you can make your own trading setups or test algorithm strategies without having to pay extra. TradeSmart is a great choice for someone who wants a broker that is easy to use, dependable, and cheap, and helps in automating trades.

Benefits of Using Trading APIs

Not everyone wants to spend thousands to try algo trading. That is where free APIs come into the picture.

Here is why they are helpful,

No upfront cost – You can learn and try things out without having to worry about paying bills every month.
Flexibility – You can set up your own trading systems the way you want.
Automation – This lets you execute trades faster and without getting emotional.
Backtesting – Helps you evaluate your plan on past data before exposing money at risk.
Paper Trading – Some brokers let you practise before you start trading live.

Conclusion

If you like coding or just want to try automated trading, picking a broker with free APIs can be a good choice. Indian traders now have a lot of opportunities. They can choose from well-known names like Zerodha and Angel One or emerging brands like Dhan and Pocketful. The key is to choose the one that works best for you. Keep in mind that an API is just a tool; what matters is how you use it to make your trading ideas real.

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15	10 Best Stock Market Simulators for Beginners – Platforms and Apps

Frequently Asked Questions (FAQs)

Are broker APIs free in India?
Yes! There are so many brokers, like Zerodha, Angel One, Pocketful, Alice Blue, and others, that let you use their services for free, but some may have limits or extra features that cost money.
Do I need to know how to code to use APIs?
If you know languages like Python or JavaScript, you can make and run strategies. Don’t worry; there are many tutorials and community forums to help you.
What is a broker API, exactly?
You can think of it as a bridge between your trading account and your app, bot, or program that lets you place trades automatically.
Can I use free APIs to trade live?
For sure. You can make real trades with most brokers’ APIs, and some brokers also provide paper trading for you to practice first.
Which broker is best for people who are just starting?
Pocketful, Angel One, and Dhan are all good options if you are starting. They all have active communities and easy-to-use platforms.

November 8, 2025

Top 10 Most Highest Subscribed IPOs in India

If you have been following the stock market, you’ve probably seen the excitement that surrounds a big IPO. The thrill, the anticipation, and the race to get an allotment are almost like the stock market’s version of a blockbuster movie release. Over the years, India has witnessed some incredible IPO. Some issues were so oversubscribed that the demand went through the roof. These record-breaking IPOs on the BSE and NSE showed just how eager people were to own a part of the company being listed.

In this blog, we will take a look at the 10 most subscribed IPOs in India and explore what made them so popular. So, let’s rewind a bit to some of the biggest IPOs the Indian market has ever seen!

What is IPO Subscription & Why Does it Matter?

When a company decides to go public, it offers its shares to investors through an Initial Public Offering (IPO). The moment the IPO opens, from large institutional investors to retail buyers, everyone starts placing bids for those shares. The total number of bids compared to the number of shares available is called the IPO subscription.

An IPO subscription shows how much demand there is for a company’s shares before they get listed on the stock market. For example, if an IPO is subscribed to 50 times, it means investors have applied for 50 times more shares than what is available, a sign that the issue is in high demand!

IPO subscriptions are usually divided into three groups:

QIB (Qualified Institutional Buyers): Big players like mutual funds, insurance companies, and foreign investors.
NII/HNI (Non-Institutional or High-Net-Worth Investors): Rich individuals who apply with larger amounts.
Retail Investors: Small investors applying for smaller lots, usually up to ₹2 lakh.

So, why does this matter?
Because subscription levels tell a story, they reflect investor confidence, market sentiment, and the overall excitement around an IPO.

Read Also: Top 10 Largest IPOs in India

Why do Investors pay attention to it?

It hints at listing gains – Heavily subscribed IPOs often list at a premium (though not always guaranteed).
It reveals hype and demand – You can easily see which companies are getting everyone’s attention.

That said, do not get carried away by subscription numbers alone. A company’s fundamentals matter much more for long-term success. Some IPOs soar on the day they list, while they may lose steam soon after if the business does not live up to expectations.

List of Top 10 All-time Highest Subscribed IPO

S. No	IPO Name	Subscription	Year	Listing Gain
1	NACDAC Infrastructure	2,209x	Dec, 2024	99.49%
2	Hoac Foods India	2013x	May, 2024	190.94%
3	Austere System Ltd	1077x	Sep, 2025	37.36%
4	Hamps Bio Ltd	1057x	Dec, 2024	99.49%
5	Kay Cee Energy & Infra Ltd	1052x	Jan, 2024	343.33%
6	Toss the Coin Ltd	1026x	Dec, 2024	90%
7	Medicamen Organics Ltd	993x	June, 2024	325.59%
8	Maxposure Ltd	987x	Jan, 2024	317.42%
9	Magenta Lifecare Ltd	983x	June, 2024	35%
10	GP Eco Solutions India Ltd	856x	June, 2024	318.88%

Conclusion

IPOs are always exciting; it is like getting a front-row ticket to a company’s growth story. Some IPOs grab headlines not just for the business itself but for the insane rush of investors. That said, remember this: a high subscription or a big listing day gain does not automatically mean long-term profits. Smart investing always comes down to looking at the company’s fundamentals and the bigger market picture.

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1	What are the Different Types of IPO in India?
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3	Why Does a Company Go Public & Launch IPO?
4	Performance Of IPOs Launched In 2023
5	OFS vs IPO: Key Differences and Benefits
6	Apply in IPO Through ASBA- IPO Application Method
7	What Is An IPO Mutual Fund? Should You Invest?
8	What is IPO Listing Time?
9	Strategies To Boost Your IPO Allotment Chances
10	From Private to Public: Decoding the IPO Journey

Frequently Asked Questions (FAQs)

What does it mean when an IPO is “oversubscribed”?
It just means more people want shares than are available.
Does a high subscription guarantee profits?
No. High subscription usually shows strong demand and can mean a good listing, but it doesn’t promise long-term gains.
What is the difference between mainboard and SME IPOs?
Mainboard IPOs are from big, established companies listed on NSE/BSE. SME IPOs are for smaller companies on the SME platform
How are IPO listing gains calculated?
It is the percentage difference between the IPO price and the stock’s listing price. Sometimes people look at the opening price; sometimes the closing price on the first day.
Can retail investors apply for all IPOs?
Yes! Most IPOs have a retail quota, usually up to ₹2 lakh. Bigger investors like institutions and HNIs have their own separate quotas.

November 7, 2025

Types of Dividend Policy Explained

When investing in the stock market, it’s important to understand how a company distributes its profits. A portion is distributed to shareholders as dividends, while the remainder is invested in business growth. This is known as the type of dividend policy in financial management. Different dividend policy types reflect a company’s thinking and strategy. In this blog, we’ll explore these policies and why they’re important to investors.

Understanding Dividend Policy in Financial Management

Dividend policy is the policy by which a company determines how much of its profits will be distributed to shareholders as dividends and how much will be reinvested for future needs or expansion plans. This decision is directly linked to the company’s financial management and reflects its long-term credibility and growth strategy.

Why it’s Important

Impact on Capital Structure and Cash Flow: After paying dividends, the company’s remaining funds are used to repay debt, expand, or pursue research.
Investor Confidence: A consistent and stable dividend policy makes investors believe the company is strong and reliable.

Impact on Valuation

Dividend policy also impacts a company’s market value. Paying regular dividends or declaring special dividends sends a message to the market that the company has a positive future. Many large Indian companies follow this strategy.

Key Theories

Modigliani–Miller Hypothesis: This theory holds that if the market is completely fair and tax-free, dividend policy will have no impact on a company’s value.
Residual Dividend Theory: According to this model, a company first completes necessary investments and the remaining profits are distributed as dividends.

Types of Dividend Policies

Dividend Policy Type	Description	Better for whom
Regular Dividend Policy	Paying fixed dividends at regular intervals	Investors seeking stable income
Stable Dividend Policy	Stable dividends despite fluctuating profits	Long-term investors
Irregular/Unstable Dividend Policy	Payout depends only on profits	High-risk investors
No Dividend Policy	Reinvest all profits back into the business	Growth-Focused Investors
Residual Dividend Policy	Sharing profits after meeting investment requirements	Balanced Investor
Hybrid/Compromise Dividend Policy	Minimum dividend + bonus in good years	Those seeking both stability and growth
Special Dividend Policy	Lump sum or occasional dividends	Those seeking short-term returns

1. Regular Dividend Policy

A regular dividend policy is a policy in which a company pays its shareholders a fixed dividend each year or quarter. Its purpose is simply one: to assure investors that their investment will provide consistent and stable income.

Example : ITC Ltd. in India is a good example of this policy. ITC has been consistently paying dividends for several years, making it a favorite among investors seeking regular income from stocks.

Advantages and Disadvantages:

The advantage is that investors receive a steady cash flow each year, maintaining their confidence in the company.
The disadvantage is that if profits decline in a particular year, the company may be forced to make a payout, which puts pressure on cash flow and may lead to a shortage of funds for growth projects.

2. Stable Dividend Policy

Under this policy, a company pays a roughly consistent dividend regardless of profit fluctuations. This gives investors the assurance that they will receive a stable return every year.

Example : Large IT companies like Infosys and TCS operate on this model. Whether profits fluctuate or increase, these companies typically pay a stable dividend to their shareholders.

Advantages and Disadvantages :

The advantage is that long-term investors receive a steady income and have confidence in the company’s financial position.
The disadvantage is that the company sometimes has to invest less in growth projects or research because it needs to maintain payouts.

3. Irregular Dividend Policy

This policy has no fixed dividend payment pattern. The company’s payout depends entirely on its profits. If the year is good, dividends will be paid; otherwise, the company can withhold payouts.

Example : Vedanta Ltd. in India can be used as an example. The earnings of companies in the metal and mining sectors are highly dependent on market prices, so dividends can sometimes be high, sometimes low, or even nonexistent.

Advantages and Disadvantages:

The advantage is that the company is free from pressure and can use the cash as needed.
The disadvantage is that investors lack stability and it becomes difficult to predict whether they will receive a dividend next time.

4. No Dividend Policy

Under this policy, the company reinvests all profits into business growth and new projects. Investors do not receive cash returns, but instead benefit from the company’s future value appreciation.

Example : Zomato in India is a perfect example. This company does not yet pay dividends and invests all profits in expansion, technology, and marketing to increase the company’s value over the long term.

Advantages and Disadvantages:

The advantage is that the company can grow rapidly, and shareholders can realize capital gains as its value increases in the future.
The disadvantage is that investors who require regular income are disappointed because they do not receive dividends.

5. Residual Dividend Policy

In this policy, the company first determines how much it needs to invest in its business. After spending on essential projects, research, or expansion, any remaining profits are distributed to shareholders in the form of dividends. Dividends are the “residual portion.”

Example : Larsen & Toubro (L&T) in India is a good example of this model. Being an infrastructure and project-based business, L&T declares dividends only after meeting its investment needs.

Advantages and Disadvantages:

The advantage is that the company can invest without compromising its growth projects.
The disadvantage is that dividends are not stable, which doesn’t guarantee investors regular income.

6. Hybrid (Compromise) Dividend Policy

In this policy, the company balances both approaches. This means it pays investors a minimum, stable dividend and, if the year is good, adds a bonus or additional dividend. This can be called a compromise or balanced approach.

Example : Reliance Industries is a perfect example. The company maintains a minimum payout and occasionally pays a special dividend in good years, providing investors with stability and bonus returns.

Advantages and Disadvantages:

The advantage is that investors receive stability, while the company also has the flexibility to offer additional rewards in good years.
The disadvantage is that this model can sometimes confuse investors about the company’s long-term strategy.

7. Special Dividend Policy

Under a special dividend policy, a company occasionally pays a lump sum or additional dividend in addition to its regular dividend. This typically occurs when the company has accumulated excess cash or receives cash inflow from a major transaction, asset sale, or government directive. It is not considered part of regular income but rather serves as a bonus for investors.

Example : Coal India and several other PSU companies in India periodically pay special dividends. Recently, due to the government’s divestment policy and high cash reserves, these companies paid substantial special dividends to their shareholders.

Advantages and Disadvantages

The advantage is that investors receive unexpected additional income, which further increases their confidence in the company.
The disadvantage is that it is not stable, so it cannot be relied upon for long periods of time.

Challenges in Implementing Dividend Policy

Different Perceptions of Investors and Management : Investors often expect a good dividend every year, while management often prefers to reinvest profits back into the business. Striking a balance between these two is difficult.
Profits and Market Uncertainty : A company’s profits are not consistent year after year. If earnings decline or the market fluctuates, maintaining a stable dividend becomes a significant challenge.
Pressure from Large Investors : Institutional investors, such as mutual funds or insurance companies, often demand higher payouts. Companies must strike a balance between their long-term strategy and their expectations.
Tax and Regulatory Rules : In India, starting in 2020, dividend taxes are directly borne by shareholders. This reduces their net income and reduces the attractiveness of dividends. Furthermore, regulatory restrictions apply to certain sectors.
Cash and Debt Situation : If a company has high debt or tight cash flow, it becomes difficult to pay dividends. In such circumstances, management must first focus on repaying debt and running the business.

Types of dividend policy in financial management

Companies adopt different dividend policies in financial management. Their purpose is not only to distribute profits, but also to reassure investors and balance business growth. Let’s understand the main types:

1. Stable Dividend Policy

This is the most popular method. In this, the company continues to pay a roughly equal dividend regardless of profit fluctuations. This assures investors that they will receive something every year.

2. Constant Dividend Policy

In this model, the payout is always linked to a percentage of profit. This means that if earnings increase, the dividend will also increase, and if earnings decrease, the payout will also decrease.

3. Residual Dividend Policy

Here, the company first spends on essential projects or expansion. Only the remaining amount is distributed to shareholders as dividends. This policy is mostly adopted with long-term growth in mind.

4. No Dividend Policy

Many growth-focused companies reinvest all profits back into the business and do not pay dividends. Their goal is to increase the company’s value in the future and benefit investors through rising share prices.

5. Hybrid Dividend Policy

This is a hybrid. The company pays a minimum dividend, but if the year is good, it can also declare a bonus dividend on top of that.

6. Irregular Dividend Policy

This policy has no fixed pattern. The payout depends entirely on profits and cash flow. Sometimes the payout is good, sometimes very low or even nonexistent.

Read Also: What is Dividend ETF?

Factors Influencing Dividend Policy

How a company decides its dividend depends on several factors. First, its earnings and cash flow are crucial. If profits are consistent, it’s easier for shareholders to receive dividends. However, companies with fluctuating earnings tend to reinvest most of the money back into the business.

Another important factor is growth opportunities. Companies that have the opportunity to invest in new projects or technology tend to focus more on expansion by paying lower dividends. This is why startups and IT companies often have lower payouts.

Taxes and investor preferences also play a role. Some expect regular income, while others are more attracted to long-term value growth. Furthermore, if a company has significant debt, it may prioritize paying it down first.

Finally, each industry has its own trends. FMCG companies like ITC and HUL are known for stable dividends, while companies in the real estate or infrastructure sectors reinvest most of their profits.

Conclusion

A dividend policy isn’t just a way to distribute profits, it’s also an indicator of a company’s mindset and financial health. Whether a company chooses a stable or residual policy, each model works according to its investors and growth plans. A wise investor is one who understands a company’s dividend policy and aligns it with their financial goals. Ultimately, the right policy is one that strikes a balance for both the company and investors.

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4	Top 5 Highest Dividend Paying Stocks in India
5	How to Invest in ETFs in India – A Beginner’s Guide

Frequently Asked Questions (FAQs)

What is a dividend policy?
It determines whether profits will be distributed or reinvested.
How many types of dividend policy are there?
There are approximately 6–7 main types.
Which dividend policy is best for investors?
It depends on the investor’s needs.
Why do some companies not pay dividends?
They invest all profits in growth.
Does dividend policy affect share price?
Yes, it affects both trust and price.

November 7, 2025

Blog

What is Convertible Debenture?

Why are convertible debentures offered?

Types of Convertible Debentures

Fully vs. Partially Convertible Debentures

Key Features of Convertible Debentures

Conclusion

Frequently Asked Questions (FAQs)

Are convertible debentures advantageous for new investors?

What are the main risks attached to convertible debentures?

How can I make money from a convertible debenture?

What happens if the invested company goes bankrupt?

Can debentures be converted into shares forcefully by the company?

What is the Loan-to-Value (LTV) Ratio

What is the formula for LTV?

What is the role of LTV in margin trading?

How does the broker decide LTV?

Why is Loan-to-Value Ratio so important in trading?

1. Increasing LTV poses a risk of margin call

2. It also affects interest rates

3. Higher LTV means more leverage and more risk

4. Understanding LTV is essential for successful trading

Factors That Influence LTV in Margin Accounts

Common Mistakes Investors Make Around LTV

How to Manage and Control Your LTV Ratio

Conclusion

Frequently Asked Questions (FAQs)

What is the full form of LTV in margin trading?

What happens if my LTV ratio increases too much?

Is a lower LTV always better?

How can I reduce my LTV ratio?

Does every broker offer the same LTV limit?

Commodity ETFs – An Overview

Types of Commodity ETFs

1. Gold ETFs

2. Silver ETFs

3. Futures-Based Commodity ETFs

4. Multi-Commodity or Basket ETFs

Best Commodity ETFs in India

1. Nippon India ETF Gold BeES

2. SBI Gold ETF

3. HDFC Gold ETF

4. ICICI Prudential Silver ETF

5. Kotak Silver ETF

How to Choose the Right Commodity ETF

Taxation of Commodity ETF

1. Short-Term Capital Gains (STCG)

2. Long-Term Capital Gains (LTCG)

3. Securities Transaction Tax (STT)

Conclusion

Frequently Asked Questions (FAQs)

Are commodity ETFs safe to invest in?

Do commodity ETFs pay dividends?

When is the best time to invest in commodity ETFs?

How can I track performance?

What is the minimum amount to invest in a commodity ETF?

Basic Stock Market Terminology

1. Share or Stock

2. Bid and Ask Price

3. Broker

4. Trading Volume

5. Liquidity

6. Volatility

7. Market Capitalisation

8. Initial Public Offering (IPO)

9. Stock Split

10. Blue-chip Stock

11. Market and Limit Orders

12. Bull and Bear Market

13. Dividend

14. Index

15. Stoploss

16. ETF

17. Demat and Trading Account

18. Market Capitalisation

19. Portfolio

20. Capital Gain

Conclusion

Frequently Asked Questions (FAQs)

What is the difference between a demat and a trading account?