IPO Frequently Asked Question(s) provide answers to commonly asked questions about IPO’s in Indian Stock Market. This IPO FAQ Category helps IPO investors for their better understanding of IPO’s and to resolve their quires.
We welcome you for your comments to improve answers of the questions asked in this category. Please feel free to post comments. We appreciate your participation in building this page simple, easy to understand, relevant and correct information provider to the Indian Investor Community.
If you don't find answer of your question, do not hesitate to ask our expert team by clicking 'Ask your question' link on the top of this page.
A broker is a member of a stock exchange, who is permitted to do equity trades in there. Broker is enrolled member of the exchange and is registered with SEBI.
In other word broker is an intermediate person (or a company) between an investor and a stock exchange. They buy & sell shares and other securities for investors in stock market.
Please note that an investor cannot direct deal with stock exchange.
I have lost the share certificates I was holding for XYZ Company. How do I get duplicate share certificates?
Registrar of the company usually helps in resolving this kind of issues.
If you know the registrar of the company, contact then with your quires.
If you do not know the registrar of the company, visit ‘Investor Relations' section of the company's website or contact the company and ask them about the registrar handing their share.
For example: If you lost Reliance Industries Limited (RIL) share certificates, contact:
In terms of an IPO, P/E is the issue price divided by the most recent Earning Per Share EPS. This ratio tells you if the issue is under-priced or over-priced vis-à-vis the industry P/E. All other things being equal, if the P/E of the company is less than the industry P/E then the issue is under-priced. If the P/E of the company is higher, then the issue is over-priced.
Bonus shares are free shares issued by the company to its existing share holders. Bonus shares are issued in a ratio of the shares an investor hold. For example when a company offers 1:5 bonus shares, it means a share holder will get 1 free share for 5 shares. So if an investor holds 100 shares at the time of bonus then they will become 120 shares.
Bonus shares are usually announced by the company with a record date, the date which is considered for the bonus shares. All the investors holding the shares on the record date are eligible for bonus shares.
Company usually gives bonus shares as a substitute of dividend payouts.
The face value of the share doesn’t get change after bonus. This is unlike stock split.
Bonus shares increases the number of shares in the market which changes the Earning Per Share EPS (companies net profit / number of shares). As net profit is still remain same and the numbers of shares are higher, shares EPS goes down after the bonus shares are issued.
Ideally it should reduce the share price but it doesn’t happen in the ratio of shares are offered as bonus shares thus it usually in the profit of the share holders. This happens because of increase in liquidity of the share and signal of company’s promise to share its profit with its investors.
0 Comment(s) - 
