Be A Prudent

Investor

INTRODUCTION TO SECURITIES MARKET

What are Securities?
1. Equity Shares
2. Preference Shares
3. Debentures / Bonds
4. Mutual Fund Units
5. Government Securities
6. Others

What are not Securities?

1. Fixed deposit with banks or companies
2. Insurance policies
3. Provident Fund / Public Provident Fund
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What is Securities Market?
1. Market is a place where things are bought and sold.
2. Securities market is a market where securities are bought and
sold.
3. There are various participants / agents / entities and products
in the securities market.
4. Securities Market is part of Capital Market.

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Why is Securities Market essential?
1. Provide opportunity for
entrepreneurs to raise capital for
business.

2. For investors, stock markets

provide a way to invest money
and exit when they want.

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Primary and Secondary Market

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 Why Do We Invest?
Investment is necessary to support your financial needs when you do not earn money.

1. By investing a portion of your income you allow money to

grow and work for you.
2. 3 parameters to assess suitability of any investment
avenue are –
i. Return potential
ii. Safety
iii. Liquidity
3. Various avenues where money can be invested, are
broadly classified into some groups, known as ‘Asset
Class’. Stocks or Equity shares are most popular class of
assets.
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Why to invest in Securities?

Capital growth Diversification

Tax benefits Returns

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 Benefits of Investing Early
Starting investing early will not only make it easier to build wealth but also increase the
probability of reaching financial stability at an early age.

Power of compounding:
In simplest terms, compounding interest means
interest on interest. Each time you earn interest on
your principal, it is added to the original amount,
which then becomes the principal for the next
cycle.

This allows exponential growth for your interest.

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 Benefits of Investing Early
Early Investor Late Investor

Age 25 years 35 years

Amount Invested / Month ₹ 5,000 ₹ 5,000

Rate of Return 6% pa 6% pa

Total Investment ₹ 21 Lakh ₹ 15 Lakh

Amount at the age of 60 years ₹ 71.59 Lakh ₹ 34.82 Lakh

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Benefits of Investing Early

1. There are a lot reasons why starting early

is a good idea.

2. Basically, starting early can help you

achieve financial independence, fulfil
your dreams, and retire early, if you so
wish.

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How to choose a Security for investment?
Three important considerations for any product

Returns Safety

Liquidity

The degree of important of three components varies from person to person.

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Risk – Reward Relationship
Reward
High

Such products do Derivatives

not exist Equity and equity
oriented products

Low High
Risk
Bank deposits Schemes
Post office savings promising
unrealistic returns
PPF
Debt oriented
mutual funds Beware!!!!!!!

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Low 12
Indian Capital Market - Overview

Market Regulator SEBI

Stocks and Commodities

Depositories Other Intermediaries
Derivative Exchanges

Stock Brokers,
NSE, BSE, MSE, RTAs, Mutual
NSDL, CDSL
MCX etc. Funds, Investment
Advisors etc.
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Role of Depositories1. Depositories are institutions which hold your
securities (Shares, bonds, debentures, Mutual
Fund Units etc.) in electronic form.

2. They are responsible and accountable for safe-

keeping of your securities and keep a record of
your holdings and transactions in securities.

3. Depository interacts with its clients or investors

through its agents, called Depository Participants
(DP).

4. To avail the services provided by a Depository, one

needs to open Depository account, also known as
Demat account, with any DP. 14
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About NSDL

Established in 1996, First One of The World’s Largest Wide Network of

Depository in India Depository Depository Participants
Across The Country

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 October
NSDL’s Progress 2021
December
December 2020
December 2015
2010

67.56 119.30 227.51 294.82

Custody Value in ₹Lakh Crore - Total Value of All Assets held in All NSDL Demat Accounts
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NSDL’s Progress

300
Bank deposits and
NSDL Custody Value
250 244

200 186
172
160
153
146
150 140
129 Aggregate Bank Deposits of All Scheduled Banks (in ₹ Lakh Crore)
117
110

100
NSDL Demat Custody Value (in ₹ Lakh Crore)

50

Bank Deposit Source : RBI Bulletins

0
Mar. 31, 2017 Mar. 31, 2018 Mar. 31, 2019 Mar. 31, 2020 Mar. 31, 2021

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NSDL’s Progress
300

GDP and NSDL Custody Value

250 244

203
197
200 190 186
171 172
160
154
146 GDP at Market Price (in ₹ Lakh Crore)
150
NSDL Demat Custody Value (in ₹ Lakh Crore)

100

50

0 GDP Source : [Link]

2016-17 2017-18 2018-19 2019-20 2020-21

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Indian Securities Market - Depository System

Issuer Company / RTA

Clearing Corporation (NSE Clearing Limited/

Other Depository Indian Clearing Corporation Limited)

DP 1 DP 2

Stock Broker / Trading Stock Broker / Clearing

Member 1 Investor 1 Investor 2 Member 2
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Starting Investment in Securities Market

Accounts Required

Bank Account Trading or Broking Account Demat Account

Many DPs offer a 3-in-1 account opening facility which gives you the convenience of opening a trading, demat and bank
account – all together. Now some DPs are now offering online demat account opening. Trading or Broking account is
required only if you want to buy / sell shares through stock exchange.
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Documents required for Opening Demat
Account

Aadhaar Passport
Card Officially
Valid
Document

PAN Card
Cancelled Cheque
Driving
License Voter ID or Bank Passbook
or Statement
Proof of Identity
Proof of bank account
and Address (any of the above)
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Use of your Demat Account
1. Apply for IPOs, NFOs and receive allotment directly in demat account by
mentioning your DP ID and Client ID in application or subscription form.

2. Receive corporate benefits (bonus, rights etc.).

3. Cash benefits like dividend, interest or maturity amount payable on bonds

etc. are credited directly in linked bank account. Keep your bank details
updated in demat account.

4. Ease in getting finance against your investments through Loan Against

Shares / Digital LAS.

5. Participate in Securities Lending and Borrowing Scheme.

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 NSDL Consolidated Account Statement

Includes transactions and holdings in Includes Mutual Funds Units held

investor’s Demat account(s) in Statement of Account (SOA)
form

Consolidated view of his/her Register / Update your email ID a

financial assets t [Link]
to get e-CAS regularly

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 NSDL’s Investor Centric e-Services
• View transactions, holdings
• View holdings along with
along with valuation
valuations
• Subscribe to CAS
• Participate in e-Voting
• Update email ID for CAS * • Submission of delivery
• View and download 12 past CAS
NSDL Speed - instruction
• Participate in e-Voting
Mobile App* • Confirmation of e-DIS
• Register for IDeAS

• NSDL's internet facility to

enable users to submit
Facility for shareholders to vote various instructions online,
electronically on resolution of NSDL
including Margin Pledge
companies, Anytime, Anywhere e-Voting* • All features of IDeAS
• You may register at
[Link]
*Free for all demat account holders
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Remember
1. Investment is not gambling.

2. You need to put your effort for your money to work for you.

3. You must know -

a) what you are investing in?

b) who you are dealing with?

c) where to go for help?

4. Do not believe in rumours / market tips. Dot take it. Don’t give it.

5. Market timing is impossible for small investor.

6. The more you trade, the more broker earns.

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Be a Prudent Investor

Inform your DP about any change in your Personal Information such as

address, bank account immediately.

Always mention your Mobile Number and email ID in account opening form
and keep them updated.

NSDL publications and presentations are available in Hindi, English and other
languages at [Link]  Education

Schedule of Awareness Programs, Registration and Feedback facilities are

available at [Link]
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Be a Prudent Investor – Don’ts

Never deal with any unregistered or unauthorised market intermediary.

Check on the SEBI’s website that your stock broker / authorised person,
mutual fund distributor, investment advisor are registered with SEBI.

Do not act on Unsolicited SMS and emails providing Tips, stock

recommendations, assured returns etc.

Never invest with borrowed money. Avoid Unnecessary loans and credits.

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NSDL Newsletter for Investors
The Financial Kaleidoscope – Free monthly newsletter in ह िं दी Hindi and English

Newsletter – The
[Link] Education
Financial Kaleidoscope
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More Information / Useful References
1. SEBI website - [Link] and [Link]

2. NISM website - [Link] (NISM conducts many certification programs)

3. National Centre for Financial Education - [Link]

4. Platform for Investor Education - [Link]

5. Unauthorised collection of deposits - [Link]

6. NSE Website - [Link]

7. BSE website - [Link]

8. IEPF Authority – [Link] and [Link]

9. NSDL website - [Link]

[Link] website - [Link]

[Link] Market data links - [Link]
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Career Opportunities in Securities Market
[Link] of financial products
[Link] advisory services
[Link] with registered market intermediaries like stock brokers and
mutual funds

[Link] with regulatory bodies like SEBI

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"An investment in knowledge
pays the best interest."

Benjamin Franklin
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THANK YOU