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EQUITY FAQs

 

GENERAL QUESTIONS

What are Equities?

Equities are pieces of a company, also known as "stocks or shares". When you buy shares of a company, you're basically purchasing an ownership interest in that company. A company's stockholders or shareholders all have equity in the company, or own a fractional portion of the whole company. They buy the shares because they expect to profit when the company profits. Companies issue two basic types of shares: equity and preference shares.

A. Equity Shares

Both public and private corporations can issue common shares. Equity shareholders are the owners of a company and initially provide the equity capital to start the business.

Equity share ownership in a public company offers many benefits to investors. The following are some of its main advantages:

  • Capital appreciation
  • Dividends
  • Voting privileges
  • Marketability - shares can easily be bought or sold
  • Dividend tax credit and capital gains tax

There are also a few drawbacks to owning equity shares. Although part owner of the business, common shareholders are in a relatively weak position, as senior creditors, bond holders and preferred shareholders all have prior claims on the earnings and assets of a company. While interest payments are guaranteed to bond holders, dividends are payable to shareholders at the discretion of the directors of a company.

B. Preference Shares

Preference shares is a class of share capital that generally entitles shareholders to fixed dividends ahead of the company's common shares and to a stated rupee value per share in the event of liquidation. Typically, the preferred shareholder occupies a position between that of a company's creditors and its common shareholders.
As preferred shares have characteristics of both debt and equity, they provide a link between the bond and common equity sections of a portfolio. One shortcoming of preferred shares is that many are non-voting. However, after a specified number of preferred dividends are withheld, voting rights are usually assigned to preferred shareholders.

Why invest in equities?

Investing in equities/shares offers many benefits over other asset classes like a high level of liquidity which unlike property, gives you ready access to your money. There are more than 6000 companies listed on the stock market in which you can buy shares so there are plenty to choose from to match your investment needs. Other benefits include:

Returns: Stocks can help you build long-term growth into your overall financial plan. Over the longer term, shares can produce significant capital gains through increases in share prices. Some companies also issue free or bonus shares to their shareholders as another way of passing on company profits or increases in their net worth. History has repeatedly demonstrated that stocks, as an asset class, have outperformed every other type of investment over long periods of time.

Investment Returns

(Data Source: RBI handbook of Statistics, NCDEX)

In addition, stocks pay dividend income, which has the potential to grow over time. Shares that pay regular dividends are called income stocks. These companies have capital appreciation potential and when dividends are reinvested into additional shares, there is also the potential to compound investment returns.

Ownership: Stock represents an ownership or equity stake in a corporation. If you are a stockholder, you own a proportionate share in the corporation’s assets. That means you gain part of the ownership of the company.

Tax Benefits: Investment in shares reaps great tax benefits. The dividend income generated on shares is completely tax-free. Long-term capital gains arising on equity investment is not taxed by the government. That means, if you invest in a company and keep the shares for 12 months, you don’t need to pay any tax on income you earn on selling the shares after 12 months. Short term capital gains tax on shares is also just 10%, while investment in other asset classes attracts short-term capital gains tax of 30%.

Control over your financial future: You can decide exactly how your money is invested, enabling you to have a lot of control over your finances. You can choose to invest independently using your knowledge and expertise, share this responsibility with Arihant who can advise you on what shares to buy and sell or ask Arihant to manage portfolio for you.

What are the frequently used terms when investing in equities?

Bid: This represents the highest price a prospective buyer is willing to pay for a security.

Offer (Ask): This represents the lowest price a prospective seller is willing to accept for a security.

Market Order: An order to buy or sell a specified number of shares at the best available price at the time the order is received on the exchange floor. All orders not bearing a specific price are usually considered "at the market" which could mean paying the "offer" when buying or accepting the "bid" when selling.

Limit Order: An order for which you request a specific price at which the transaction may be executed.

Stop Buy and Stop Loss Orders: Orders to buy or sell that are placed above or below the current market price, which become active orders when the price of a board lot rises or falls to the specified price. These orders may be placed to execute at the market, at a specified limit or within a specified price range. A stop buy order can be used to protect against losses in a short sale, whereas a stop loss order can be used to protect a paper profit or to limit a possible loss when you already own the shares. Not all stock exchanges will accept these orders. Stop buy and stop loss orders are risky because they may not necessarily fill at the specified price but at the best possible price available at that time.

Life of an Order

Life of an Order

OPENING YOUR ACCOUNT

Am I eligible for opening a trading account?

Any person who is an individual resident of India, HUF, NRI, proprietary firm, partnership firm, or a company can open a trading account with Arihant.

How do I open a trading account with Arihant?

It’s simple. You can apply in one of three easy ways:

By Phone
Call 022-42254800 and our executive will give will help you complete the application phone over the phone or will visit you. Alternatively, if you want we will mail you a new account kit.

By email
You can email us and give-in your contact information and our executive will get in touch with you shortly.

By Mail

Does it cost me anything to open an account?

We do not charge any fee for opening a trading account. However there is a mandatory stamp charge of Rs. 220 that Exchange levies for opening an account, which is debited to your trading account once the account is opened. Bank and Depository Participant (DP) account opening charges, if applicable, are payable separately.

What documents are required for opening an account?

You need to submit the following in order to open an account with us along with the client registration form:

  • PAN card (compulsory)
  • Address proof (ration card / passport / driving license, electricity/telephone bill)
  • Bank Statement
  • Demat Account Statement or slip (if any)¹
  • Customer Agreement
  • Latest passport size photograph (one)

¹ if you do not have a Demat account, you would also be required to open a Demat account to start trading

How long does it take to open an account?

If all documentation submitted by you is in order, it takes about 1 business day to open your trading account, of us receiving the documents. At any point of time you can check the status of your account by e-mailing us or calling us and any of your queries will be responded promptly.

What if I already have a Demat/Bank account with another Bank or Depository?

You can use your existing bank and DP accounts. You will have to ensure that we receive clear funds in our accounts 2 days before pay-in to the Exchange. You will also have to ensure that funds for margins are also in our account before placing an order.

What is the correct address to send documents to?

Our mailing address is:
6, Lad Colony, Y.N. Road,
Indore-452001.
Madhya Pradesh, India

 

STARTING TO TRADE AND DEPOSITS

How much money do I need to start trading?

After registration, you will be required to deposit with us a certain amount of initial margin deposit. There is no fixed minimum stipulated amount that you need to deposit, but for ease of your trading operations, it should not be less than Rupees Five Thousand (Rs. 5,000 only).

How quickly am I able to trade?

Once your account is opened, you can generally start trading immediately, if you already have a Demat account. If you do not have a Demat account, then along with your trading account you will be required to open a Demat account that together require 2-3 working days to activate, if all your documents are in order. Once both the accounts are opened, you can start to trade straight away.

If you wish to trade online you will receive a password by email and this will be sent within 24 hours of your application.

How do I make my initial deposit?

Choose the method that works the best for you:

  • By Wire Transfer: You can transfer amount electronically to out bank account, for more information on this, call us at: 0731-3016100.
  • By Cheque: You can send us a cheque made payable to Arihant Capital Markets Ltd.along with your application form.
  • On which exchange can I buy and sell shares?

You can buy & sell shares that are listed on any of the recognized Stock Exchanges i.e BSE & NSE.

How to trade?

As an Arihant share dealing customer, you can trade in a number of ways.

  • Tele-trade - With our Tele-trade service, you trade just through making a phone call. Arihant offers a dedicated telephone trading service at all its branches that allow you to buy and sell shares and derivatives listed on NSE and BSE.
  • i Trade – You can trade online with access to our Arihant Internet trading site. Arihant online trading service is easy to use and secure. It's a service that allows you to make effective decisions using the most up to date information available. At Arihant, trading is just a click away - anytime-anywhere at your convenience.
  • With a broker's assistance - Take control of your finances at Arihant Investor Centre, where you are provided with a range of information and tools to make investing easy. In our Investor Centre you can:
    • Place stock trades with the assistance of a professional, certified Arihant operator
    • Open an account and choose from our wide range of products and services
    • Speak face-to-face with our experienced Investor Centre Representatives
    • Make cheque or stock deposits
    • Access real-time share price quotes
    • Keep up-to-date with company and market news as it breaks
    • Invest in mutual funds or IPOs
    • Use our research facilities
    • Daily trading calls based on Technical Analysis

Is calling & placing an order on telephone secure enough?

We ensure that all your information is secured and do not pass it on to any third parties. All our dealers have special cabins allotted where they place orders upon phone request. The privacy and security of the information is strictly maintained.

DEPOSITORY

Do you offer depository/Demat services?

Yes, we offer Depository services. We are depository participants with NSDL and CDSL. For more information on depository services click here.

Will Arihant help me dematerialize/ rematerialize my shares?

Yes, ACML DP Services, will help you to dematerialize/rematerialize your shares.

What if I already have a Demat/Bank account with another Bank or Depository?

You can use your existing bank and DP account. You will have to ensure that we receive clear funds in our accounts 2 days before pay-in to the Exchange. You will also have to ensure that funds for margins are also in our account before placing an order.

How does the movement of shares take place from my demat account?

In case of sales, the investor would need to transfer the shares to the pool account of ACML for the specified settlement number. The CM ID for NSE is IN558703 & for BSE it is IN603131. The delivery should necessarily come from the demat account of the investor and not from any other person. Similarly ACML would directly transfer shares bought to the account of the investor.

DEALING ONLINE

Can I check my account details, trades and balances online?

Yes, we offer our customers complete online support. Once you open an account with us, we will send you a unique username and password, with which you will be able to access your account online. Our executive will guide you on how to check your account and trade details online. In our client welcome pack you will also receive a CD that will give you all the information on the services you will get once you become an Arihant customer and also on how to access your account online.

How can I see my statement and account balance online?

Backoffice (under the My Arihant menu) shows all the activity in your account. You can see upto 12 month’s activity online by selecting your desired start date and end date. If you need more information on this, you can call or email us and our executive will be glad to assist you.

Can I receive my contract notes online?

Yes, we send digital contract notes through email to our customers every day.

Can I receive account statements electronically?

You can access your account details (like financial details, holdings, transactions) online through the backoffice link. However, we do not provide the account statements electronically. This may be provided if the client requests for a particular detail, but not on a regular basis.

What is the settlement period?

When you place a trade the stock and cash don’t change hands until the settlement date which is normally 2 working days from the day you placed the trade (T+2). This means that if you place a trade to buy stock on Monday you must deliver the payment for it by Wednesday when the stock will be delivered to you. Similarly, if you sell stock on Friday then it will be delivered to the buyer on Monday and you will also receive payment for it on Monday. However, you don’t have to wait until the settlement date to sell shares that you’ve bought.

Can I amend or cancel a trade?

If the trade has been executed then you can't amend or cancel it.  If the order is still pending (this applies to limit orders and orders placed outside of market hours) and hasn't been executed then you can cancel or modify the order. To do this you need to click F3 that will show your pending orders. You will then have the chance to review the order details and if you want to go ahead and cancel or modify any or all of your order(s) then

  • Right click on the order you want to cancel or modify
  • Click on the cancel option if you want to cancel it
  • Click on modify option and a window will pop up wherein you can change the price or quantity of the selected security

SERVICES

On which exchange will I be able to buy and sell shares?

Once you have opened an account with us, you can buy & sell shares on The Stock Exchange, Mumbai (BSE) and National Stock Exchange of India (NSE).

How will I receive my contract note? If I don’t receive my contract note what should I do?

You will receive the digital contract note through email or if you do not have an email account then you receive it by post. If due to some reason, you don’t receive the contract note, then you can contact your nearest Arihant branch office and they will arrange a copy for you.

What kinds of services does Arihant provide?

Arihant is a one-stop financial services destination where you can trade, invest, make IPO application, invest in mutual funds, take advisory services, have your portfolio professionally managed and all in one place and with extraordinary value.

We Offer:

  •  Equity Broking – NSE, BSE
  • Derivatives
  • Portfolio Management Services
  • Depository Services – NSDL, CDSL
  • Mutual Fund Investment
  • Institutional Broking
  • Internet Trading
  • Advisory Services – PCG
  • Merchant Banking
  • Commodities Trading – NCDEX, MCX
  • Research
  • IPO and IPO Financing
   

Click here for a product catalogue.

This wide array of financial solutions allows you to simplify your financial life by integrating ALL your finances in one easy-to-use location. You can conveniently access all your accounts and financial services with a single user ID and password.

What can I invest in?

With Arihant, you can invest in a wide range of investment options including equities, derivatives, IPO, mutual funds and commodities. Click here for a full range of investment options with Arihant.

Do you offer investment advice?

Yes. Arihant lets you pick and choose exactly the level of advice and guidance you need.¹

  • Invest on your own using powerful online tools.
  • Get advice when you need it from one of our experienced Financial Advisors.
  • Request full portfolio management from Arihant Wealth Advisors.

¹ Full Portfolio Management  are offered through the registered Portfolio Management Services . You may request a free copy of brochure, which describes among other things services offered and fees charged. Fee-based PMS are provided to customers with a minimum investment amount of Rs. 5,00,000 .

Arihant Financial Advisors provide recommendations on stocks, mutual funds, closed-end funds, IPO and asset allocation. Customers are required to complete additional forms and documentation in order to receive such services. Fee-based financial advisory services are provided to customers with a minimum investment amount of Rs. 5,00,000.

Invest on Your Own as a brokerage customer of Arihant.

Do I need to open a bank account?

Yes. In order to trade on the equities market, it is compulsory to have a bank account to ensure the transfer of funds. Fund are accepted or paid only through and to the bank account only.

Where do I find forms and applications?

For forms and applications click on the Downloads – Form Center section. Here you will find the application forms to open an account

What if I have questions or need help?

If you have any questions or queries related to our products or services or any other general query, you can Contact us through the means convenient to you. You can email us through online contact form. For more options for contact click here.

How can I track my positions and my account status?

Our website has full access to your account status 24 hours per day.

Visit http://arihantbackoffice.com/clientlevel to check all account online. Alternatively, you can call your relation manager and he would give you all the details or you can email us on crc@arihantcapital.com and let us know what information you require.

PUTTING MONEY IN AND TAKING MONEY OUT

How can I put money in my trading account?

You can make payment through:

  • Cheque quoting your account number on the reverse of the cheque. Please make it payable to Arihant capital markets limited
  • Bank transfer if RTGS (Real Time Gross System, for high valued cheques only).

Can someone else make a payment on my behalf?

We cannot accept third party payments from anyone as it is not authorised by the SEBI and the stock exchange authorities.

The cheque or bank transfer should be in the name of the account holder and from the bank account specified by the account holder at the time of account opening. In case your bank details have changed or you want transfers from more than one bank account, then please provide the bank details with the proof (bank statement clearly specifying account holder’s name and address). If the amount is received from other than the bank account specified by the client then in that case we will not consider the amount received from the client, unless proof of that bank is furnished through bank statement or a crossed cheque leaf.

When will the payments in my account be available?

If you send us a cheque then as soon as it has been paid into your account the funds are available for trading and to settle purchases. It normally takes 3-6 working days for payments through cheque to be cleared.

When you send a bank transfer the funds will usually be allocated to your account within 3-6 business days, but this can take up to 10 business days. Please ensure that your account number is quoted at the beginning of the reference as this will help us to allocate the funds to your account quickly.

How can I take money out of my Trading Account?

Providing you have sufficient funds cleared in your Cash Management Account you can request a withdrawal at any time. This can be done through cheque as well as online transfer. Just call your relationship manager to arrange a payment.

Can I make withdrawal in someone else’s name?

Third party cheques are neither accepted nor delivered in any of our branches as mandated by the regulatory authorities. We will make payment only in the name of the account holder.

How to I transfer funds online?

Procedure of Online Fund Transfer :

  • Login to the Arihant Online Trading system.
  • Click on Funds Transfer and enter the amount.
  • On the UTI website login with your UTI Net Banking ID and password.
  • Follow the instructions and complete the transfer.
  • On the last page it would display “Account debited successfully” and on the same page there is a link “Click on this link for completion”. PLEASE NOTE only on clicking this link will limits be updated immediately in the Trading system.

Please inform the Administrator about the transfer.

USERNAME AND PASSWORDS

How do I get my User ID and Password for the first time?

Once your account gets activated, we will dispatch you a unique user ID and password, with which you will be able to access your account online.

If you do not know your username or have forgotten, please call 0731-3016100 and we will be able to assist you.

What if I have forgotten my password?

If you have lost or forgotten your trading password, you can post an online request for forgot password link .

On the website www.arihantitrade.com there is a link "Forgot Password"

  • Key-in your client code and email id with which you are registered with us
  • System will send immediately you an email with system generated password to your email account mentioned
  • If the mail id does not match the request would be rejected
  • This will ensure entire secrecy of your password

Alternatively, CALL US on 0731-3016005 and we will re-issue them to you following a number of security checks. Upon login you will be prompted to change the password. To change the password you will be asked to enter your default password and choose a new password.

How do I change my trading password?

You can change your password anytime by accessing your account.

How do you ensure the security and privacy of my account?

Only you know your User Id and Password, as these are stored in encrypted form with us.

What if I have questions or need help?

Call us at 022-42254800 (Mumbai) or 0731-3016100 (Indore) or email us at crc@arihantcapital.com. We will be pleased to help you out.


Need Help?

If you are unable to find the answer to your question in our Help Centre please call our Customer Services team on 0731-3016100 or
022-42254800 or
email us.

 

 

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