Glossary List P

Passive funds

Passive funds are those that are directly not dealt with, by the investor. It is the fund manager who makes all kinds of financial decisions and paves investment plans for the client. These include buying and selling of shares, securities and commodities.

Pay in

Pay in refers to dates wherein the stock brokers pay for the securities bought by their clients. The payments are made to the respective stock exchange.

Pay out

Pay outs are dates wherein the exchange releases payments to brokers for delivery of securities. The exchange makes the payments when stock brokers sell securities on behalf of their clients.

PE ratio

PE ratio is a very important determinant to let investors know if they have to buy the particular company’s shares or not. It is calculated by dividing the current market price of the share by its relevant Earnings per share or EPS. It lets investors know the rupee value of earnings of the company.

Point of Presence or POP

Point of Presence is a point of contact the Pension Regulating Authority of India infests on the citizens or pension holders across the nation. The POPs make sure that pension holders receive their pay-outs on time.

Pool Account

Pool account is a common account maintained by the fund manager where he/she lodges the funds of all clients in a separate bank account.

Portfolio risk

Portfolio risk is the potential risk or threat put to investors across all spheres. The risk involved with investor receiving lower rates of return or profits on the stocks, shares, bonds or securities is known as a portfolio risk.

Positional Calls

Positional calls are those options which inform investors on what the prices or stock indices would be, over a weekly or a monthly time-clause. Investors also look at prices of shares between 1-6 months to know where the stock of the said company is heading towards.

Preference Share

Preference share, otherwise known as a preferred stock is one where dividends are paid out to stake holders even before the common stock holders are paid off. In case the company goes bankrupt, the preference shareholders are entitled to be paid from the company.

Preference Share Capital

The capital raised from issuance of preference shares is what makes up the Preference share capital.

Pre-opening Session

Pre-opening sessions refer to the time slot before the actual onset of commencement of the Share markets. Investors get a preview on how the shares or securities are going to fare at the market and how their orders or deals will be executed.

Price band

Price band is an auctioning technique wherein the seller places the upper and lower price range of an aforesaid stock or bond. The buyers place their bids within the said range. This method is often used at Initial Public Offerings or IPO’s.

Primary Market

Primary market is a market which sells shares, stocks and bonds to investment holders for the very first time. The deals predominantly take place at an IPO (Initial Public Offering).

Private equity firms in India

Private equity firm is a financial console that provides starting capital or seed capital to private companies set up across the country. These include start-up firms as well. The investment company also provides strategies like leveraged buy-out, venture capital and growth capital to aspiring entrepreneurs.

Private Investment fund

Private investment fund refers to an investment company which meets one of the following criteria a) the firm has less than 100 investors to its credit b) Else its investors have substantial portion of their funds invested elsewhere. These are also known as hedge funds.

Private Placement

Private placement refers to sale of securities to a select group of investors. This is also one of the methods employed by a company to raise its capital base. Retail investors cannot purchase the shares or stocks of this genre as they are prohibitively expensive. Banks, huge corporate houses, financial consoles and insurance companies that buy securities offered via private placement deals.

Professional Clearing Member

Professional clearing members refer to a cluster of members who are not involved in trading with shares or securities. These are typically banks or custodians who act on behalf of their clients to execute transactions or close deals.

Provisional Contracts

Provisional Contracts are those contracts or agreements entered by a company soon after its incorporation, but before it acquires the Certificate of Commencement of Business or COC’s.

Proxy

Proxy is an option adopted by a shareholder who is not in a position to attend an Annual General Meeting of a company due to what so ever reasons. He or she may appoint someone else to attend the meeting on his/her behalf and cast votes to appoint the directors of the company. This agent who acts on behalf of the designated shareholder is known as a proxy.

Public Sector Undertaking or PSU’s

A Public Sector Undertaking or PSU is a firm run and managed by the Central Govt. with more than 51% of the paid-up capital sponsored by the Central Govt.

Put option

A put option is an investment strategy or a privilege given to shareholders to buy or sell certain shares at the price specified by them on or before the lapse of the contract period.