Glossary

Meaningful for banks, nearly useless for a software company.

A legal slice of a real business. Own 1% of the shares and you own 1% of the company.

When the promoter has objectives beyond the share price, this is who funds them.

Rising sharply while institutions reduce is the shape of informed money selling to newcomers.

The society meeting at scale. Most owners do not attend, and the ones who vote decide.

The same pie cut into more slices. Your wealth does not change by a single rupee.

Not a sale but a recovery process, run on notices rather than on screens. The chart usually stopped months earlier, when the security was suspended.

Genuinely independent directors who have demonstrably disagreed with something. A board of family friends is a formality.

Above 2 means lenders fund the business more than owners do — and lenders get paid first.

A ratio that trebled for many Indian retailers in FY20 without any borrowing happening — the leases were always there, they were just not written down.

The head of income decides what you keep. The entire amount is taxed at your slab rate rather than the gain at the equity rate, and the cost of the shares is not set against it — it becomes a capital loss in a different part of the return.

Sustainable only when covered by free cash flow — a company borrowing to maintain its dividend is buying goodwill with someone else's money. It is now taxed in your hands at your slab rate.

In a PSU it may follow the promoter’s fiscal calendar rather than the business’s reinvestment needs.

It is not the acceptance ratio. The entitlement is what you are allowed to offer; the acceptance ratio is what is actually bought once every tender is counted. You may tender beyond your entitlement, but the excess is considered only after entitled tenders in your category have been dealt with.

The right denominator for book value per share, and for a return on equity whose numerator is profit attributable to owners. Mixing the two levels gives the flattering answer wherever the non-controlling share of profit is positive, and the pessimistic one where the partly owned subsidiary is losing money.

Read it for what it does not cover. It speaks to the ratio, not to whether the transaction is a good idea, and the qualifications in its language usually carry more information than its conclusion.

Whatever the variable pay is linked to is what will get maximised.

The one document in the sequence written for you rather than for the exchange, and the only place several of those things are stated. It goes to the address on your depository record, which is a reason to keep that record current.

Sort them by when they fall due, not only by size. A profitable company still fails if the obligations arrive before the cash does.

A floor rather than a valuation. Useful where the assets could actually be sold; close to meaningless for a business whose value walks out of the building each evening.

The genuine bull case for an SME holding — better liquidity, wider coverage, index eligibility. It is also uncommon and slow, so it is not something to rely on when you buy.

The older name for what Ind AS calls a non-controlling interest. Compute per-share figures after deducting it — from profit and from equity both — or you overstate earnings and book value together.

Check what is inside it before applying any multiple. A one-off gain from selling a factory spends once and inflates the figure for exactly one year.

The Ind AS name for what older accounts called minority interest, and it has two halves. Ignore the profit half and earnings per share is overstated; ignore the equity half and book value per share is.

It is for a stated proportion of the shares rather than all of them, so it is not a floor under your whole holding. Where the computed price lands above the market the price tends to sit just under it and the daily range flattens; where it lands below, almost nobody tenders and the chart is unaffected.

Premiums are not the shareholders’ money. A large proportion has to sit in government and other approved securities — the money backing a thirty-year promise cannot chase this year’s best return.

New shares are created and sold to somebody in particular, so the count rises while your holding does not. Nothing about it is adjusted on the chart.

The numerator of earnings per share, by definition. Consolidated profit before the split contains money belonging to the shareholders of a subsidiary, and dividing that by the parent’s share count is how a 33-times stock gets quoted at 21.

IiAS, SES and InGovern in India. Their objections are often the first public statement that something is wrong.

The promoter is also the policymaker, employer and often the largest customer.

Hold the shares on this date and the entitlement is yours. The price adjusts to reflect what has left.

Shareholders bid the price up rather than down. The promoter can accept or walk away.

The company asking you for money. Read why it needs it before deciding.

Can be inflated simply by borrowing more. Always decompose it before admiring it.

The route almost every Indian group restructuring takes. Where a listed company is involved the exchanges and the securities regulator see it first, and the filed documents contain the valuation reports, the swap ratio and the appointed date.

Distinct from restricted cash, which is legally encumbered where it sits. Trapped cash is unencumbered and in the wrong company, and consolidation adds the two together without comment.

Why the identical press release is different news at different prices. The same money funds the same loans; whether existing holders end up with more book per share or less depends entirely on what the new shareholders paid.

The measure a capital raise cannot flatter. Net interest margin rises when more of the book is funded by shareholders’ money; the spread, being a difference of two rates, cannot move for that reason.

The invisible check in a merger. Objections raised at this stage are generally met by amending the scheme before anybody votes, so the version put to shareholders has already survived one round of scrutiny.

A shareholder who is not deciding whether to sell but is prevented from selling until a date the offer document names. The absence of selling before that date says nothing whatever about intention.

A related-party payment that moves profit from Indian minority shareholders to the parent. Watch for increases in the rate.

The route that has generally protected depositors above the insured limit, because deposits are liabilities the acquirer assumes. Shareholders in the same transaction are frequently written down to nothing.

Watch the strike price and who holds them. Promoter warrants priced well below where the share eventually trades are a transfer from minority shareholders, disclosed in the notes rather than announced.