Page 76 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 4: Indian Capital Market

4.9 Keywords Notes

Deep discount bonds: A bond that sells at a significant discount from par value and has no
coupon rate or lower coupon rate than the prevailing rates of fixed-income securities with a
similar risk profile.
Equity shares with detachable warrants: A warrant is a security issued by company entitling
the holder to buy a given number of shares of stock at a stipulated price during a specified
period.
Fund Raisers: Are companies that raise funds from domestic and foreign sources, both public
and private.
Government securities market: Deals with tradable debt instruments issued by the government
for meeting its financing requirements.

Intermediaries: Are service providers in the market, including stock brokers, sub-brokers,
financiers, merchant bankers etc.
Market Regulators: Include the Securities and Exchange Board of India (SEBI), the Reserve
Bank of India (RBI), and the Department of Company Affairs (DCA).
NASDAQ: Is an American stock exchange. It is an electronic screen-based equity securities
trading market in the US.
Primary market: Is that part of the capital markets that deals with the issue of new securities.
Secondary market: It facilitates the original investor in new government debt securities to sell
his securities before maturity, and to do so with ease and without undue cost.
SPN: Is a secured debenture redeemable at premium issued along with a detachable warrant,
redeemable after a notice period, say four to seven years.
Sweat equity: Refers to equity shares given to the company’s employees on favorable terms, in
recognition of their work.

4.10 Review Questions

1. Discuss the evolution and growth of Indian Capital Market.
2. What is the structure of Indian Capital Market? Discuss.

3. What is the role of Indian capital market?
4. With reference to the participants in the securities market write a brief note on government
securities market.

5. The primary market is that part of the capital markets that deals with the issue of new
securities". In the light of above statement discuss the measures relating to primary market.
6. "An active and efficient secondary market for government securities adds to a great extent
to the attractiveness of government bonds to investors, at no cost to the government."
Comment.
7. What do you mean by cardinal principle for efficient growth of government securities
market?
8. Write a brief note on:
(a) GDRs
(b) ADRs

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