Equity Market

Equity trading enables investors to become partial owners of the organization. When a company issues
shares to the investors in return for money, these shares are called equities. The equity meaning in
share market is nothing but these shares which investors can buy or sell. The equity market is also called
a stock market where traders buy or sell shares. The companies listed on exchanges offer a fraction of
their equity to public investors.

The equity market is a marketplace for traders where they buy or sell stocks. Investors can invest in
public or private stocks. Public stocks are traded on exchanges, unlike private stocks which are traded
privately. Initially, when an organization is set up it is private and later it goes on to launch its IPO. IPO
launch makes the private company available for public investors. Whereas private stocks of a company
are available to limited investors like employees or other specific traders. Companies get listed on stock
exchanges with a motive to earn capital from public investors and use it for their growth or expansion.
On contrary to equity financing debt financing involves loans and other borrowing methods to earn
capital.

How is Equity Market in India

In India, equities are traded on exchanges called as National Stock Exchange, Bombay Stock Exchange,
and Metropolitan Stock Exchange. There are companies listed on these exchanges and shares of these
companies are bought or sold by the investors. In India, the two forms of equity trading are the
spot/cash market and the futures market. In the spot/cash equity trading the stocks are available for
immediate delivery in the public financial market. Whereas in the future market the stocks are traded
later at a scheduled date.

What is 'Growth' in Equity Market

Traders look for investment opportunities in small companies which have greater growth potential.
Investors are generally attracted by such growth stocks and make big bids in the live equity market. They
invest in both Indian stocks and global stocks with higher growth potential.

How Do Equity Markets Work

The equity market operates similarly to a house auction where buyers and sellers bid different prices to
the trade. In this case, the house is an equity market and things are the shares of the companies listed
on the stock exchanges. Investors can buy these shares through IPO in the primary market or the
secondary market. The stock market is regulated and maintained by stock exchanges and various other
financial entities.

What Are the Timings of Equity Market

Currently stock market does not operate for 24 hours. Investors are allowed to trade from 9:15 am to
03:30 pm only on weekdays. You cannot trade on Saturday or Sunday except for any special
circumstances.
What Are Equity Trading Holidays

Stock market operates every day except for weekends. Also, the stock market is closed for trading on
certain public holidays .

What Is the Difference Between Stock and Equity

Stock and equity do not have a different meaning, but both are used to refer to shares. Stocks and
equity are just synonyms.

What Is Equity meaning in NSE

In NSE equity is referred to as the stock market. The stock market has two sections the new issues
(primary) market and the stock (secondary) market. At present more than 1300 securities are available
for trading on NSE. Screen-based trading enables people across India to trade and invest. The trading
system of NSE is called National Exchange for Automated Trading or “NEAT”.

Types of Equity Market

When a company wants to make its shares available to the public for trading the company must launch
its IPO. When the company launches its IPO, it offers a fraction of its equity to the public investors. Once
the IPO is closed the company is listed on the primary exchanges of India mainly NSE and BSE.

Secondary market

After the listing of the IPO shares on the exchanges, these shares are traded on the secondary market.
The secondary market allows investors who failed to procure shares during the IPO. Even the initial
investors can exit their investments in the secondary market. Investors in India commonly trade in the
stock market with the help of brokers. The brokerage firms act as intermediaries between the stock
exchanges and the investors.

Benefits of Equity
Following are the benefits of the equity market:

Equity market investments offer more returns during inflation as compared to other forms of assets.
This makes it possible for the investors to keep up with the lifestyle without cutting down on any
expenses even when the prices of goods are gradually increasing.

Despite greater risks, investors can generate huge profits from the returns. The returns earned from the
equity market are more as compared to a savings account or a fixed deposit.

Trading in options market can minimize the risks and amplify profits

Investors with good knowledge and enough research can earn huge profits in the longer run
 Investors can generate steady income in the form of dividends. Dividends are paid to shareholders from
the profits earned by the company

Procedures of Equity market

The stock exchanges in India offer an automated screen-based trading platform that is well equipped,
fully automated, and computerized. Any trader can benefit from this open trade system, they can buy or
sell trades and place their orders which best suit their requirements.

Cleaning & Settlement

The exchanges of India clear and settle all the trades that are executed during any trading day. These
exchanges function using well-defined settlement cycles which have no room for any deviations and/or
deferments. These exchanges operate in a way that ensures movements of the funds and shares are
completed in the right manner without any mismanagement. The exchanges of the Indian stock market
follow the settlement cycle of T+2. This means that all securities and funds movements are completed
two days after Day 1 (Day 1 is the day on which trades are executed). After the T+2 cycle, buyers receive
credits of the shares in their Demat account, and sellers receive the sale proceeds in the bank accounts
within two days.

Equity for a Shareholder

In addition to the value of equities, the shareholder must be aware of the value of a personal share of
the equity. This value is equal to the difference between total liabilities owed from total assets owned.

Equity = Value of Assets – Value of Liabilities

Equity investment return

When it comes to long-term equity investment you must be aware of the return on equity offered by
the company. Return on equity lets you identify the company’s ability to use investors’ funds to expand
and generate profit. If you are investing in a company for the long run it is of utmost importance to keep
an eye on this factor and understand the benefits of investing in that particular company.

To sum up, the equity market offers different benefits against inflation and continues to offer decent
returns despite the risk factor.