Glossary

A mandatory yearly meeting of a company's shareholders to present financial results, approve dividends, and elect directors.

A large institutional investor allotted IPO shares a day before the issue opens, signalling confidence and stabilising demand.

A high-net-worth individual who invests personal capital in early-stage startups, typically before institutional VCs enter.

A protection clause that adjusts a preferred investor's conversion price downward if a company raises at a lower valuation, preserving their ownership percentage.

An IPO application method where your bid amount is blocked in your bank account and debited only if shares are allotted.

The maximum share capital a company is permitted to issue, as stated in its Memorandum of Association — a legal ceiling, not a committed amount.

The 16-character number that uniquely identifies your demat account, needed for every share transfer in and out.

Free additional shares issued to existing shareholders proportional to their holding — funded from company reserves, not new capital.

The IPO price-discovery process where institutional and retail investors submit bids within a price band to determine the final issue price.

A company's net worth per share — total assets minus liabilities divided by shares outstanding — a fundamental valuation anchor.

The smoothed annual rate at which a value grows from a starting point to an ending point over multiple years.

A breakdown of who owns a company's equity — founders, investors, ESOP pool — and in what proportion, across funding rounds.

A hybrid instrument that pays like preference shares and must convert to ordinary equity on a trigger — the standard VC investment vehicle in India.

One of India's two depositories that hold shares in electronic (demat) form, including unlisted shares, under SEBI regulation.

An initial period in a vesting schedule during which no equity vests; on reaching the cliff, a first chunk vests at once.

A broker-issued document listing your demat account details — BO ID, name, bank and depository — used to set up share transfers.

A short-term debt instrument for startups that converts to equity in a future priced round, typically with a discount and a maturity date.

The final IPO issue price discovered through book building — the highest price at which the issue is fully subscribed.

A valuation method that estimates a company's intrinsic value by discounting all its projected future cash flows to present value.

An account that holds shares in electronic form instead of paper certificates; required to buy, hold and sell unlisted shares.

The reduction in existing shareholders' ownership percentage when a company issues new shares, e.g. in a funding round.

A signed instruction a seller gives their broker to move shares out of their demat account in an off-market transfer.

A cash payment a company makes to shareholders out of its profits, declared per share or as a percentage of face value.

A funding round priced lower per share than the company's previous round, signalling a fall in its valuation.

A SEBI-registered intermediary — your broker — that gives you access to a depository (CDSL or NSDL) to hold and transfer shares.

A clause that lets majority shareholders force minority holders to join a sale of the company on the same terms.

A preliminary IPO document a company files with SEBI for review, disclosing its business, financials and risks before the price is fixed.

Earnings Before Interest, Taxes, Depreciation and Amortisation — the most widely used proxy for a company's operating cash generation.

Total company value including both equity and debt — the price to acquire the entire business, net of its cash.

A company's net profit divided by shares outstanding — the single most-quoted measure of per-share profitability.

A scheme granting employees the right to buy company shares at a fixed price after vesting — a common source of unlisted shares.

The nominal value of a share as stated in the company's books — e.g. ₹1 or ₹10 — unrelated to its market price.

The price a share would fetch in an open transaction between willing parties — used as the tax benchmark for unlisted shares.

Cash a company generates after paying for operations and capital expenditure — what is truly available to shareholders and debt holders.

The unofficial premium over the IPO price at which shares trade in the grey market before listing — an informal, unregulated sentiment gauge.

A tax benefit that inflates your cost of acquisition using the Cost Inflation Index, reducing the taxable gain on certain long-term investments.

The first time a private company offers its shares to the general public on a stock exchange, transitioning from unlisted to listed.

The annualised return that makes the net present value of all investment cash flows equal to zero — the standard benchmark for private investment performance.

A unique 12-character code that identifies a specific security, including each unlisted company's shares, across depositories.

A right giving preferred investors first claim on sale or liquidation proceeds, often before ordinary shareholders get anything.

The profit made when an IPO stock opens on the exchange above its issue price on the first day of trading.

A mandatory window after an IPO during which certain shareholders cannot sell their shares, set by SEBI rules.

The minimum number of shares an investor must bid for in an IPO — you can only apply in multiples of one lot.

Profit from selling unlisted shares held for more than 24 months, taxed at 12.5% flat under the current Indian tax regime.

Share price multiplied by total shares outstanding — the simplest measure of how much the market values a company.

Total assets minus total liabilities of a fund or company, divided by units/shares outstanding — the intrinsic per-unit value.

India's first and one of two securities depositories, holding shares in electronic form; uses a DP-ID + client-ID account format.

A share transfer settled directly between two demat accounts, outside a stock exchange — how unlisted shares change hands.

A mechanism where existing shareholders sell their shares to the public in an IPO, rather than the company issuing new ones.

When demand for IPO shares exceeds the shares available — a measure of investor interest that often predicts listing performance.

Share price divided by book value per share — measures how much the market pays above (or below) the company's net asset value.

Share price divided by earnings per share — the most widely used multiple to judge whether a stock is cheap or expensive.

The amount of share capital actually received by a company from shareholders — what investors have paid for their shares, at face value.

The net profit a company earns after paying all expenses, interest, depreciation, and income tax — the 'bottom line'.

The percentage of a promoter's shareholding pledged as collateral for loans — a key risk indicator for unlisted and listed companies.

A shareholder's right to buy newly issued shares first, in proportion to their holding, to avoid being diluted.

The stage of a private company that is expected to list soon; pre-IPO shares are bought in anticipation of that IPO.

The floor and ceiling price set by a company for its IPO, within which investors submit bids during the book-building process.

Institutional investment in private (unlisted) companies, typically targeting mature businesses for operational improvement and eventual exit.

The individual or group that founded or controls a company and is named as such in its filings, facing the strictest lock-in rules.

A SEBI-defined class of large, sophisticated institutional investors — funds, banks, insurers — with a reserved IPO quota.

The final, SEBI-cleared IPO prospectus issued just before the offer opens, containing the price band and all updated disclosures.

A fundraising where a company offers new shares to existing shareholders in proportion to their holding, at a discount, before outsiders.

Operating profit divided by total capital employed — a fuller measure of efficiency that includes debt alongside equity.

Net profit divided by shareholders' equity — measures how efficiently a company generates profit from money shareholders have invested.

A contractual right letting existing shareholders match any offer before a holder can sell their shares to an outsider.

A promise of company shares granted to employees that converts to actual shares on vesting, with no exercise price to pay.

A SEBI-registered agency that maintains a company's shareholder records and processes share transfers, corporate actions and ISIN updates.

A seed-stage instrument that converts to equity in a future round at a discount or valuation cap, without setting a current valuation.

India's securities market regulator — the body that governs IPOs, depositories, brokers, investor protection, and market oversight.

A sale of existing shares from one investor to another, where the company receives no new money — how most unlisted shares are bought.

A startup's first formal funding round, typically from angels or early-stage VCs, used to build the product and prove initial traction.

A startup's first significant venture capital round, typically to scale a proven product — usually $2–$15M in India.

A listing on NSE Emerge or BSE SME for smaller companies — with a higher lot size, lighter compliance, and a different risk profile.

Profit from selling unlisted shares held for 24 months or less, taxed at your applicable income-tax slab rate.

A corporate action that divides each existing share into multiple shares at a proportionally lower price, keeping total company value unchanged.

A tax levied on transactions in securities on Indian stock exchanges — but not on off-market transfers of unlisted shares.

Shares a company issues to founders or employees in return for know-how, IP or effort rather than cash.

A clause letting minority shareholders join a sale by majority holders on the same terms, protecting them from being left behind.

Tax deducted by the payer at the point of payment and remitted to the government — relevant for dividends and certain capital transactions.

A non-binding document outlining the key terms of a proposed investment before the final agreement is drafted.

A privately held startup valued at $1 billion or more — a threshold once considered rare enough to be mythical.

Institutional funding for early-stage, high-growth startups in exchange for equity — the primary driver of valuation in India's unlisted unicorn ecosystem.

The process by which an employee earns the right to their granted shares or options over time or on milestones.

IRR calculated for cash flows at specific real-calendar dates — the correct formula when you invest or receive money at irregular intervals.