PehlaTrade

Meaning of buy back stocks Buyback stocks is a process where companies repurchase its stocks from stockholders or open market. This is generally considered to be a good sign as it is one indirect way for companies with surplus cash to maximize the wealth of its stockholders.A company with surplus cash prefer to buy its stocks when current market price of stocks is less than book value or what they expects it to be. Companies buy their stocks at a premium price and this leads to increase in stock price. Possible reasons for buyback are discussed below: 1) To increase stockholders value as company uses its surplus funds which is not suitable for any investment options it results in higher earning per share. 2)For protection against corporate takeovers. Buyback helps in increasing the promoters holding thereby reducing the chances of takeover. 3)To improve financial ratios as buyback reduces the cash component on companies balance sheet. Advantages of buyback : 1)Com...

The process of converting holdings of physical shares, mutual funds or any other security in to electronic form is know as dematerialization. In order to convert stocks in electronic form traders and investors needs to have demataccount which they can open with any depository participant who is registered with NSDL and CDSL. When an investor buys shares then they are stored in electronic form in their demat account and will be removed from it when they sell it. In following manner process of dematerialization is carried out: 1) When an investor is willing to covert its physical shares in electronic form then they submit a request to their DP using DRF form along with required documents like certificates of securities. 2) On receiving this request DP forward DRF form and certificates to the company’s registrars. 3) A confirmation of dematerialization is sent to NSDL/CDSL after the request gets approved. 4) Post the entire process investors can see th...