While Raj was busy counting his eggs, the undertaking bank kept its fingers crossed. In case the IPO isnt fully subscribed (not all 30 shares have been bought by the public) they have to buy the unsold ones! - Shares not being fully subscribed is in itself an unhealthy sign.
Meanwhile, somewhere else a new character is emerging from the wilderness. Ravi, whose boss has just approved for him an extra bonus is wondering what to do with the unexpected bounty. His wife was badgering him to buy her jewelery with the latest designs. Kids want to spend money on an overseas trip. But somehow in the back of his mind, the fast paced green and red ticker figures at the bottom of the Television screens seemed to entice him. Office pantry talk ranging from 15 to 25 % profit on ABB; Nifty future calls with 355 margin ; Sensex going wild on infrastructure projections etc etc were buzzing around his head.
With money in his hand, Ravi knew nothing about all these hi-fi jargons and was on the look out for some one to guide him through the multi tangled world of share markets.
Thats when he met Mr.Dhallal, the stock broker and investment consultant.Ravi and Dhallal dovetailed perfectly. Dhallal assisted Ravi complete the formalities before entering the new world.
- PAN Card: Its the Unique number issued to Indian Nationals by the Income Tax Department. This number is required for carrying out many of the financial transactions in India.
- Linking of his bank account with the demat account and trading account: In olden days , any one buying shares from the share market would be issued a share certificate, which was the valid document and the same can be sold just like any other commodity. But nowadays, this physical proof of possession has been "de materialised". Whenever you buy a share, an entry will be made (just like adding a figure/ making a sale entry in the accounting software) in your "demat " account. Your demat account is like your bank account where actual money is replaced by electronic representative shares.Thats it. Cash used for these transactions are being held in the Trading account.
Once the formalities are completed, Dhallal advised Ravi to test the waters by buying few shares of Raj Farms which has recently floated an IPO. Ravi applied for 10 shares of Raj farms at a premium of rs.17.
(to be continued..)