A public company may have two different types of shares carrying varying rights with respect to dividends and voting, namely, equity shares and preference shares. Private companies may issue other types of shares as well. The nominal value is generally Rs.10 per share for equity shares and Rs.100 per share for preference shares.
The shares of a company are regarded as movable property and can, hence, be transferred freely. However, the manner of transfer is specified in each company's Articles of Association, which may impose restrictions on the right of transfer. Prior approval of RBI is required for share transfers to non-resident Indians and foreigners.
Within the framework of Securities and Exchange Board of India (SEBI) guidelines, debentures can be issued to raise funds for setting up new projects, expansion/diversificaiton of existing projects, restructuring of capital, etc. The popular types of debentures are fully convertible debentures (FCDs), non-convertible debentures (NCDs) and partly convertible debentures (PCDs).
Centre for Monitoring Indian Economy, Bombay
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Last updated: May 1995.