Equity Capital (Ownership)
- Equity Shares (Ordinary): Permanent capital with voting rights and residual claim on profits.
- Differential Voting Rights (DVR): Equity with superior or fractional voting rights compared to
ordinary shares. - Sweat Equity: Issued to directors/employees for non-cash consideration (IPR/Value
Addition). - Bonus Shares: Additional shares issued to existing shareholders for free by capitalizing
reserves. - Right Issue: Invitation to existing shareholders to buy additional new shares at a discount.
Preference Capital (Hybrid)
- CCPS (Compulsorily Convertible Preference Shares): Mandatorily converts to equity.
Preferred by PE/VC investors. - OCPS (Optionally Convertible Preference Shares): Holder has the option to convert or
redeem as cash. - Cumulative vs. Non-Cumulative: Whether unpaid dividends carry forward to future years.
- Participating vs. Non-Participating: Whether holders share in surplus profits beyond fixed
dividends. - Redeemable Preference Shares: Must be repaid by the company within a stipulated period
(Max 20 years usually)
Debt Securities (Non-Bank)
Debentures & Bonds
- NCD (Non-Convertible Debentures): Pure debt, high yield, usually secured and tradable.
- CCD (Compulsorily Convertible Debentures): Debt that must convert to equity; often
treated as equity-linked in FDI. - FCD/PCD: Fully or Partly Convertible Debentures.
- Zero-Coupon Bonds: Issued at discount, no periodic interest, profit at maturity.
- Perpetual Bonds: No maturity date; issuer pays interest indefinitely.
- Subordinated/Mezzanine Debt: Ranks below other debt but above equity during liquidation.
Money Market & Short-Term Instruments
- Commercial Paper (CP): Unsecured, short-term promissory note (7 days to 1 year).
- Inter-Corporate Deposits (ICD): Unsecured lending between two companies.
- Bridge Finance: Temporary high-interest funding to cover a gap before long-term capital is
raised.
Global & Offshore Instruments
- ADR / GDR: American or Global Depository Receipts for tapping foreign equity markets.
- FCCB (Foreign Currency Convertible Bonds): Debt issued in foreign currency with a
conversion option. - FCEB (Foreign Currency Exchangeable Bonds): Exchangeable into shares of a group
company. - Masala Bonds: Rupee-denominated bonds issued in offshore markets (Investor bears
currency risk).
Equity-Linked Derivatives & Others
- Share Warrants: Right to buy shares at a future date at a specific price.
- ESOP / SAR: Stock options or Stock Appreciation Rights for employee retention.
- Tracking Stocks: Shares that track the financial performance of a specific business
segment. - Venture Debt: Debt tailored for startups, often including warrants/equity kickers.
Summary Comparison
