Group in the stock market
What are group A, B, T and Z in the stock market and
how they are classified?
Why shares of BSE are divided into different categories.
What are the reasons for dividing the shares of Mumbai Stock Exchange into different categories for trading purposes,
which are the categories and what are the differences?
Let us understand why and how shares are classified in the Bombay stock market.
Group in stock market – the basis of classification
All the shares in Mumbai Stock Exchange are divided into Group A, B, T and Z. Although this classification has been done to facilitate trading, which share is in which category also speaks volumes about its growth potential and its properties. Securities traded on BSE have been classified into various groups.
Group in the stock market
BSE has classified securities in equity segment on the basis of some qualitative and quantitative standards in 'A', 'B', 'T' and 'Z' groups for investor guidance and profit.
Group A
Group A includes the most popular shares in the stock market. Stocks that are actively trading fall into A group. The 'A' group mainly holds the top 300 shares on the basis of market capitalization, turnover and liquidity. Shares of A Group are the most liquid shares.
Liquid share means liquidity of the stock. In simple terms, such shares are always available to buyers and sellers and are easier to buy or sell shares. A category shares remain comparatively high in trading volume. Trade settlement in A category shares is done through normal trading settlement process. Most of the blue chip and FMCG shares are found in this group. Read here which company's share to buy on our site.
Group T
Shares under T Group are considered as the trade to trade settlement system of the exchange. Each trade in this group is seen as a separate transaction and there is no net-out like trade in the rolling system.
Traders who buy shares of this group to sell the script of this group will have to pay the amount or give the share for T+ 2 days. For example, you bought 100 shares of T Group and sold 100 other shares on the same day. Then, the shares you buy, you have to pay the price of those shares in two days. And for the shares you have sold, you need to deliver t+ 2 days shares so that the exchange can settle on time.
Group Z
Z Group includes equity stocks which have been blacklisted for not complying with exchange rules and regulations or are pending investor complaints or any such reason.
Group B
Category B includes stocks which do not form part of any of the above equity groups.
In addition, bse also has f group which represents the credit market segment.
It was our endeavour to learn the classification of shares before entering the Indian stock market so that you know on what basis the groups are formed in the stock market and what is their importance.
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