MAGAZINE

Initial Public Offer: Initial public offer is the first time that the stock of a private
company is offered to the public. Through this process, a privately held company
transforms into a public company.
Net Present Value: Net present value is the difference of the present value of cash
inflow and the present value of cash outflow which is calculated for the measurement
of the profitability of an business
'Balloon Payment: Balloon payment is the lump sum payment which is attached to
a loan, mortgage, or a commercial loan. This payment is usually made towards the
end of the loan period. Balloon payment is higher than what you might be paying
towards the loan on a monthly basis.
'Capital Adequacy Ratio’: Capital Adequacy Ratio (CAR) is the ratio of a bank's
capital in relation to its risk weighted assets and current liabilities. It is decided by
central banks and bank regulators to prevent commercial banks from taking excess
leverage and becoming insolvent in the process.
'Esop': An employee stock ownership plan (ESOP) is a type of employee benefit
plan which is intended to encourage employees to acquire stocks or ownership in the
company.
'Infrastructure Investment Trust: An Infrastructure Investment Trust (InvITs) is
like a mutual fund, which enables direct investment of small amounts of money from
possible individual/institutional investors in infrastructure to earn a small portion of
the income as return. InvITs work like mutual funds or real estate investment trusts
(REITs) in features. InvITs can be treated as the modified version of REITs designed
to suit the specific circumstances of the infrastructure sector.
'Mortgage-backed Securities: Mortgage-backed security (MBS) is a type of assetbacked
security collateralized by a pool of mortgages. This essentially represents
transfer of credit risk from a primary lender, typically the originating bank, to an
investment bank. The process involves purchase of mortgage loans by a bulge
bracket investment bank from various loan originators and bundling them into pools.
'Dead Cat Bounce: 'Dead Cat Bounce' is a market jargon for a situation where a
security (read stock) or an index experiences a short-lived burst of upward movement
in a largely downward trend. It is a temporary rally in the price of a security or an
index after a major correction or downward trend.
'Debt Consolidation' :Debt consolidation means combining more than one debt
obligation into a new loan with a favorable term structure such as lower interest rate
structure, tenure, etc. Here, the amount received from the new loan is used to pay off
other debts.
'Distributive Bargaining': Distributive bargaining is a competitive bargaining
strategy in which one party gains only if the other party loses something. It is used as
a negotiation strategy to distribute fixed resources such as money, resources, assets,
etc. between both the parties.
‘Bankruptcy’: When an organization is unable to honor its financial obligations or
make payment to its creditors, it files for bankruptcy. A petition is filed in the court