What is it?
Direct equity means buying shares of companies listed on Indian stock exchanges. As a shareholder you participate in the company's growth through price movement and dividends.
Key Features
- Ownership in listed businesses
- High liquidity on NSE / BSE
- Held in your demat account
- Choice across large, mid and small cap
Potential Benefits
- Potential for long-term capital appreciation
- Possible dividend income
- Full control over stock selection
- Transparent, exchange-regulated pricing
Risks
- High volatility in the short term
- Company-specific and sector risks
- Requires research and discipline
- Capital loss is possible
Who May Consider It?
- Investors with a 5+ year horizon
- Those comfortable with market swings
- Investors willing to research or seek guidance
Frequently asked questions
1. Do I need a demat account?
Yes. Shares are held electronically in a demat account linked to a trading account.
2. How are equity gains taxed?
Short- and long-term capital gains are taxed at different rates under current Indian tax rules; consult a tax professional for your situation.
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Disclaimer: Investments are subject to market risks. Information provided on this website is for educational and informational purposes and should not be considered investment advice or a recommendation to buy or sell any financial product. Past performance does not guarantee future results.