The process of classifying different stocks to organize trades effectively is known as stock categorization. Both BSE (Bombay Stock Exchange) and NSE (National Stock Exchange) have categorized these lists. The stock categorization is done to distinguish one group from another, enabling traders to pick stock easily. Thus, investors need to understand these several classifications while investing.
This grouping of shares is done based on specific quantitative and qualitative parameters such as market capitalization, trading liquidity, settlement type, etc. So, whether you want to hold Group A scrips in your portfolio for the long-term or invest in stocks with EQ series, you need to understand this classification for making investment decisions.
BSE Stock Classification
Below are the equity classifications by BSE.
- Group A
A company is put in Group A when,
– It has been listed for a minimum period of 3 months
– It has traded for a minimum of 98% of the days in the last quarter
– It has passed the investigation and compliance held by the Department of Surveillance and Supervision
You can find more details of group A stocks here.
– These are the most liquid shares in comparison to the other listed equities
– They show comparatively high trading volumes
– Settlement of trades in this group is done as per the normal rolling settlement process
As of 19th November 2021, some Group A scrips are Bajaj Finance, Maruti Suzuki, MRF, HDFC Bank Limited, Reliance Industries, and Infosys Ltd.
2. Group T
Following rules are applicable for stocks to fall under this segment:
– Stocks that are newly listed
– Stocks that show abnormal volatility
– Stock that has P/E overvaluation, more than 25% variation as compared to Sensex
– Stocks that do not belong to the derivatives segment
– The trades in this group are carried out on a trade-to-trade basis and are not allowed for intraday trading
– Every trade is regarded as a separate transaction, meaning both buying and selling of scrips are treated separately with no option for netting off
– You can’t perform BTST (Buy Today, Sell Tomorrow) and STBT (Sell Today, Buy Tomorrow) trades with group T stocks
– Trade settlement (paying the amount or delivering the shares) happens through a regular settlement cycle
– Angel One doesn’t allow margin trading for group T scrips
As of 19th November 2021, few Group T securities are Reliance Infra, EaseMyTrip, Saregama India Ltd., Dish TV India Ltd., etc.
3. Group M
Stocks of the following companies fall in this group:
– Small and medium companies (BSE’s Indonext Segment)
– Generally, the turnover of these companies is Rs 5 crores, and they own tangible assets worth Rs 3 crores
– These shares have low trading volumes and hence, are less liquid
4. Group Z
Companies in this category satisfy the following conditions:
– It has failed to comply with the exchange’s listing requirements
– It was unable to redress complaints of investors
– Those who have not made dematerialized arrangements with both the depositories (CDSL and NSDL)
5. Group B
– The shares that do not fall in any of the above categories are classified under group B
– This group see average trading volumes and follow the rolling settlement process
6. Others
| Group | Security |
| F | Fixed Income Securities of the Debt Market Segment |
| G | Government Securities traded by the Retail Investors |
| I | Interest Rate Underlying (Example – Bonds, IRF (Interest Rate Futures)) |
| X | Sub-Segment of securities listed exclusively on BSE |
| XT | Sub-Segment of securities listed exclusively on BSE (Settled on the trade-to-trade basis) |
NSE Stock Series
Read on for more information on the NSE stock series.
- 1. EQ (Equity)
- This series permits intraday equity transactions and equity delivery
- It is for intraday traders, long term investors as well as retail investors in equity
2. BE
- Shares that belong to the trade-to-trade segment or T-segment belong to this series
- No intraday trading is allowed
- Trades can only be settled by delivering the shares or by paying the agreed amount
- Rights Entitlement shares also fall under this category
3. Others
| Series | Security | Settlement Cycles |
| BL | Equity Block Deals (Single transaction trades in which a minimum quantity of 5 lakh shares or a minimum value of Rs. 5 crores is executed) | Trade-to-trade Settlement |
| BT | Physical Shares | Trade-to-trade Settlement |
| MF | Units Of Mutual Funds (Close-ended) | Rolling Settlement |
| ME | Units Of Mutual Funds (Close-ended) | Trade-to-trade Settlement |
| E@ | Partly Paid Equity Shares | Rolling Settlement |
| X@ | Partly Paid Equity Shares | Trade-to-trade Settlement |
| P@ | Non-convertible Preference Shares | Rolling Settlement
|
| O@ | Non-convertible Preference Shares | Trade-to-trade Settlement |
| Q@ | Fully-convertible Preference Shares | Rolling Settlement |
| F@ | Fully-convertible Preference Shares | Trade-to-trade Settlement |
| N@, Y@, Z@ | Non-convertible Debt Instruments (Except MF/ME) | Rolling Settlement |
| 1@ | Non-convertible Debt Instruments (Except MF/ME) | Trade-to-trade Settlement |
| D@ | Fully-convertible Debt Instruments (Except SM/ST/SP/SL/SI/SO/SQ) | Rolling Settlement
|
| S@ | Fully-convertible Debt Instruments (Except SM/ST/SP/SL/SI/SO/SQ) | Trade-to-trade Settlement |
| W@ | Convertible Warrants | Rolling Settlement |
| K@ | Convertible Warrants | Trade-to-trade Settlement |
| IV | Units of InvITs | Rolling Settlement |
| ID | Units of InvITs | Trade-to-trade Settlement |
| GB | Gold Bond | Rolling Settlement |
| GS | Government Securities | Rolling Settlement |
| RR | Units of REITs | Rolling Settlement |
| RT | Units of REITs | Trade-to-trade Settlement |
| SG | State Development Loans | Rolling Settlement |
| TB | Treasury Bills | Rolling Settlement |
*@ = 1-9, A-Z
Conclusion
You must understand that both NSE and BSE have predetermined ways to group listed stocks. So, before investing in the stock market, check the different categorizations and the company irrespective of its category.
