The Hindu Business Line : Cast your Net wide for information

You'd like to invest in the stock market. You're thrilled at the seemingly unending sources of information on companies and stocks — there are scores of Web sites spewing trading advice, TV channels featuring investment gurus 24/7, and a slew of hot tips and `inside' dope from friends — and you are simply itching to act on. But hold your horses! Before you make your trading debut, you ought to familiarise yourself with a few sources on the Internet that can give you authentic information on companies and stocks. These Web sites, run by regulators and government agencies, not only give an insight into trading rules and stock market parlance, they also help you run a background check on or research a stock you plan to buy. Most important, they offer genuine information that could help you sift pure speculation from actual fact.

Getting started: If you'd like a bird's eye view of how to get started on stocks, derivatives or even mutual fund investments, primers on these subjects are available at http://investor.sebi.gov.in. Not only does this Web site (hosted by the market regulator, Securities and Exchange Board of India — SEBI) feature FAQs on basic investing topics, it also carries the investor awareness campaigns run by SEBI from time to time. There are also FAQs on such esoteric subjects as takeovers and buybacks that you may have to deal with while investing in stocks.

Address and contact details of all market participants (including investor associations, merchant bankers, mutual funds, portfolio managers) are also at hand. A good place to check if the broker/mutual fund/portfolio manager you are dealing with is recognised by the market regulator.

If you are looking to open a demat account, www.nsdl.co.in is a good starting point for FAQs on the subject and provides a list of recognised depository participants.

Company research: Got a hot tip about a big order win by Billion Dollar Software?

A quick search in the Latest Announcements section of www.nseindia.com or www.bseindia.com will tell you if that's a genuine development that the company has intimated to the stock exchange, or a mere rumour floated by somebody anxious to offload the stock. The "company filings"/"corporate" sections in the Web sites of the stock exchanges are also good places to start your spadework on a company. You could begin with the financial performance for the latest and preceding quarters. Trends in the "shareholding pattern" of a company over a series of quarters could give you insights into whether institutional investors have been raising or lowering their stake in the stock. The Corporate Information section on the NSE Web site also allows you to view all stakeholders who own more than 1 per cent in a stock and the break-up of promoter holdings — useful in running background checks on a company's credentials. And "Board Meeting" information could flag important forthcoming developments.

There are also Web sites that allow you to download complete financial statements and other filings (such as shareholder resolutions) for listed companies. http://sebiedifar.nic.in allows you to download annual reports, cash flow statements and even segment results of listed companies for free. www.mca.gov.in, hosted by the Ministry of Company Affairs, is another source for company filings and balance-sheets; here documents are available for viewing on payment of a nominal fee. However, both the above sources are not yet completely operational and reports for the latest year are available only for a few companies; hopefully, this will improve with time.

Stock prices: www.nseindia.com and www.bseindia.com are good sources not only for current price quotes of a particular stock. They also offer insights into historical price trends. For instance, Market Information (Equities section) on the NSE Web site allows you to view and download data on the historical price and volume trends in a stock over any time period of your choice. The Charting facility (same location) allows you to compare the price movement of a selected stock with a peer or with the index to gauge relative performance.

If you are an IPO investor, you could access copies of offer documents for any IPO or rights offering from www.sebi.gov.in and www.nseindia.com (Corporates). For an IPO investor, the New Issue modules on the NSE and BSE Web sites offer crucial inputs to decision-making while the offer is on. Their IPO Mnitors allow you to track the response to the book-built offer on a real-time basis and also offer details on the number and profile of subscribers to the issue through the offer period.

Background checks: Your broker tells you that Big B Multiplex is a sure-shot multi-bagger. In such cases, even before you trawl for company financials, you should run a check on whether the company itself or its promoters have had any run-ins with the regulators. There are several sources for such information. www.sebi.gov.in, www.mca.gov.in both feature lists of vanishing companies (coporates that raised public funds and made themselves scarce thereafter!). Do make sure you run through the listings of companies with name changes (http://investor.sebi.gov.in) to check out whether Big B Multiplex masqueraded as a dot-com company in its earlier avatar.

A really good one-stop source to sniff out errant companies and promoters is www.watchoutinvestors.com, a Web site that systematically tracks regulatory action against companies and financial intermediaries. This site allows you to home in on a company/person's regulatory history through a search feature. The biggest advantage of this Web site is its ability to search across a wide swathe of regulators — it includes regulatory bodies such as the Company Law Board, Debt Recovery Tribunals, the Central Bureau of Investigation (CBI) and the Insurance Regulatory and Development Authority of India (IRDA), apart from the market regulators, SEBI and the Reserve Bank of India.

Also featured are rebuttals from companies/persons mentioned in the site. This is also a good location to acquaint yourself with recent changes and additions to the rules and regulations that govern capital market investing.

Finally, if you are investing in stocks, you are bound to run into instances of poor investor service, an unresponsive complaint cell or even cases of misdemeanour or sheer negligence.

In such cases, you can log on to http://investor.sebi.gov.in or www.mca.gov.in to file an online complaint to the respective regulator. Both these sites also allow you to follow up and track the status of your complaint after you have lodged it. Done with all the browsing? Now you're better equipped to make your trading debut! Here is wishing you luck.