Common Stocks

Common stocks, referred to as ordinary shares or equity shares in India, represent ownership in a company and constitute the most prevalent form of corporate security traded on NSE and BSE. Holders of common stock have the residual claim on a company's assets and earnings — they receive dividends and share in capital appreciation, but only after all obligations to creditors, bond holders, and preference shareholders have been met. Common shareholders have voting rights at Annual General Meetings (AGMs) — each share typically carries one vote — giving them influence over corporate decisions including board appointments, executive compensation, and major strategic transactions. In the event of liquidation, common shareholders are last in the priority order for asset distribution. Despite this subordination, common stocks have historically delivered superior long-term returns compared to debt instruments and preference shares, because they participate in the full upside of business growth. The Nifty 50 and Sensex indices exclusively comprise common stocks of India's largest listed companies.