Classification of stocks helps in understanding stocks easily. In India, Bombay Stock Exchange and NSE classify stocks. The classification is mostly similar in both of these.
Primarily, there are stocks A, B, S, T, TS and Z on the basis of grades. The grade is the score of a stock in accordance with its liquidity, size & exchange compliance.
A GROUP STOCKS
Most important Classification of stocks (in stock market) is the “A group Stocks”
- Highly liquid stocks.
- A group stocks showcase high traded volume.
- Rated as excellent in all aspects.
- Stocks having high Market capitalization used to fall under this Category.
B GROUP STOCKS
- These does not fall under any other groups. Accordingly, these are left behind stocks.
- Stocks are of normal volume.
- Settlement under rolling system.
S GROUP STOCKS
- Small and medium stocks.
- Falls under Indonext segment of BSE which comprises of companies with a listing in regional Stock Exchange.
- Low liquidity stocks.
T GROUP STOCKS
- Settlement is done under trade-to-trade system. Therefore, each trade is a separate transaction. Furthermore, no netting out of trades takes place as in rolling system.
- Stock in T group frequently moves in and out of the trade-to-trade system in accordance with the interests that controls them.
TS GROUP STOCKS
- Mixture of stocks from T and S groups.
- Trade-to-trade basis of settlement.
- In addition, includes stocks from Indonext segment of BSE.
Z GROUP STOCKS
In Stock Classification, the “Z” group Stocks are considered as more or less “risky” ones.
- These stocks does not meet the requirements for listing in exchange.
- Consists of companies with low media coverage as well as less public information.
- More risky.
These are the main Classification of Stocks in Stock Market.