Preference shares in India are similar to preference shares in other countries, in that they are a type of share in a company that has certain rights and privileges not available to ordinary shares.

In India, preference shares are typically issued with a fixed dividend rate, which is paid out to preference shareholders before any dividends are paid to common shareholders. This fixed dividend rate is usually specified in the company's articles of association and cannot be changed without the consent of the preference shareholders.

Preference shares in India may also have other rights, such as the right to participate in any excess profits of the company, the right to convert the preference shares into equity shares, and the right to vote on certain matters.

In addition, preference shares in India can be classified into different categories based on their features, such as whether the dividends are cumulative or non-cumulative, whether they are redeemable or irredeemable, and whether they are participating or non-participating.

Overall, preference shares are a popular way for companies in India to raise capital, as they offer a flexible way to access income streams while also providing some of the benefits of equity ownership to investors.

Equity share value and preference share value do not necessarily grow equally, as they are affected by different factors and market conditions.

The value of equity shares is primarily driven by the company's earnings and profitability, as well as market sentiment and macroeconomic conditions. If a company is performing well and its earnings are increasing, the value of its equity shares may appreciate. However, if the company is struggling or the market is experiencing a downturn, the value of its equity shares may decline.

The value of preference shares, on the other hand, is primarily influenced by the interest rate environment and the company's ability to pay its fixed dividend payments. If interest rates increase, the value of preference shares may decline, as investors may prefer other fixed-income securities that offer higher yields. However, if a company is financially stable and able to meet its dividend obligations, the value of its preference shares may appreciate.

In summary, the growth of equity share value and preference share value may differ due to their different drivers and market conditions. It is important for investors to evaluate the specific features and risks of each type of share and consider their investment goals and risk tolerance before investing.

At the end of a convertible preference share tenure, the conversion of the preference shares into equity shares typically happens automatically, based on a predetermined conversion ratio that is specified in the company's articles of association or in the terms of the preference share issue.

The conversion ratio is the number of equity shares that can be obtained for each preference share, and it is determined by the company at the time of the preference share issuance. The conversion ratio is usually set in such a way that it reflects the relative value of the preference shares and the equity shares at the time of conversion.

When the conversion event occurs, the preference shareholders have the option to either convert their preference shares into equity shares or to receive the redemption value of their preference shares in cash, as specified in the terms of the preference share issue.

The conversion process may require the preference shareholders to fill out a conversion request form or take other administrative steps, depending on the company's procedures. Once the conversion is complete, the preference shareholders become equity shareholders and are entitled to the same rights and privileges as other equity shareholders.

It is important to note that the conversion of preference shares into equity shares is subject to the company's articles of association and applicable laws and regulations, and may be affected by market conditions and other factors. Investors should carefully review the terms and conditions of the preference share issue before investing, and seek professional advice if needed.

The interest or dividend on preference shares is usually calculated on the face value of the shares, not on the sale price or the premium paid.

In this case, the face value of the preference share is 10, and the dividend is 12% per year. Therefore, the dividend per share would be 10 x 0.12 = 1.2.

The sale price of the share is 100, which includes the face value of 10 and the premium of 90. The premium is a one-time payment made by the investor to acquire the share, and it does not affect the dividend payments.

So, in summary, the interest or dividend on preference shares is paid on the face value of the shares, not on the sale price or premium paid.

According to the Companies Act, 2013 and the rules issued thereunder, preference share dividends in India can only be paid out of profits generated by a company or out of the proceeds of a fresh issue of shares. The Act defines profits as the net profits of a company after deducting all expenses, including depreciation and taxation.

Therefore, it is not permissible under Indian law to pay preference share dividends out of capital funds. Capital funds are typically funds that have been raised through the issue of shares or other securities, and using them to pay dividends would reduce the company's capital base, which is not allowed under Indian company law.

However, it's important to note that the terms of a specific company's preference shares may include provisions that permit payment of dividends out of capital, subject to certain conditions or limitations. In such cases, the company must comply with the terms of the preference shares while paying dividends.

Yes, a company can add more preference shares by amending its articles of association and obtaining approval from its shareholders. This is typically done through a resolution passed at a general meeting of the shareholders.

The new preference shares issued may have different terms and conditions from the existing preference shares, including the dividend rate, redemption period, voting rights, and conversion terms, among others. The company must ensure that the terms of the new preference shares are consistent with the provisions of the Companies Act, 2013 and any other applicable laws and regulations.

It's important to note that any increase in the number of preference shares may dilute the ownership rights of the existing shareholders, including the preference shareholders, and may affect the company's ability to pay dividends in the future. Therefore, it's essential that the company carefully considers the implications of issuing new preference shares and obtains the necessary approvals from its shareholders before doing so.

As per Indian company law, there is no standard tenure for preference shares. The tenure, also known as the redemption period, for preference shares can be determined by the company at the time of issuing the shares and can vary from one company to another.

The Companies Act, 2013 requires that preference shares be redeemed within a period of 20 years from the date of their issue, unless the company's articles of association or the terms of the preference shares provide for a longer period. The company may also choose to redeem the preference shares earlier than the specified redemption period, subject to the terms of the shares.

It's important to note that the redemption of preference shares is typically subject to certain conditions and limitations, including the availability of profits or the proceeds of a fresh issue of shares. The terms and conditions of the preference shares must be clearly specified in the company's articles of association and the prospectus issued at the time of the share offering.

In summary, while Indian law does not prescribe a standard tenure for preference shares, the redemption period for such shares is subject to the provisions of the Companies Act, 2013 and the terms and conditions specified by the company.

There is no one-size-fits-all answer to this question, as the choice between equity shares and preference shares depends on various factors such as the investor's investment goals, risk appetite, and the company's financial position.

Equity shares represent ownership in a company and carry voting rights, which means that equity shareholders have a say in the company's management and decision-making. Equity shares also offer the potential for higher returns in the form of dividends and capital gains, but they come with a higher level of risk as they are subject to market fluctuations and the performance of the company.

Preference shares, on the other hand, represent a fixed income investment and typically offer a fixed dividend rate, which may be higher than that of equity shares. Preference shareholders do not have voting rights, but they have priority over equity shareholders in receiving dividends and in the event of liquidation. Preference shares also carry a lower risk compared to equity shares, as the returns are fixed and independent of the company's performance.

In summary, equity shares may be suitable for investors seeking higher returns and willing to take on higher risk, while preference shares may be more suitable for investors seeking a fixed income investment with lower risk. However, the choice between equity and preference shares ultimately depends on individual investor preferences and the company's financial position. It's important to consult with a financial advisor before making any investment decisions.

Whether monthly or yearly dividends are better for preference shares depends on the investor's personal financial goals and needs.

Monthly dividends offer the advantage of a regular income stream that can help meet monthly expenses or be reinvested to compound the returns. However, the frequency of monthly dividend payments may depend on the company's financial position and ability to generate consistent profits.

Yearly dividends, on the other hand, offer the advantage of a potentially higher dividend rate, as companies may offer a higher rate for longer intervals between dividend payments. Yearly dividends also offer the potential for a higher total return, as the dividends are reinvested for a longer period.

Ultimately, the choice between monthly or yearly dividends for preference shares depends on the investor's personal financial goals, income requirements, and risk tolerance. It's important to carefully evaluate the company's financial position and dividend history, as well as the terms and conditions of the preference shares, before making any investment decisions.