Direct Equity

1. Potential for Capital Appreciation: When you invest in direct equity, you have the opportunity to benefit from the potential increase in the stock's value over time. This can result in capital gains when you sell the shares at a higher price than your purchase cost.
2. Dividend Income: Many companies distribute a portion of their profits to shareholders in the form of dividends. Investing in direct equity can provide you with regular dividend income, which can be particularly beneficial for income-oriented investors.
3. Portfolio Diversification: Direct equity investment allows you to diversify your investment portfolio by holding shares in different companies across various sectors. Diversification can help spread risk and potentially enhance returns.
4. Voting Rights: As a shareholder, you may have the right to vote on certain company decisions at annual general meetings (AGMs). This gives you a say in the company's governance and policies.
5. Liquidity: Shares of publicly traded companies are generally liquid, meaning you can buy or sell them on stock exchanges during trading hours. This liquidity provides flexibility in managing your investments.
6. Long-Term Wealth Creation: Direct equity investment is often considered a long-term strategy for building wealth. Investors who hold onto quality stocks over time can benefit from compounding returns.
7. Tax Benefits: In some cases, investing in direct equity can provide tax benefits. For example, long-term capital gains from equity investments may be tax-exempt up to a certain limit. Additionally, investing in equity-linked savings schemes (ELSS) can help you save on taxes under Section 80C of the Income Tax Act. Investors can claim deductions on the amount invested in ELSS up to a specified limit.