Top Preference Shares in India for 2026

Preferred stocks are shares that combine features of equity and fixed-income instruments. They usually give priority to common shareholders over other shareholders for dividend payments and claims on assets if a company is liquidated.

Preferred shareholders generally receive fixed dividends, but they usually have limited or no voting rights. Preferred stocks may appeal to investors who track steady income, lower equity risk than common shares, and priority in payouts. However, they still carry market, credit, liquidity, and company-specific risks.

1. EIH Ltd: EIH operates luxury hotels under Oberoi, Trident, and Maidens brands, with businesses across hospitality, dining, and managed hotel properties.
2. Carnation Auto India Private Limited: Carnation Auto provides aftermarket car services, including repairs, servicing, pre-owned car sales, inspection, warranty solutions, and related automobile services.
3. AU Small Finance Bank Ltd: AU Financiers later evolved into AU Small Finance Bank, offering banking products such as loans, deposits, credit cards, and business banking services.
4. Ramsarup Industries Ltd: Ramsarup Industries is engaged in steel wires, TMT bars, and other steel products, serving the power, infrastructure, and industrial sectors.
5. Cura Healthcare Private Limited: Cura Healthcare operates in the healthcare and medical technology sectors, offering products and services related to diagnostic imaging and healthcare solutions.

Here is how you can invest in the best preferred stocks:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Conduct thorough research into the top Preferred stocks in India using Tickertape Stocks Screener. The screener offers over 200 built-in filters, allowing investors to select parameters and generate a list of Preferred stocks.
3. Place a ‘Buy’ Order on the top Preferred stocks that align with your investment thesis.

• Priority in dividend payments: Preferred shareholders generally receive dividends before common shareholders. This can make preferred stocks relevant to investors who focus on income-oriented instruments.
• Fixed dividend structure: Many preferred stocks carry a fixed dividend rate. This can provide better payout visibility than common equity, although dividends still depend on the company’s terms and the availability of profits.
• Higher claim than equity shareholders: In case of liquidation, preferred shareholders usually have a higher claim on company assets than common shareholders, though they rank below debt holders.
• Lower voting dilution: Preferred shareholders usually have limited or no voting rights. This allows companies to raise capital without significantly diluting control for existing equity shareholders.
• Defined redemption terms: In India, preference shares are generally redeemable within 20 years, while infrastructure project-linked preference shares may have longer permitted tenures under specific conditions. This gives investors a defined redemption framework.

• Dividend is not guaranteed: Preferred dividends are paid in accordance with the issue terms and the company’s financial position. If profits or cash flows weaken, dividend payments can be delayed or skipped.
• Limited voting rights: Preferred shareholders generally do not get the same voting rights as equity shareholders. This limits their influence on company decisions.
• Interest rate risk: Preferred stocks can be sensitive to interest rate movements. When market yields rise, fixed-dividend instruments may become less attractive.
• Liquidity risk: Preferred stocks may not trade as actively as common shares. Low liquidity can make it difficult to enter or exit at a desired price.
• Credit and redemption risk: Redemption depends on the company’s financial strength and compliance with issue terms. Weak balance sheets, high debt, or poor cash flows can increase repayment risk.

• Dividend terms: Dividend rate, payout frequency, and cumulative or non-cumulative structure affect the income profile of preferred stocks.
• Redemption terms: Redemption period, call option, conversion option, and repayment schedule can influence expected returns and exit timelines.
• Company financial strength: Profitability, cash flows, debt levels, and credit quality help assess the issuer’s ability to pay dividends and redeem shares.
• Liquidity: Preferred stocks may have lower trading activity than equity shares, which can affect ease of selling at the desired price.
• Seniority of claims: Preferred shareholders rank above equity shareholders but below debt holders, which matters during liquidation or financial stress.