Explanation:

Equity shares are not preferred by investors who want steady income because they do not offer fixed or predictable returns. Here are the reasons why equity shares are not suitable for investors seeking steady income:

1. Volatility of Returns: Equity shares are subject to market fluctuations and can experience significant price volatility. The value of equity shares can rise or fall based on various factors such as market conditions, company performance, and investor sentiment. This makes it challenging to predict or rely on consistent income from equity shares.

2. Dividend Payments: While equity shareholders are entitled to receive dividends, the payment and amount of dividends are not guaranteed. Companies may choose to distribute dividends based on their profitability and financial position. In some cases, companies may not pay any dividends if they decide to reinvest profits back into the business for growth opportunities.

3. Capital Appreciation Focus: Equity investors primarily aim to generate returns through capital appreciation, i.e., an increase in the value of their shares over time. This focus on long-term capital gains means that the income from equity shares can be irregular and not suitable for investors seeking stable and predictable income.

4. Risk Factors: Investing in equity shares carries inherent risks, including the risk of losing the entire investment. Companies may face financial difficulties, market downturns, or other unforeseen events that can negatively impact the value of equity shares. The higher risk associated with equity investments makes them unsuitable for investors who prioritize steady income and capital preservation.

5. Time Horizon: Equity investments are typically considered suitable for investors with a longer time horizon who can withstand short-term fluctuations. Investors seeking steady income often have shorter investment horizons and may need regular income to meet their financial obligations. Equity shares may not align with their income requirements due to the potential for inconsistent returns.

In conclusion, investors who want steady income are likely to prefer other investment options such as bonds, debentures, or fixed-income securities that offer predictable returns and lower risk compared to equity shares.