Share market is where buying and selling of share happens. Share represents a unit of ownership of the company from where we bought it.Investing in shares help us to build wealth.We can plan your investment strategy based on the time you need money.
A company requires capital or money for its expansion, development, etc. and for this reason it raises money from public. The process by which company issues shares is called Initial Public Offer (IPO).
NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) are the two major stock exchanges in India and are regulated by SEBI (Securities and Exchange Board of India). Brokers act as an intermediary between the stock exchange and the investors. So to start investing or trading, we have to open a demat account and trading account with a broker.
Share market is categorized into two catagery,
- Primary Market
- Secondary Market
Primary Market:
A company raises money by issuing shares in the primary market by the process of IPO.
The issue can be either through public or private placement.
Secondary Market:
The shares bought in the primary market can be sold in the secondary market. Secondary market operates through over the counter (OTC) and exchange traded market. OTC markets are informal markets wherein two parties agree on a particular transaction to be settled in future.
Share market plays a vital role in aiding the companies to raise capital for expansion and growth. Through IPOs, companies issue shares to the public and in turn receive funds that are used for various purposes. The company gets listed on the stock exchange after IPO and this provides an opportunity to even a common man to invest in the company. The visibility of the company increases as well.
Dividends:
1. These are the profits the company earns and it is distributed as cash among the shareholders.
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