How to invest in Shares in India: 6 Step Beginner’s Guide to Stock market investment in India

Traditionally, gold and stocks are the most sought after investment destination for Indian investors. However, if you are someone who wants to invest in stocks in India, and you are just getting started, the first question in your mind will be

"How can a beginner invest in India?"

Here is a starting point for investing in share markets in India.
Just stood in the crowd saying the words How is the market today?, and there will be ideas coming in from all sides.

The best part is that even people who have never invested in stocks will have strong ideas and advice at times on how to invest in stock markets.

So if you are a person who does not want to stop and give tips without doing anything and you want to invest in stocks in India, here is how to get started with investing in stock markets in India:

How to invest in India - Beginner's Guide:

So let's look at what a beginner has to do to start investing in the stock market. Here is a 6 step guide to help you get out.

1. Get a PAN card:

A PAN or Permanent Account Number is a key requirement for any financial transaction in our country. It is a unique 10-digit Alpha-Numeric number assigned to each person by the Tax Authority to assess their tax liabilities. PAN is required to open a bank account, invest in consolidated funds, fill in income tax returns etc. The first thing you will need to be able to invest in stocks in India is the PAN card, so get it first.

2. Find a Broker:

You and I cannot go directly to the stock and buy or sell shares as we would buy or sell something else. People are authorized to buy and sell in the market and are called brokers.

Traders can be individuals or companies and even online agencies registered and licensed by SEBI or the Securities and Exchanges Board of India, which regulates the stock markets.

Find a dealer, be it people you know and trust, or you can contact various companies that have a license to trade and work safely in the market.

If you are comfortable with online and offline content, you can search online through companies like ICICI Direct, Sharekhan, Kotak Securities, IndiaBulls etc.
(The names provided here are just examples of well-known online broker services, not recommendations or proof of their effectiveness, and please do some research before choosing your trading company.)

3.Get Demat and Trading Account:

Once you have a merchant, be it in the form of a person, company or internet, you will now need a Demat and Trading account.

The Demat account will hold shares or shares in your name and the same will be reflected in your stock portfolio.

You can’t hold the shares in a physical way or keep them physically. They must be in a state of physical attraction or in the state of Demat.

The Demat account does just that. It will keep the stock you buy in the market from your clients in your account in your name.

Sales will also appear here and will be reflected in your Demat statements that you receive from time to time. You will never have a physical sharing certificate in your hands; will appear in your Demat Account statement.

The buying and selling of shares you wish to own or want to sell will require a Trading account.

A trading account will be like a link that makes it easier to buy and sell. Usually your vendor takes care of all of this. Whether you go to an individual dealer, smoking company or online agencies, Demat and trading accounts will be opened simultaneously as there is no alternative to investing in India.

4. Depot Partner:

There is also a Debt Partner you need to know. There are two deposits in India: NSDL and CDSL representing National Securities Depository Limited and Central Depository Services Limited.

The two have their own agents in the form of Depository participants who will provide an account to keep the shares you hold.

It is not the same as Demat and a trading account as in Demat it shows the number of shares you hold and the trade reflects the purchases and sales that have taken place in your account.

Depository participants will hold the shares you have purchased and release the shares you have sold. However, it is usually taken care of by a trader who will also guide you through the process of opening Demat, Trading and registration with the Depository. But you need to know very little.

5. UIN if you want to invest BIG:

UIN or Alternative Identification Number is required in case you trade Rs. 1,00,000 or more at a time. If you plan to go to BIG in the stock market, UIN is required. Otherwise, for ordinary investors it is not necessary.

6.Buying and Selling:

By buying or selling stocks, you need to let your seller know what share you want to buy at a certain price. For example if you wish to buy 10 shares in Reliance Industries Ltd if it reaches a price of Rs. 885, you must inform the same to you broker; You can share:

Reliance Industries Ltd. Maximum: 10, Price: 885. In the case of an online retailer, it usually has customer care numbers where you can place your order if you do not have internet access at that time. When the allotment reaches that price, it will be for you.

The same applies to sales, for example Sell: Reliance Industries Ltd, Quantity: 3, Price: 895. The sales order will be processed when the allotment reaches that value. However buy and sell orders remain valid for a period of time, usually on the same day or the next. Your broker will notify you of the same.

If by that time the purchase or sale price has not been reached, the order has been canceled and you need to place a new order.

Buying and selling takes place in two exchanges: the BSE and the NSE namely the Bombay Stock Exchange and the National Stock Exchange. This is the only exchange in India where the buying and selling of stocks and commodities takes place. You need to talk about the exchange with your trader, because there is usually a slight difference in the stock price of the two exchanges.

However your dealer can direct you here in case you do not understand where to trade. (The names provided here are for example only, are not recommendations or proof of their effectiveness, and please do some research before buying or selling shares.)

Don't get carried away and avoid the following mistakes:

Now that you know how to get started with your investment in stocks, don’t get carried away because stock markets can be deceptive and it won’t take long for you to lose money if you make a small mistake in judging or following things unnoticed. Please refer to our post on the 11 mistakes you should avoid when investing in stocks here.

It can help you to prevent some common mistakes shared by market investors while making stock market investments in India.

I keep updating this post and writing new ones. So be careful. Also, be aware that many of the tips shared here are always green and will help you in most situations.

However the advice is also, never be taken in by any “advice”, “clues” or “money guaranteed double” statements. Use your good judgment.
Good investment !!!

About

Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you