How to Buy Shares in India? - A Brief Introduction

Investing in shares is a powerful way to build wealth, and with India's dynamic stock market, the process has become more accessible than ever. Whether you're a beginner or looking to diversify with international or unlisted shares, this guide explains how to buy shares in India, updated for 2025.

What Are Shares?

Shares represent ownership units in a company, entitling the shareholder to a portion of the company’s profits, assets, and voting rights (sometimes). When you buy shares, you become a part-owner of the company, and your investment’s value fluctuates based on the company’s performance and market conditions. Shares are primarily traded on stock exchanges like the Bombay Stock Exchange (BSE) or National Stock Exchange (NSE) in India. However, unlisted shares are available through private transactions or specialised platforms.

Things Required for Buying Shares in India

To buy shares in India, you need a few essentials:

• PAN Card: A mandatory document for all financial transactions, including stock market investments.
• Demat Account: Since physical share certificates are obsolete, a Demat (Dematerialised) account electronically holds your shares. You can open one with a Depository Participant (DP) registered with either the Central Depository Services Limited (CDSL) or National Securities Depository Limited (NSDL).
• Trading Account: This account, linked to your bank account, allows you to buy and sell shares on stock exchanges like the Bombay Stock Exchange (BSE) or National Stock Exchange (NSE).
• Stockbroker or Platform: To facilitate trades, choose a registered stockbroker (online or offline).

India has seven recognised stock exchanges, with BSE and NSE being the most prominent due to their liquidity and extensive listings.

Step-by-Step Process to Buying Shares in India

Here’s how to start your investment journey:

Complete KYC Verification:

• Register with a stockbroker (online platforms like Zerodha or offline brokers).
• Submit KYC documents: PAN card, Aadhaar card, address proof, and bank details.
• Most brokers offer free Demat account opening upon registration.

Open a Demat and Trading Account:

• Your Demat account holds shares, while the trading account facilitates transactions.
• Link your bank account to transfer funds for trading.

Research and Select Shares:

• Study companies based on your financial goals, risk tolerance, and market trends.
• Use tools like stock screeners or broker research reports to identify potential investments.

Place a Buy Order:

• Log in to your trading platform or contact your broker.
• Search for the desired company’s stock (e.g., Reliance Industries on NSE/BSE).
• Choose the order type:
  • Market Order: Buy at the current market price.
  • Limit Order: Set a specific price to buy.
  • Stop-Loss Order: Protect against losses by setting a trigger price.
• Specify the number of shares and confirm the order.

Monitor Your Portfolio:

• Once purchased, shares are credited to your Demat account.
• Track performance via your broker’s app or website.

Buying Shares Online Without a Broker

To bypass traditional brokers and reduce costs, you can directly approach a Depository Participant (DP):

• Choose a DP registered with CDSL or NSDL (banks like ICICI or HDFC often provide DP services).
• Complete the application form and KYC process.
• Once your Demat account is active, you can use the DP’s platform to buy shares listed on the BSE or NSE.
• Note: Trading without a broker requires familiarity with market operations, as DPs primarily handle share storage.

Buying Shares for Beginners

New to the stock market? Follow these tips:

Understand the Basics: 

Learn how the stock market works, including concepts like stock prices, dividends, and market volatility.

Set Financial Goals: 

Decide whether you’re investing for short-term gains or long-term wealth creation.

Start Small: 

Begin with blue-chip stocks (e.g., HDFC Bank, TCS) that are stable and less volatile.

Diversify: 

Spread investments across sectors to reduce risk.

Use Online Tools that offer user-friendly interfaces and educational resources.

Understand Order Types: 

Familiarise yourself with market, limit, and stop-loss orders to optimise costs and returns.

Buying Unlisted Shares

Unlisted shares belong to companies not traded on stock exchanges, offering high return potential but higher risk. Options include:

Start-ups: Invest via platforms like Tyke or AngelList India, which connect investors with early-stage companies.

Pre-IPO Shares: Purchase shares before a company goes public through specialized brokers like UnlistedZone or Planify.

Promoters or Employees: Buy directly from company promoters or employees holding ESOPs (Employee Stock Ownership Plans), subject to legal agreements.

Risk Note: Unlisted shares are illiquid and lack transparency, so thorough due diligence is critical.

Buying Rights Issue Shares

A rights issue allows existing shareholders to buy additional shares at a discounted price, proportional to their current holdings. To participate:

• Check Eligibility: Rights entitlements are credited to your Demat account.
• Apply via ASBA: To block funds for the purchase, use the Application Supported by Blocked Amount (ASBA) process through your bank’s net banking portal.
• Alternative Route: If your bank doesn’t support ASBA, apply through the company’s Registrar and Transfer Agent (RTA) using their online portal or physical forms.
• Deadline: Act before the rights issue subscription period ends.

Buying Preference Shares

Preference shares offer priority in dividend payments and liquidation over equity shares. To buy:

• Identify preference shares on BSE/NSE (often marked with “PREF” on trading platforms).
• Place a buy order through your trading account, similar to equity shares.
• Example: Preference shares of companies like Tata Steel may be available on major exchanges

Buying International Shares 

To invest in global giants like Meta Platforms (Facebook), Apple, Tesla, or Alphabet (Google), Indian investors have two options:

International Brokerage Account:

• Use platforms that offer global investment services.
• Complete KYC and comply with RBI’s Liberalised Remittance Scheme (LRS), which allows up to $250,000 per year for overseas investments.
• Place buy orders for shares listed on exchanges like NASDAQ or NYSE.

Mutual Funds/ETFs:

• Invest in international mutual funds or Exchange-Traded Funds (ETFs) offered by Indian AMCs like Mirae Asset or Motilal Oswal.
• These funds hold portfolios with stocks like Apple, Tesla, or Alphabet, offering exposure without direct ownership.
• Example: Motilal Oswal Nasdaq 100 ETF.

Key Things to Remember

• Leverage Technology: Make smarter decisions using AI-driven tools like stock screeners or robo-advisors.
• Stay Updated: Monitor market trends via financial news for real-time insights.
• Tax Awareness: Understand capital gains tax (short-term: 20%, long-term: 12.5% for gains above ₹1.25 lakh as of 2025).
• Risk Management: Diversify your portfolio and avoid overexposure to a single stock or sector.
• Sustainable Investing: Explore ESG (Environmental, Social, Governance) stocks gaining traction in India.

Final Word

Thanks to digital platforms and streamlined processes, buying shares in India has never been easier. However, success requires aligning your investments with your financial goals, risk appetite, and thorough research. Whether you’re investing in Indian blue-chips, unlisted start-ups, or global tech giants, start small, stay informed, and consult a financial advisor if needed.