For anyone who wants to know how to buy shares in India, you must register with an authorised stockbroker first. Since shares cannot be held physically, you need a Demat account with an authorised depository participant. They hold your shares on behalf of you in dematerialised form.
There are two depositories in India, i.e. Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL). Also, there are 7 recognised stock exchanges in India, of which the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are the most heard.
To know how to buy shares in a company, you will have to start with the following steps:
To avoid the cost or technicalities of involving a broker, you can also directly approach a Depository Participant (DP) for a Demat account. They are registered members of CDSL or NSDL who provide depository services. You must fill out their application form and submit your KYC details for verification. Once you receive your agreement with your DP, you can purchase shares online.
It is crucial for a beginner to understand how the stock market operates. After that, you can start researching the types of companies you want to invest in, how much risk you are willing to take, and your financial goals.
Once you feel comfortable, you can choose a suitable quantity of shares and place your order on a stock trading platform. Remember, there are different types of orders you can place in a market; they have different rules and different charges, so choose wisely.
Unlisted shares are shares of companies not listed on any stock exchange. If you want to invest in them for their return potential, here are some options:
A company offers its rights shares at discounted market price to its existing shareholders based on their shareholding. If you receive the rights entitlement form in your Demat account, you can apply for a rights issue through the Application Supported by Blocked Amount (ASBA) process. If your bank does not support ASBA, you can also apply through the Registrar and Transfer Agents of a Company.
Preference shareholders are prioritised over equity shareholders in case of dividend distribution and liquidation of the company. They are listed on the stock market just like equity shares, and you can easily buy or sell them through your trading and Demat account. You can identify them with the prefix 'PREF' some stockbrokers use on their platforms.
Founded by the Kamath brothers in 2010, Zerodha is India’s biggest online brokerage platform. You can use Zerodha’s Kite app or the official website to buy shares if you have a registered account. The steps for both methods are the same.
Now known as Meta Platforms, it is one of the big five American IT companies and a social giant. You can open an international brokerage account with your preferred stock broker to buy their shares. This will give you direct access to buy Facebook shares. Alternatively, you can also invest in mutual funds that invest in international shares like Facebook.
Be it in terms of market capitalisation or revenue, Apple Inc. is one of the largest and most valued companies in the world. For direct investments, you would need to open an international brokerage account with a stockbroker that would allow you to add Apple shares to your portfolio. Otherwise, you can invest in mutual funds with Apple stock as its underlying asset.
Investors of Tesla have seen huge returns on their investments in the past. The company is often in the headlines for its spectacular growth. You must open an international brokerage account with a stockbroker to buy Tesla shares. You can also invest in mutual funds that invest in Tesla and other shares listed on the NASDAQ stock exchange.
If you have a US or international brokerage account, you can easily buy Alphabet Inc. shares from there.
For the unversed, Alphabet is the parent company of Google and one of the world's most trusted companies. If you, however, do not wish to open an international brokerage account, you can also choose to invest in the company through mutual funds. Several international mutual funds invest in shares listed on NASDAQ and other international exchanges.
Final Word
Although the process of investment in shares has become quite seamless in recent years due to digitisation, assess your investment objective and financial goals before you start your investment journey.
How to buy and sell shares online?
Ans. If you have a Demat and trading account with a registered online brokerage platform, you can easily buy and sell shares online.
How can I buy shares on my own?
Ans. In India, retail investors cannot buy shares directly from the stock exchange. So you will have to place a request with your stock broker to buy/sell shares on your behalf.
Can I buy 1 share?
Ans. Yes, you can easily select one share of the desired company and buy it at market price on any brokerage platform.
Can I invest 100 rupees in the share market?
Ans. There is no minimum investment amount when it comes to retail investors purchasing shares of a company. If a share is trading at or under Rs.100, you can invest in it.
How do I start investing in shares?
Ans. If you have a Demat and trading account, you can easily start investing in shares. All you have to do is buy the shares on a brokerage platform, which will be delivered to your Demat account.
How to buy IPO shares?
Ans. If you have a Demat account, or if your bank offers the services of a Demat account, you can buy IPO shares through that account. If you meet the eligibility requirements for a particular IPO, you can place an order once the bidding starts.