How to Invest in Share Market in India

Investing in the Indian Stock Market became the most popular investment platform among Indian investors after “Dematerialisation” (DEMAT). In this guide, I am sharing the guide that explains “How to Invest in Share Market?”.

Without wasting time, let’s start!!!

So, basically we are going to learn the following in this guide:

  1. What is Share Market?
  2. Why to Invest in Share Market?
  3. How to make an investment approach?
  4. Investing in Stock Market as Beginner?
  5. How to Invest in Share Market in India?
  6. Best Share Market Tips

What is Share Market?

stock marketequity market or share market is the aggregation of buyers and sellers of stocks (also called shares), which gives ownership of businesses; these stocks may include securities listed on a public stock exchange or offered via Initial Public Offering (IPO).

Why to Invest in Share Market?

Well, this guide is all about how to invest in share market. But anyone can start investing in other assets also. Because so many investment options are available in India on ease.

If you are interested in other investment instruments than you can read my another guide on Best Investment Options in India to invest.

If you or someone looking to invest in Stock Market, few questions may click in your mind like – What is Share Market? How does Share Market work? How to Invest in Indian Stock Market? or What are the assets or Financial Instruments being traded in Stock Market?

Don’t worry, everything is explained in this guide step-by-step. But instead of jumping right in the Stock market is not good in my opinion. You should decide an investment goal and approach befoe going to start investing in Share Market.

Decide an Investment Approach

When you invest your money in the stock market or in another asset, there are some different approaches you can take.

To make a better investment approach, you can follow the below-mentioned simple steps to get your money into the market for profit.

You can manage the money yourself with a full-service broker and simply have an investment advisor to manage your money or you can choose an Algorithm.

  • Managed Investment – Managed investment accounts usually carry high fees. Further, handing over investment decisions to an advisor isn’t the right approach for many people.
  • Self-Managed Investment – You can choose a self-managed investing approach because it gives you the confidence & full control over your money & investing.
  • Algorithm Investment – Investing with Algorithm, which means an algorithm picks diversified investments for you based on your risk profile and investment goals. While investing with an Algorithm sounds simplest, but there are fees associated with automated financial advising. However, fees associated with Algorithm Investing is lower than if you have human advising you.

When you are ready with your investment goal and approach. Let’s move towards Share Market.

Investing in Stock Market as Beginner

As a beginner investor, the process of trading and investing in share market can seem a bit complicated & confusing. It requires you to open certain accounts and fulfill certain formalities before starting stock market investments.

If you are looking to invest in the share market, you don’t have to look any further but reading the following step-by-step guide by which you can start share trading in no time.

Invest in Share Market in India in 10 simple steps:

  1. Get a PAN Card
  2. Choose a Broker
  3. Open a Trading Account
  4. Open a Demat Account
  5. Make an Initial Deposit
  6. Decide how much to Invest
  7. Know Depository Participant
  8. Know Stock Exchanges
  9. Buying & Selling
  10. Instrument Traded on Stock Market

1. Get a PAN Card

If any want to carry out any financial transaction in India the primary requirement is PAN or Permanent Account Number. Permanent Account Number is unique 10 digits Alpha-numeric number assigned to an individual by the Tax Authorities of India for assessing their tax liabilities.

Nowadays PAN is required for opening a bank account, investing in Shares, mutual funds & other financial instruments, filing Income Tax returns, etc.

So, the most and first thing you will require to be able to start investing in Shares in India is a PAN card, you have to get it first.

2. Choose a Broker

You, me and anyone else cannot directly go to the stock exchange for buying or selling stocks/shares.

If anyone wants to buy or sell the shares on the share market that can be through only Stock Brokers because only Brokers are authorized to buy and sell the shares on Stock Market. Brokers are registered and licensed by SEBI (Securities and Exchanges Board of India). These Brokers can be an individual or company (Online or Offline).

If you are comfortable with the Internet better to choose an online broker company to get easy access to Share Market.

If you’re going to invest funds yourself, there are a huge number of  Brokers both discount brokers & Full-Service Brokers are available to choose from. You should pick a brokerage that fits your requirements and situations.

While choosing a broker, you should keep the following points in mind:

  • Compare brokerage fees (you’ll pay for buying and selling assets)
  • Minimum deposit requirements
  • Types of investments available
  • Trading platform. 

You should select a broker that offers low commissions or free trades with plenty of commission-free investments, and an online platform that provides education on Investments if you’re a beginner.

3. Open a Trading Account

Once you have a broker, you will now need a Trading account. A Trading account allows you to buy or sell shares through a Broker on the Stock Exchange. Trading account will be like an intermediary between buyer & seller, who facilitates the buying and selling.

4. Open a Demat Account

Once you’ve decided on your approach, it’s time to open a DEMAT Account. DEMAT Account gives you the liberty to invest your money in Stock Market, Mutual Funds, Exchange Traded Funds (ETF), Commodity, Equity, etc.

When you apply for a Trading account to a Broker, Trading account and Demat account will be opened simultaneously as it is one without the other is useless for investing in shares in India.

Demat account is just like a bank account. Bank account holds your money safely and keeps all transactions record and here Demat account holds your shares and these shares will reflect in Portfolio.

You cannot hold shares in physical form or store them physically after DEMAT introduction by SEBI. They have to be in a Dematerialized state or Demat state as per existing rules by SEBI. A Demat account does that for you.

The buying and selling will take place from the Demat account and it will reflect in your Demat statements that you receive from Broker time to time.

I hope you got an idea about What is Demat Account. If you want to know the Demat Account Opening Process than you can read the guide on How to Open Demat Account.

5. Make an Initial Deposit

After opening your DEMAT account, you’ll make an initial deposit to start Investing, usually through a transfer from your bank account. There are generally no fee will be charged for this transfer, or you can also send in a check if you’d prefer.

You can deposit money to your DEMAT Account by following options:

  • Net Banking (instant transfer from your linked account)
  • Cheque

As I told you earlier in this article that you can make an investment on different types of assets through DEMAT Account, you can put in as much money as you want to.

6. Decide how much to Invest

How much you should invest depends on your investment goal, when & how you need to achieve it. The most common investment goal is retirement. If you have a retirement plan opted at work, like Provident fund (PF), National Pension Scheme (NPS) then your investing milestone is easy to achieve. You should contribute at least enough to that account or plan to get the full benefits.

As a general thumb rule, you should invest a minimum of 10% to 15% of your income each month/year for retirement. You can choose more monthly or weekly investment options to achieve your other investing goals because of the availability of plenty of Investment Options in India.

7. Know Depository Participant

There is also a Depositary Participant that you need to be aware of.

There are two depositories in India: NSDL and CDSL which stands for:

  • NSDL – National Securities Depository Limited – NSDL, the first and largest depository in India, established in August 1996 and promoted by institutions of national stature has established a state-of-the-art infrastructure that handles most of the securities held and settled in dematerialized form in the Indian capital market. (source –
  • CDSL – Central Depository Services Limited – CDSL, facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry through its Depository Participants (DP). Central Depository Services Limited works for Bombay Stock Exchange and promoted by State Bank of India (SBI), Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Axis Bank and the Union Bank of India. (source –

These two have their agents in the form of Depository Participants who will provide an account to store the shares you hold.

It is not the same as Demat and Trading account as in Demat it shows the number of shares you hold and the Trading reflects the buying and selling that has taken place in your account. Depository Participants will hold those shares you bought and release the shares you sold.

However, it is usually taken care of by your broker who will also guide you about the Demat, Trading account opening process as well as register with a Depository. But you need to be aware of it none-the-less.

8. Know Stock Exchanges

There are two main stock exchanges in India that offer to trade on five days a week except for National Stock Exchange Holidays and Bombay Stock Exchange Holidays.

  • BSE – Bombay Stock Exchange – BSE was established in 1875, is Asia’s first & the Fastest Stock Exchange in the world. Bombay Stock Exchange is operating from the last 141 years since 1875 and facilitating the growth of the Indian corporate sector by proving it an efficient capital-rising platform. Popularly known as BSE, the organization was initially established as “The Native Share & Stock Brokers’ Association” in 1875. (source –
  • NSE – National Stock Exchange – The National Stock Exchange (NSE) is the leading stock exchange in India and the fourth largest in the world by equity trading volume in 2015, according to the World Federation of Exchanges (WFE). It began operations in 1994 and is ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on annual reports of SEBI. (source –

The buying and selling take place in these two exchanges.

These are the only two main exchanges in India where buying and selling of shares, commodities and other trading instruments take place. You need to mention the exchange to your broker too, as there is usually a slight difference in the price of shares at the two exchanges.

However, your broker can guide you here in case you do not understand where and what to trade.

9. Buying and Selling

For buying or selling shares, you need to inform your broker about which share in what quantity you wish to buy and at what price.

For example, if you wish to buy 10 shares of State Bank of India when it reaches a price of Rs. 294, you have to inform the same to you broker; Buy: State Bank of India. Quantity: 100, Price: 294.

In the case of an online broker, you have to inform your broker for buying and selling, they usually have customer care numbers where you can place your order if you do not have access to the Internet at that point. The transaction will be made on your behalf when the share reaches that price.

The same is done in case of selling, for example, Sell: State Bank of India, Quantity: 20, Price: 296. The sell order will be processed when the share reaches that price.

However, the buy and sell orders remain valid only up to a certain time, usually the same day or the next. Your stockbroker will inform you of the same. If during that time frame the buy or sell price is not reached, the order is canceled and you need to place a new order.

10. Instruments Traded on Stock Market

Along with the Share Trading of listed companies, other instruments also traded on Stock Exchanges. These instruments are:

  • Equity
  • Derivatives: Futures & Options, Foreign Indices
  • Mutual Funds
  • Currency Derivatives
  • Fixed Deposits and Bonds
  • Initial Public Offer (IPOs)
  • Gold Exchange Traded Fund (ETF)

Investing in Stock Market can be confusing, especially for the beginner. Getting some Share Market Tips can help a beginning investor to make informed choices that fit their needs.

When it comes to Investing, each person has a different goal and that makes a big impact on how you Invest.

Best Share Market Tips

  1. No Set of Rule
  2. Make Informed Choices
  3. Plan Your Goals
  4. Value Pick
  5. Growing Return
  6. Build a Diversified Portfolio
  7. Understand Price
  8. Start Investing Today

The following list of Share Market Tips explains some important aspects beginners should know before investing.

1. No Set of Rule

You should understand that there are no set rules for investing in Share Market. Further, there are no guarantees of profit and no perfect way to invest. Because Financial Assets are volatile and trading financial assets carry a huge risk.

2. Make Informed Choices

Before investing in any way, you should completely make yourself understand how your investment will work in the future and all of the details of the transaction.

3. Plan Your Goals

Make a simple plan to determine your investing goals and needs. It will help you to determine where you should make investments and how much money to invest.

These three tips are great for general investing, but many people are looking to invest in the fast-paced world of the stock market.

The above three tips are a good beginning, but the following tips will further help those investors, interested in investing in stocks.

4. Value Pick

Look at the value of the stock instead of the price because low-cost stocks may be low for a reason. So, you should look at the whole picture.

You must check why the price is low and if there is a possibility it may rise.

5. Growing Return

Check the company’s return on net worth. Net Worth is the profit after taxes divided by the net worth. It is important to see a trend of growing returns on the net worth to gain profits on a specific stock.

6. Build a Diversified Portfolio

You should not put all your money in high-risk stocks better to spread across various stocks. Try different stocks, some lower risks and some higher risks. This is the best way to protect your money and get some profit.

Once you’ve deposited money into your investment account, it’s time to actually purchase assets to make investments.

If you are confused about where to invest. I’ve described in my guide about Best Investment Options in India.

If you are using Advisor or Algorithms to manage your money that they will take care of this process for you once you’ve filled out some basic information about your risk profile and goals for the money.

If you’re investing yourself, you’ll need to determine where to put your funds for better returns.

I strongly recommend that you don’t put all your eggs in one basket, so invest in a mix of different assets. A classic mix for a diversified portfolio includes investing in large-cap stocks, small-cap stocks, real-estate investment, bonds, and mutual funds.

ETF stands for exchange-traded funds, and the funds put the investor money to buy different categories of assets. ETFs, or exchange-traded funds, make it really easy to diversify investment because you can trade them on the market like stocks, and there are many different ETFs that provide you better exposure to a broad array of different kinds of assets. 

7. Understand Price

Understand the basics of stock prices. Stock prices move up or down depending on future projections.

Price is the most critical indicator in stock market because all indicators and predictions are derived from the stock price movement.

8. Start Investing Today

Whether you decide to choose an investment advisor to manage your money, use an Algorithm, or buy ETFs, you’re going to be in a much better position, if you start investing now rather than leaving your money to languish in a low-interest savings bank account, or spending whatever you earn.

The younger you are when you start investing, the more you can take advantage of compound interest and build real wealth while growing. So, start investing today. Open your DEMAT account now and get your money in the market so it can start working for you.

These eight tips can help a beginning investor start investing in the stock market.

No matter what type of investment you are looking into, deep knowledge will be the key to success. These short Share Market tip lists are just the beginning of understanding investing and how to maximize your return with a minimum risk. Keep learning and trying.


That is all the primary thing to know before going to start investing in Share Market. There are a lot of things to learn to become a full-time stock market investor.

If you’re saving money for a goal and won’t need the cash for some period of time, the money should be invested. Unfortunately, many people are afraid to invest in any means or don’t do it because they don’t know how to start investing.

The good news is, investing can be easy, and you don’t have to know a lot about the stock market & other investment options to make wise investments. If you are new to share, you can learn here – How Share Market Works.

As a beginner to the world of investing, you may have a lot of questions like How do I get started investing? Here was my guide that explained how to invest in Share Market.

Again I’ve mentioned some Share Market Tips that you should follow to achieve your goals.

Thank You for reading.

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