Stock Market · Introduction to Stock Markets

What a stock actually is

Forget the chart screens and the news anchors yelling. Strip it back.

A stock is a tiny piece of ownership in a company. That's it.

Own 1 share of Reliance and you literally own 1/676-crore-th of the company. Sounds silly. But multiply by enough shares and you control real wealth. Reliance's biggest shareholders are billionaires because of this.

Why companies sell pieces of themselves

When a company needs money to grow, it has three options:

1. Take a loan (debt). Has to be repaid with interest.

2. Sell pieces of itself (equity), no repayment, but new owners get a share of future profits.

3. Wait until it earns enough internally, slow.

Most growing companies go with option 2. They sell pieces of themselves to thousands of investors. Each piece is a share.

Why people buy these pieces

Two reasons.

• Price growth: if the company grows, each share is worth more later.
• Dividends: companies sometimes pay shareholders a slice of profits, called a dividend.

> If you'd bought ₹10,000 of Reliance shares in 2003 and held, that stake would be worth ~₹3.5 lakh today. A 35× return over 20 years.

Where prices come from

After a company first sells shares (in an event called an IPO), those shares trade on exchanges like NSE and BSE. The price moves moment to moment, based on what buyers and sellers agree on.

More buyers than sellers → price up. More sellers than buyers → price down. That's literally the market.

7,500+Companies listed on Indian stock exchanges

20 cr+Indian demat accounts. The count crossed 20 crore in 2025 and is still climbing

Takeaway. A stock is a piece of a company. Its price moves with what buyers and sellers think the company is worth.