The Indian stock market has a very long history. It is very Exciting and Energetic. The growth in the last four decades has been phenomenal. In 1983, the market capitalization of the shares was a mere $7 billion only, which grew to $65 billion in 1992. It grew continuously to $220 billion in the year 2000 and then grew to $428 billion in 2010.
Not just that, in the year 2010, more than 4000 companies were quoted on the Bombay Stock Exchange making it one of the largest stock exchanges in the world.
So, by the end of the year 2018, the total market capitalization is $2.1 trillion.
the market is like a beautiful woman – endlessly fascinating, endlessly complex, always changing, always mystifying.
Many people talk about the Share and Stocks, but they really don’t know the difference between them. Both terms are interchangeably to refer to financial equities.
In simple words, the Stock Market is just an accumulation of public markets for selling, buying, or issuing the Shares on the stock exchange.
SHARE & SHARE MARKET
So, the 1st point comes in our mind is that What is Share?
For any business to start or grow there is a requirement of capital or money in a big amount. The company divided themselves into small sections and sell it to the public for raising funds. These small sections are called shares of the company.
For better understanding, let me explain you with an example.
Let’s say, there is a person Mr. J who is the owner of the company OSI. The company has a value of ₹1 Crore. But the company required more ₹40 lacs to grow. In that case, the company OSI will sell 4 lacs shares with the face value of ₹10/- each issue to the public. The company will get more 40 lacs funds for growing its business.
STOCK & STOCK MARKET
There is another word called Stock. A stock is referring to the capital raised by the company whereas the shares refer to a single unit of stock. When people say that they own stocks they mean they are talking about their ownership of companies.
Although, Stock Market is where the shares are being transacted. Transact is simple terms which means buying or selling the share. Therefore, nobody can buy or sell the shares of any public limited company without transacting through the Stock Market. If you are a buyer of shares of any public limited company, the stock market helps you to meet the seller or vice-versa.
STOCK EXCHANGE & SEBI
The company only raises funds through the primary market and get registered, to issue shares to the public and raise funds. The company generally gets listed on Stock Exchange through the primary market route & in case the company is selling its shares for the first time, it is called Initial Public Offerings (IPO) after which company goes public. This is the process of the Primary Share Market.
When the investors sell or buy the shares of a company & do transactions through a brokerage firm that is Secondary Share Market. The investor can enter or exit by buying or selling all its shares.
There is a regulatory firm that regulates both the exchanges, the firm is “The Securities and Exchange Board of India” (SEBI)”.
SEBI ensures that the BSE/NSE, stock Brokers/Sub brokers conduct their businesses fairly.
SEBI also ensures:
- The small retail investor’s interest should be protected.
- And large Investors huge cash cannot manipulate the market.
- They also set the legal framework and regulate all the entities operating in the market.
THE BOTTOM LINES
Stock & shares refer to the same things. The minor difference between the two is usually ignored and it has managed with syntax – financial or legal accuracy.
A share is the smallest unit, into which the company capital is divided. Whereas; a Stock is a collection of shares of a member converted into a single fund.
To invest in stocks or share of the company’s stock you need to have a brokerage account which is called Demat Account. There are so many firms available for opening Demat accounts. Firms like Zerodha Broking, Share Khan, 5-Paisa, and many more.
Furthermore, for any Investments, a Demat Account is the primary route.
If you know more about these firms you can click below link to get more information: