As of August 2025, the total number of Demat accounts in India peaked at over 20 crores. This growth was led by young investors under 30, constituting around 75% of new account openings.
More and more young people are stepping into investing to secure their future. By learning how to start investing in the share market, you can steadily build wealth over time.
This comprehensive guide will teach you how to start investing in the stock market, the requirements for a Demat account, stock market timings, and the definition of basic terms.
The stock market, or share market, is where companies issue shares that buyers and sellers trade. It also involves other financial products like bonds, mutual funds, and options. The stock exchange is the platform where these trades happen, ensuring proper regulation. Stocks can only be traded once listed on the exchange. In India, we have two stock exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
You can easily start investing in the share market by opening a Demat account online. Here’s how to begin.
A Demat account holds your shares in digital form. The first step is to choose a registered stockbroker who will trade on your behalf. Make sure to evaluate brokers based on their fees, research services, and user interface. Once you’ve chosen a broker, you can open the account and access it through their app or website.
Before you invest, understand how investing works. Start with fundamental analysis, which looks at a company’s financials. Also, learn technical analysis, which focuses on price trends and market movements.
This knowledge helps you decide whether to go for stocks, mutual funds, bonds, or other options based on your goals. In India, the stock market opens at 9:15 AM and closes at 3:30 PM, with a short pre-opening session from 9:00 to 9:15 AM.
After selecting the stocks you want to buy, transfer money into your Demat account. Your broker will handle the purchase and ensure that the money is debited from your account and the shares are credited to you once the transaction is complete.
To minimize risk, invest in stocks across different sectors. A well-diversified portfolio helps spread risk while aiming for better returns. Stick to investing in 10-12 solid companies.
Regularly check your investments and stay updated on market news. Monitoring your portfolio helps you decide when to buy, sell, or adjust your holdings to maximize profits.
You can open your Demat account from any of the registered brokers. Irrespective of the broker, you will need the following documents to open your Demat account.
The following table highlights the aspects to keep in mind and why before choosing a stockbroker.
| Aspect | Description |
| Brokerage charges | Compare the fees the broker charges for delivery, intraday, and F&O trading. |
| Account types | Learn if the broker offers Demat, trading, or 3-in-1 accounts. |
| Trading platform | Evaluate the speed, reliability, user-friendliness, and mobile/web versions of the trading platforms. |
| Customer support | Check the promptness of the customer support team via chat, calls, or email. |
| Range of products | Explore products, like mutual funds, commodities, bonds, and IPOs, offered by the broker. |
| Reputation and reliability | Verify if the broker is registered with SEBI. Check for customer reviews, market reputation, and security features. |
| Ease of use | The broker must offer simple onboarding, quick KYC, and an easy-to-use interface for executing transactions. |
Before excelling at how to invest money in the share market, you must know that there are two types of markets, primary and secondary.
Investors can purchase company stocks issued via an Initial Public Offering (IPO) in the primary market. Having a Demat and trading account is a must. Here’s the step-by-step process:
The buying and selling of securities happens in the secondary market. Here’s the step-by-step process:
Traders can use this timeframe to place buying and selling orders for securities.
During this session, traders can buy and sell shares uninterrupted.
This session focuses on calculating the closing prices of stocks. Between 3:40 pm and 4:00 pm, traders can place After-Market Orders (AMO) for the next day.
The first step to learning how to invest in the share market requires an understanding of its vocabulary and technical terms. Here are the definitions of some terms commonly used in the stock market:
In India, there are 2 major stock exchanges: the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). These exchanges allow you to buy and sell shares. Some shares trade in both exchanges, while some trade only in a single exchange.
These are indices that can tell you how the market is performing. Sensex is the weighted index of 30 stocks on the Bombay Stock Exchange. Nifty 50 is the weighted index of 50 stocks on the National Stock Exchange.
SEBI refers to the Securities and Exchange Board of India. It regulates the activities of the stock market to prevent investors, companies, traders, brokers, etc., from conducting any fraudulent transactions.
A company’s ownership is defined in terms of shares. A stock or share represents ownership in a company. If you own the shares of a company, then you own the company in proportion to the shares held and the percentage ownership of each share.
This is the account where you store your shares in an electronic format. It is held with a depository like Central Depository Services Limited (CDSL) or the National Securities Depository Limited (NSDL).
This is the account used for buying and selling financial securities. Generally, it is held with a stock market broker.
This is a scenario when the stock market is rising, as investors are optimistic about the market’s performance and are investing more money.
This is a market situation in which stock prices are falling, as investors are selling their stocks due to a negative sentiment.
When a company wants to list its shares on the stock exchange, it comes up with an IPO, which is an offer to the investors to subscribe to its shares. The IPO can be subscribed to by investors of various groups, like institutional investors, High-Net-worth Individuals (HNIs), retail investors, etc.
When a company makes profits, it may decide to share its earnings with the shareholders. This profit-sharing amount transferred to the shareholder’s account is known as a dividend.
If a company’s entire assets are liquidated and debts are paid off, the shareholder will receive a particular value known as equity.
This is an instrument of investment in which a fund house pools money from a lot of investors and then invests it on their behalf in the market.
Buying and selling shares on the same day is called intraday trading.
If you buy shares and hold them for more than a day, it’s called delivery trading.
The value of the share given at the time of issuance is the face value. It is also known as par value.
Before you invest, keep these important points in mind to manage risk and make better choices.
Know why you’re investing. It could be for retirement, buying a house, or saving for your child’s education. Once your goal is clear, decide how much you can invest and for how long.
Learn how the stock market works. Know the difference between NSE and BSE, and what Sensex and Nifty mean. You don’t need to be an expert, but a basic understanding helps you get started with more confidence.
Before investing in any stock, check the company’s past performance, financials, and future outlook. Don’t go by tips or social media posts. If you’re unsure, it’s better to ask a trusted advisor.
Some stocks go up and down more than others. If you don’t like too much risk, stick to stable companies that have been doing well over time. Your comfort with risk should guide your choices.
Spread your money across different companies or sectors. This way, if one doesn’t do well, the others can balance it out. A mixed portfolio helps reduce overall risk.
Here’s a quick checklist on how to invest in the stock market for beginners in India:
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You need to open a Dematerialised or Demat account and a trading account to invest in the share market. The Demat account holds your shares in electronic form, while the trading account facilitates the buying and selling of shares.
Making a short-term or a long-term investment depends on your unique financial goals and plans. Which is better for you requires careful consideration of your risk appetite, investment amount and the preferred period of investment.
Yes, you can invest Rs 100 in the share market. All you have to do is open a Demat and a trading account, identify a stock that can give you high returns and buy it.
To start investing in the share market, you need first to open a Demat and a trading account. After this, you need to log in to your trading account and select the stocks you want to buy. Next, specify the buying price. Once your transaction is complete, your shares will be reflected in your Demat account.
To withdraw money from stocks, you need to sell your shares through your Demat account. After the sale, the funds will be credited to your linked bank account.
In stock markets, you can trade stocks, bonds, mutual funds, ETFs, and derivatives like options and futures. These instruments allow investors to diversify and manage risk.
You profit from stocks by selling them at a price higher than what you bought them for. You can also earn dividends if the company distributes profits to shareholders.
The 80-20 rule in stocks, also known as the Pareto Principle, suggests that 80% of your investment returns come from 20% stocks in your portfolio. It highlights the importance of picking the right stocks and creating a well-diversified portfolio. Instead of managing every single holding, you must focus your time and energy on stocks that are providing the best results.
Before investing in a stock, check the issuing company’s fundamentals, growth history, business model, revenue, debt, management team, and competitive position. Also, analyze the stock’s valuation, industry trends, and current market dynamics. Evaluating stocks on these parameters can help you make well-informed investment decisions.
Goldman Sachs created the “Rule of 10” to help investors identify the stocks with the highest potential. According to this rule, a company’s revenue must have grown by at least 10% in each of the past three years, and the trend should continue till the next year. The stocks of companies that pass the “Rule of 10” may provide excellent returns in the mid to long term.
The stock market (or stock exchanges) is where you can buy and sell company stocks. However, you will need to open a Demat and trading account with a registered stockbroker, who will place the orders on the stock exchanges on your behalf. Make sure to invest in the right stocks with strong fundamentals.
People often use ‘stocks’ and ‘shares’ interchangeably to refer to financial equities or securities that denote ownership in companies. In more specific terms, ‘stocks’ is a broader term that represents ownership in one or more companies, while ‘shares’ refer to the actual units of ownership in a particular company.
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19 September 2025
9 mins read
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