How Indian stock markets work - exchanges, shares, indices and core mechanics.
The stock market is a regulated marketplace where buyers and sellers trade shares of publicly listed companies, enabling businesses to raise capital and investors to build wealth.
A share is a unit of ownership in a company, entitling the holder to a proportional claim on the company's assets, profits, and voting rights.
Equity represents an ownership interest in a company, giving the holder a claim on its assets and earnings after all liabilities have been settled.
Market capitalisation is the total market value of a company's outstanding shares, calculated by multiplying the current share price by the total number of shares issued.
A dividend is a portion of a company's profits distributed to its shareholders as a reward for owning the company's stock.
Dividend yield is the annual dividend paid by a company expressed as a percentage of its current share price, showing income earned per rupee invested.
A bull market is a sustained period during which asset prices rise significantly, typically by 20% or more, accompanied by widespread investor optimism and strong economic fundamentals.
A bear market is a sustained period during which stock prices fall 20% or more from recent highs, typically accompanied by negative investor sentiment and economic slowdown.
A Demat account is an electronic repository that holds your financial securities - such as shares, bonds, and mutual fund units - in digital form, eliminating the need for physical certificates.
A trading account is an account held with a SEBI-registered broker that lets you place buy and sell orders for stocks, derivatives, currencies, and commodities on Indian exchanges.
The National Stock Exchange of India (NSE) is the country's largest stock exchange by trading volume, providing a fully electronic, transparent platform for buying and selling equities, derivatives, and other financial instruments.
BSE (Bombay Stock Exchange) is Asia's oldest stock exchange, established in 1875 in Mumbai, providing a regulated platform for trading equities, bonds, derivatives, and other securities in India.
SEBI (Securities and Exchange Board of India) is the statutory regulator established in 1992 to protect investors and develop and regulate India's securities markets.
The Nifty 50 is a benchmark stock market index maintained by NSE Indices Limited that tracks the weighted average performance of the 50 largest and most liquid companies listed on the National Stock Exchange of India.
The Sensex is a benchmark stock market index of the Bombay Stock Exchange (BSE) comprising 30 of India's largest and most actively traded companies across key sectors.
The primary market is where new securities are issued directly by companies to raise capital, while the secondary market is where previously issued securities are traded among investors.
A stock split is a corporate action in which a company divides its existing shares into multiple new shares, reducing the price per share proportionally while keeping total market capitalisation unchanged.
A bonus share is a free additional share issued by a company to its existing shareholders in proportion to their current holdings, funded from the company's accumulated reserves.
A rights issue is a corporate action where a listed company offers existing shareholders the right to buy additional shares at a discounted price, in proportion to their current holdings, before the offer is made to the public.
A share buyback is when a company repurchases its own outstanding shares from existing shareholders, reducing the total shares in circulation and returning surplus capital to investors.
A corporate action is any event initiated by a listed company that brings a material change to its securities or shareholder structure, such as a dividend, stock split, bonus issue, or merger.
Circuit breakers are regulatory price limits set by SEBI and exchanges that automatically halt or restrict trading in a stock or index when its price moves beyond a predefined percentage in a single session.
A blue-chip stock is a share in a large, financially sound, and well-established company with a long track record of stable earnings, reliable dividends, and enduring market leadership.
A penny stock is a share of a small or micro-cap company that trades at a very low absolute price, typically under ₹10–₹20, and often carries high risk and low liquidity.
Face value is a share's nominal printed value, book value reflects net assets per share on the balance sheet, and market value is the live price at which the share trades on an exchange.
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