How to get share from company?

 Share market

In this blog, I am going to explain how to get shares for our company? , How to buy or sell our shares?  These all are simple processes. I will try to explain with real-life examples.

How to get shares for our company?

   In the previous blog, I explained how shares were working and what was share. Some people may think it was nice, now I am going to open one company and then after getting shares from people I will say to them “bye-bye”. We know it was a scam. But in reality, there are many steps to register our company on the stock exchange.

   In India, two stock exchange organizations are there. Those are,

·       NSE- National Stock Exchange

·       BSE- Bombay Stock Exchange

Under NSE, there are 1700 companies were registered. Under BSE, there are 5400+ companies were registered. We can’t able to research these all companies. For that, NSE (National stock exchange) has National Fifty which was called NIFTY and BSE (Bombay national stock exchange) has Sensitivity index which was called SENSEX. NIFTY and SENSEX are indexes of the stock exchange. NIFTY has fifty companies that were well performed under NSE. But SENSEX has 30 companies that were well performed under BSE. In SENSEX’s index, they listed all categories of companies. Because, for example, if IT sectors were well performed before Covid pandemic, but during covid 19 pandemic period pharmacy industries were well booming. For that only they included various categories in the index. By knowing SENSEX we may learn the overall market.

    Now you had clarity about NSE and BSE. If we want to list our company in NSE or BSE, we should get approval from SEBI in India. Company owners should obey their conditions. After getting approval, companies will list on the stock exchange in India. They will suggest a value for one share of our company. If we fixed $100 for one share, SEBI also suggests $100 for one share that is called “Face value”. Face value is the original rate of the company.

How to buy shares?

     The common man wants to buy a share from one company where he/she will request shares. He or She couldn’t directly request from NSE or BSE. Alternately, He / She buys or sells from brokers. They will take some amount of brokerage money and give help to buy or sell shares.

     If we want to buy shares we need these three things,

1. ·       Bank account
2. ·       Trading account
3. ·       Demat account

The bank account is the most needed one without a bank account we can’t send or receive money. There are no chances to stole our money from the bank. A trading account is used to perform trade and maintain trading details. Demat account is the proof of our stacks. This account contains our stock details and stock values. Some banks are giving options to open these three accounts from them. But they will charge a high brokerage amount of money when compared to private brokers. They will charge for buying and selling each share. You want to buy and sell shares immediately you may go for private brokers. But you want to hold that share for a long period you can use any brokerage agency.

What are the benefits of buying shares?

     If you hold shares from a well-growing company for one year, sometimes that company will give you dividends amount based on profit. You don’t need to pay tax for this dividend amount. But the main thing is you should hold shares for one year from that company. You earn ownership right upon the company by buying shares and those rights are depending on how many shares you will have. There is no need to give dividend amounts to shareholders. The company has rights. So there is another way to get benefits from shares. If the company has a profit, the value of the share will increase. You bought a share for $100. There are chances to increase as $120 or $160 also based on profit. In that time you sell your share you will get a profit.

Trading Vs Investment?

     Markets are generally open at 9 ‘ o’clock and close at 3:30 pm. If you buy a share at 10 am and sell it at 9:30 am that is called trading and it is called Intraday also. If you sell that share on next day, that is called delivery. Basically, you hold a share for a short time which is called trading. In trading, there are pros and cons. Like we talked about in the previous blog if we buy a share at 9:30 am, its cost was $100. At the time of selling, its cost increased to $120. But there are chances to decrease in price. At that time you may face loss. This is the disadvantage. So go through the trend before you invest.

    If you hold the share for a long time, it came under investment. In investment, I am going to share one real-life incident. In 1990, one old man bought some shares from MRF for each share’s cost is 150 rupees. After 28 years, his grand Son called the news channel and told them that his grandfather had bought some shares from MRF and he had documents related to that and then asked them how he sold those shares. For that, they told him that he needed to convert those documents into a Demat account and he can able sell those shares. After converting it, he had sold those shares for 130 crore rupees. Was it amazing right? It was the power of an investment. Warren buffet also doing this investment kind of stuff. If that old man did invest in Kingfisher instead of MRF, he would face loss. So before investing, you had done some research about the company. If you did not do some research, it was Gambling. So keep learning. This stuff is not enough to invest in the share market. You should learn about the share market a lot.

Note: I am not a professional to share guidelines, I had only shared my knowledge about the share market.