A stock (also called a share) is a unit of ownership in a company. When you buy one share, you own a small slice of that business and have a claim on its future growth and profits.
What do I actually own when I buy a share?
A company divides its ownership into many equal parts, and each part is one share. If a company has issued 1 crore shares and you hold 100 of them, you own 100/1,00,00,000 of the company. That ownership is real, even though it's tiny. You're a shareholder.
Owning shares can reward you in two ways:
- Price appreciation, if the company grows and more people want to own it, the share price can rise, and you can sell for more than you paid.
- Dividends. A company may share part of its profit with shareholders as a cash payout. Not every company pays one, and payouts aren't guaranteed.
Why do companies issue shares?
Companies sell shares to raise money (to expand, build factories, hire, or pay down debt) without taking a loan. In return, the buyers become part-owners. A company first sells shares to the public through an Initial Public Offering (IPO), after which those shares trade freely between investors on a stock exchange.
How do share prices move?
A share price is set by demand and supply. When more people want to buy a stock than sell it, the price tends to rise; when more want to sell, it tends to fall. Company performance, industry trends, and broader market sentiment all feed into that balance. To limit how far a price can swing in a single day, the exchange sets circuit limits or price bands.
How do I buy a share?
You buy and sell shares through a trading and demat account. When you buy shares to hold, you use a Delivery order and the shares are credited to your demat account. See what Delivery, Intraday, T+5 and Carryforward mean and how to search for stocks on Rupeezy.
Things to keep in mind
- Share prices can fall as well as rise. Your investment can lose value.
- A share is ownership in one company, so its price depends heavily on how that single company performs.
- Dividends are optional and decided by the company; don't assume a stock will pay one.
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What is a stock exchange, and what are the NSE and BSE? — You own a piece of a company — now see the marketplace where those pieces change hands.