how does stock market works in India!

                              stock market

we all know the importance of money but we don't know the importance of time so in simple way i am going to tell you how stock works in india.

if i give you 1000 rs and take it back after 10 years , what would be the value of that 1000 rs (same)

but instead of giving you that 1000 i give it to the companies and buy a small amount of partnership in their company to understand better here is an example value of the company is 10000 and i buy the 10% of it and now i am the shareholder of the company and i hold 10% of the shares with the money i invested.

now my money goes with the company i don't have to work for company or with company i just have to invest that i already did. after 5 years suppose the company is worth 1000000 then i'll not ask for my 1000 ill ask for my 10% in the company.

The stock market can be intimidating, but a little information can help ease your fears. Let's start with some basic definitions. A share of stock is literally a share in the ownership of a company. When you buy a share of stock, you're entitled to a small fraction of the assets and earnings of that company. Assets include everything the company owns (buildings, equipment, trademarks), and earnings are all of the money the company brings in from selling its products and services.

Why would a company want to share its assets and earnings with the general public? Because it needs the money, of course. Companies only have two ways to raise money to cover start-up costs or expand the business: It can either borrow money (a process known as debt financing) or sell stock (also known as equity financing).

selling shares

Let's say that you've always dreamed of opening a pizzeria. You love pizza, and you've done your homework to figure out how much it would cost to launch a new pizza business and how much money you could expect to earn each year in profit. The building and equipment would cost $500,000 up front, and annual expenses (ingredients, employee salaries, utilities) would cost an additional $250,000. With annual earnings of $325,000, you expect to make a $75,000 profit each year. Not bad.

The only problem is that you don't have $750,000 (building + equipment + expenses) in cash to cover all of those costs. You could take out a loan, but that accrues interest. What about finding investors who would give you money in exchange for a share of the ownership of the restaurant?

This is the logic that companies use when they make the decision to issue stock to private or public investor. They believe that the company will be profitable enough that investors will see a good return. In this case, if investors paid a total of $750,000 for shares in the pizza restaurant, they could expect to earn $75,000 annually. That's a solid 10 percent return.

       there are two major stock exchanges in India 

1. NSE - national stock exchange 

2. BSE - bombay stock exchange 

BSE

While BSE Ltd is now synonymous with Dalal Street, it was not always so. In 1850s, five stock brokers gathered together under Banyan tree in front of Mumbai Town Hall, where Horniman Circle is now situated.A decade later, the brokers moved their location to another leafy setting, this time under banyan trees at the junction of Meadows Street and what was then called Esplanade Road, now Mahatma Gandhi Road. With a rapid increase in the number of brokers, they had to shift places repeatedly. At last, in 1874, the brokers found a permanent location, the one that they could call their own. The new place was, aptly, called Dalal Street (Brokers' Street). The brokers group became an official organization known as "The Native Share & Stock Brokers Association" in 1875.

NSE

National Stock Exchange of India Limited (NSE) is the leading stock exchange of INDIA, located mumbai. NSE was established in 1992 as the first dematerialized electronic exchange in the country. NSE was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facilities to investors spread across the length and breadth of the country. vikram limaye is Managing Director & Chief Executive Officer of NSE.

National Stock Exchange has a total market capitalization of more than US$2.27 trillion, making it the worlds 11th biggest market as of April 2018. NSE's flagship index, the nifty 50, a 50 stock index is used extensively by investors in INDIA and around the world as a barometer of the Indian capital market. The nifty 50 index was launched in 1996 by NSE. However, Vaidyanathan (2016) estimates that only about 4% of the Indian economy / GDP is actually derived from the stock exchanges in India.