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What Is a Stock?
A stock is a small piece of ownership in a company. When you buy a stock, you become a part-owner of that company. For example, if you buy shares of Reliance or Tata Motors, you own a tiny piece of that business.
If the company does well, the value of your stock may go up, and you can sell it at a higher price to make a profit. If the company performs badly, the stock value may go down.
How Does the Stock Market Work?
In India, the two main stock exchanges are:
- NSE (National Stock Exchange)
- BSE (Bombay Stock Exchange)
These are platforms where people buy and sell stocks of listed companies. The prices of stocks go up or down every second based on demand and supply.
If more people want to buy a stock, the price goes up. If more people want to sell, the price goes down.
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Why Do Companies Sell Shares?
Companies sell shares to raise money for their business. This is called an Initial Public Offering (IPO). After the IPO, their shares are available to buy on the stock market.
For example, when Zomato launched its IPO, people could buy its shares and become investors.
Why Do People Invest in the Stock Market?
People invest in the stock market to:
- Grow their money over time
- Earn returns higher than savings accounts
- Receive dividends (a small profit shared by companies)
- Build wealth for the long term
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